Citation
The royal tobacco monopoly in Bourbon Mexico, 1764-1810

Material Information

Title:
The royal tobacco monopoly in Bourbon Mexico, 1764-1810
Creator:
McWatters, David Lorne, 1947-
Publication Date:
Language:
English

Subjects

Subjects / Keywords:
Monopoly ( jstor )
Tobacconists ( jstor )
Women ( jstor )

Record Information

Source Institution:
University of Florida
Holding Location:
University of Florida
Rights Management:
Copyright David Lorne McWatters. Permission granted to the University of Florida to digitize, archive and distribute this item for non-profit research and educational purposes. Any reuse of this item in excess of fair use or other copyright exemptions requires permission of the copyright holder.
Resource Identifier:
6393491 ( OCLC )
0023296607 ( ALEPH )

Downloads

This item has the following downloads:

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Full Text
















THE ROYAL TOBACCO MONOPOLY IN BOURBON MEXICO, 1764-1810











BY


DAVID LORNE McWATTERS













A DISSERTATION PRESENTED TO THE GRADUATE COUNCIL
OF THE UNIVERSITY OF FLORIDA
IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE
DEGREE OF DOCTOR OF PHILOSOPHY








UNIVERSITY OF FLORIDA 1979































Dedicated to my parents





































Copyright 1979

by

David Lorne McWatters















ACKNOWLEDGMENTS



I am indebted to many people for the successful completion of the

dissertation, First and foremost, I must credit my parents with instilling a healthy respect for the importance of education and for always encouraging me to continue, They have enriched my life in ways too numerous to explain. Dr. Lyle N. McAlister guided me through the Ph.D, program and offered helpful advice on the writing and researching of the dissertation. I am particularly indebted to him for his warning to avoid the study of policy rather than reality, the oldest of the sins of Latin American historians. I owe a special thanks to Dr. Christon I. Archer, my M.A. supervisor at the University of Calgary. Dr. Archer introduced me to colonial history and suggested I explore the topic of the dissertation.

I also wish to thank the members of my committee, Dr. William Woodruff, Dr. John Sommerville, Dr, Eldon Turner and Dr. George Winius, From Dr. Woodruff in particular I gained perspective on the broad movement of historical change and increased respect for cultural relativity. Dr. David Denslow and Dr. E. Ashby Hammond agreed to read the dissertation. Their help is greatly appreciated. Marjorie Summers did an excellent job of drawing the maps. I also wish to thank the Canada Council and the University of Florida for their all-important financial support for the doctoral program and dissertation research.

I cannot adequately thank my wife, Linda Catherine Illingworth, for

the support she has given me, Her assistance with editing and typing were invaluable, but most of all her unshakeable optimism was a constant source of encouragement.

iv

















CONTENTS




ACKNOWLEDGMENTS . . . . . . iv

ABSTRACT ..... .......... .. . . vi

CHAPTER

ONE SUBJECT, CONTEXT AND SOURCES ............. 1

Notes . . . . . . 20

TWO THE PLANNING OF THE TOBACCO MONOPOLY . . 29

Notes .................... . . . 51

THREE THE GROWING SECTOR: LAS VILLAS . .. . 59

Notes . . . . . .. 88

FOUR THE MANUFACTURING SECTOR: ABOLITION OF THE TOBACCO SHOPS 98

Notes .................. . 130

FIVE THE MANUFACTURING SECTOR: THE MEXICO CITY FACTORY 141

Notes . . . . . . 165

SIX THE MANUFACTURING SECTOR, 1780-1804: CONFLICT AND CHANGE 173

Notes . . . . . . 216

CONCLUSION .................. . ... 228

Notes . . . . . 235

GLOSSARY . . . . . . . 236

APPENDIX .................. . . 238

BIBLIOGRAPHY ................... . . 278

BIOGRAPHICAL SKETCH ................ . 290




v









ABSTRACT OF DISSERTATION PRESENTED TO THE GRADUATE COUNCIL
OF THE UNIVERSITY OF FLORIDA IN PARTIAL FULFILLMENT
OF THE REQUIREMENTS FOR THE DEGREE
OF DOCTOR OF PHILOSOPHY



THE ROYAL TOBACCO MONOPOLY IN BOURBON MEXICO, 1764-1810



BY



DAVID LORNE McWATTERS



AUGUST 1979



Chairman: Lyle N. McAlister, Ph.D. Major Department: History

The most extensive fiscal innovation of the Spanish Bourbons in New Spain was the creation of the royal tobacco monopoly. Its establishment was proclaimed by the viceroy on December 14, 1764, in compliance with a royal order of August 13, 1764. Within a few years the Crown created an elaborate bureaucratic organization to control the planting, manufacture and sale of all tobacco throughout the colony. The purpose of the monopoly was to produce revenues for the Spanish state and, judged in these terms, it was enormously successful. By the end of the eighteenth century the tobacco monopoly yielded revenues greater than any other single source. Between 1782 and 1809 revenues never fell below 3,000,000 pesos annually, reaching a high of 4,539,796 in 1789.

Establishment of the monopoly involved the reorganization of the entire tobacco industry in New Spain. This included both the regulation of tobacco planting and the transfer of manufacture and sale of tobacco products from private to state ownership. Initially the monopoly took control vi










of only the growing and sale of leaf tobacco, leaving manufacture and sale of tobacco products in private hands. In 1765 the monopoly began to regulate all tobacco planting by requiring formal contracts with the planters and by limiting all growing to several areas in the modern-day state of Veracruz. Gradually, the Crown entered into competition with private tobacco shops by producing cigars and cigarettes in governmentadministered factories. The establishment of a large tobacco factory in Mexico City in 1769 was the key step in the development of a manufacturing sector. The opening of the factory accelerated the elimination of the private shops, as many owners and workers were drawn into factory employment. The remaining shops in Mexico City were abolished in 1775, and sale of cigars and cigarettes were permitted only from government-operated retail outlets.

The dissertation examines the organization of the tobacco monopoly and traces its growth from 1764 to 1810. It is organized to reflect both the development and operation of the various sectors of the monopoly. From 1764 to 1768, progress was uneven, because of conflict among the principal officials responsible for its implementation. The part played by Joseph de Galvez, visitor-general from 1765 to 1771, was of particular importance to the monopoly in its earliest years. The growing sector from 1764 to 1781 is described, with attention given to the contract system, the determination of planting zones and the effects of a serious dispute within the administration over tobacco supplies. The dual process through which the monopoly organized the manufacturing sector in the 1770's is analyzed by examining the creation of the monopoly retail shops and the establishment of the Mexico City factory. The study concludes with an assessment of vii










the social, economic, and political importance of the factory system and of the monopoly in general in late colonial Mexico,

The central theme of the study is the emergence and operation of the manufacturing sector or, more precisely, of the system of factory production. Particular attention is given to the process by which the tobacco industry was transferred from private to state ownership and to the subsequent operation of the industry as a government enterprise, Because of the overriding importance of the factory in Mexico City, the monopoly tended to focus much of its attention on Mexico City and to assess progress and problems in relation to events in the capital, This study reflects that orientation by examining the organization and development of the manufacturing sector in Mexico City, Much of the economic data and most of the analysis of the socio-economic effects of the monopoly relate to the factory workers in Mexico City, The final chapter also offers some insights into the importance of the factories outside Mexico City.


























viii
















CHAPTER ONE
SUBJECT, CONTEXT AND SOURCES



The most extensive fiscal innovation of the Spanish Bourbons in

New Spain was the creation of a royal tobacco monopoly. Its establishment was proclaimed by the viceroy on December 14, 1764, in compliance with a royal order of August 13, 1764. Within a few years the Crown created an elaborate bureaucratic organization to control the growing, manufacture and sale of all tobacco throughout the colony. The purpose of the monopoly was to produce revenues for the Spanish state and, judged in these terms, it was enormously successful. By the end of the eighteenth century the tobacco monopoly yielded revenues greater than any other single source. Between 1782 and 1809 revenues never fell below 3,000,000 pesos annually and reached a high of 4,539,796 pesos in 1798.1

Establishment of the tobacco monopoly involved the reorganization of the entire tobacco industry in New Spain, including both the regulation of tobacco planting and the transfer of manufacture and sale of tobacco products from private to state ownership. Initially, the monopoly took control of only the growing and sale of leaf tobacco (rama),2 leaving manufacture and sale of tobacco products in private hands. Monopoly control of rama began in 1765 when the new tobacco monopoly, or Renta del Tabaco as it was called by its personnel, began to regulate all tobacco planting by requiring formal contracts with the planters (cosecheros) and by limiting all planting to several areas in the modernday state of Veracruz. Gradually, the Crown entered into competition

1






2


with private tobacco shops (cigarrerias) by producing cigars and cigarettes (puros and cigarros) in government-administered factories. The establishment of a large tobacco factory in Mexico City in 1769 was the key step in the development of a manufacturing sector. The opening of the factory accelerated the elimination of the tobacco shops, because many owners and workers were drawn into factory employment. The remaining private shops in Mexico City were abolished in 1775 and sale of puros and cigarros was permitted only from government-operated retail outlets (estanquillos).

In its final form, the tobacco monopoly was a complex, bureaucratic organization. Modern-day economists would describe it as verticallyintegrated, since it controlled the tobacco industry in New Spain from planting through manufacture to retail sale in licensed shops. Also highlycentralized, it was administered from Mexico City by a corps of royal officials headed by a director general. The colony was divided into fifteen administrative districts (see Figure 1).3 The largest and most populous was called the Administration General of Mexico and was administered from Mexico City. Ten of the remaining fourteen jurisdictions were referred to as factorias, not to be confused with the English "factories." The factorias, and the remaining four independent administrations (administraciones sin agregacion) were governed from the major cities of the viceroyalty. Six factories, employing several thousands of workers and located in Mexico, Puebla, Oaxaca, Guadalajara, Queretaro and Orizaba, supplied tobacco to the entire kingdom, although a small quantity of snuff (polvo) was imported from Havana. To protect against illegal planting, contraband and other forms of fraud, the monopoly created an extensive system of guards (resguardo) and inspectors, or "visitors" (visitadores).















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The purpose of this study is to describe the organization of the tobacco monopoly and to trace its development from 1764 until 1810, The central theme is the emergence and operation of the manufacturing sector of the monopoly or, more precisely, of the system of factory production. Particular attention is given to the process by which the tobacco industry was transferred from private to state ownership and to the subsequent operation of the industry as a government enterprise. To affect these changes, the monopoly was forced to eliminate all private shops in the colony and to relocate their owners and workers in monopoly estanquillos and factories. Because of the overriding importance of the factory in Mexico City, the monopoly tended to focus much of its attention on Mexico City and to assess the progress and problems of the Renta in relation to events in the capital. This study reflects that orientation by examining the organization and development of the manufacturing sector in Mexico City. Much of the economic data and most of the analysis of the socio-economic effects of the monopoly relate to the factory workers in Mexico City. Conditions in other parts of the colony, however, are not ignored, and Chapter Six in particular offers some insights into the importance of the factories outside Mexico City.

Following introductory remarks on subject, context and sources,

chapters are organized to reflect both the development and the operation of the various sectors of the monopoly. Chapter Two treats the first three years of the monopoly, from 1764 to 1768, a period of substantial conflict and uneven progress as officials in the colony attempted to define their responsibilities and to interpret royal orders. The part played by Joseph de Galvez, visitor-general from 1765 to 1771, was of particular importance to the monopoly in its earliest years. The third chapter provides a description of the planting sector of the monopoly







5

from 1764 to 1781, with attention given to the contract system, the determination of planting zones and the effects of a serious dispute within the administration over tobacco supplies. Chapters Four and Five examine two simultaneous processes through which the monopoly organized the manufacturing sector in the 1770's. They offer a detailed analysis of both the creation of the estanquillos and the establishment and operation of the factory in Mexico City, including such aspects as labor, labor conditions and wages. Chapter Six assesses the social and economic importance of the monopoly by tracing the debate over the factory system which troubled the monopoly in the 1780's and especially in the 1790's.

The decision to establish the tobacco monopoly in New Spain grew

out of changes in economic policy and practice in Spain. The War of the Spanish Succession (1702-1713) and the arrival of Philip V (1701-1746), grandson of Louis XIV, represented a "watershed" in Spanish history because they marked the beginning of the transition from the Hapsburg "decline"
4
of the seventeenth century to the Bourbon "reform" of the eighteenth. Schooled at Versailles, and accompanied by a host of French advisors, the
5
new king launched a reform program which drew heavily upon French ideas. One of the principal features of French influence was its encouragement of the centralizing impulse which characterized the reign of Louis XIV in France, Spurred by Louis' successful example, the Bourbon monarchy implemented a series of changes in government, economy and religion designed to reduce the autonomy and privileges of all independent institutions, corporations or groups while enhancing the authority of the Crown. At the same time, the Spanish monarchy adopted a more activist role in the management of Spanish society, introducing new institutions and officials, such as the intendants, to improve the efficiency and influence of







6

government at all levels. Spaniards would receive not only more government, but also improved government.6

The immediate impetus to fiscalreform, first in Spain and later in the colonies, derived from two major influences: "Colbertian mercantilism" and war. The precise relationship between Colbert's ideas and Spanish practice has not been well-established, despite frequent references to Colbert's influence on important Spanish intellectuals such as Geronimo de Uztariz and Jose Campillo y Cosio. Yet mercantilism has become a useful "umbrella" term for historians to categorize the organization and rationale of the pre-industrial economies of the sixteenth through the eighteenth centuries. In practice, mercantilism was characterized by the intervention of the developing nation-states in economic life. More precisely, centralizing states proposed to reorganize the medieval economy based on overlapping municipal, religious, corporate and royal authorities by enhancing royal power. From the point of view of the Crown, medieval organization fragmented economic life by enforcing special privileges and exemptions and encouraging competition for special jurisdictions. A national economy required the subordination of autonomous economic power by concentrating it in the hands of the central government or its representatives.8 In many countries, and especially in Spain, faith in a market allocation of economic resources was not part of popular economic wisdom. Adam Smith was a product of the British empire, not of the Spanish.9 As William P. Glade explains, government ". became for all intents and purposes the agent responsible for the entire state of society and the chief source of economic initiative."l0

The consequences of this activist and centralist approach to fiscal policy was a trend toward direct administration of government, that is royal, revenues. Rather than leasing the collection of revenues to tax







7

farmers or corporations (municipalities, guilds), the Crown created a new financial bureaucracy of royal officials to operate the tax system. Good government was considered to be one which exercised greater control over the lives of its citizens. In Spain, direct administration was stimulated early in the eighteenth century by Philip V's French advisor, Jean Orry, through his reorganization of the fiscal system,11 and was greatly advanced later in the century by the Marquis de Ensenada, Secretary of Finance, War, Marine and the Indies (1746-1754).12

The second major impetus to fiscal reform was war and the resulting demand for increased revenues. So great was the Crown's need for additional funds, states one author, that ". .. for the Spanish government the eighteenth century was one long fiscal crisis. l3 The source of Spain's anxiety was the growing military power of her chief rival, England, both in Europe and in the New World. The extent of their competition is illustrated by the fact that in the 107 year period from 1702 to 1808, 14
Spain and England were at war for all or part of 47 years. The economic effects of almost continuous warfare, especially after 1763, have been examined by various writers.15 In Spain, the result was a series of financial manipulations; in the colonies it was an energetic pursuit of more revenues.

The reform movement accelerated in Spain during the reign of Charles III (1759-1788) and, for the first time, was extended on a large scale to the colonies. Historians agree that the stimulus to reform in the New World was Spain's loss of Havana to England in 1762.16 This defeat, it is stated, was "provocative and sobering,"l7 leading to a "national
,,18
reappraisal of the colonial situation. The result was a "comprehensive overhaul,"19 a "defensive modernization20 to forestall the obvious threat presented to the colonies by England.







8

The reform program launched after 1763 was so comprehensive that it has been dubbed by D.A. Brading as the Bourbon "reconquest" of New Spain. In the name of "fiscal and strategic necessity," he asserts, the Crown attacked all the major bases of independent power in New Spain.21 In just a few years it implemented fiscal reform, restricted the authority of the Church,22 expelled the Jesuits, reorganized the commercial system, reformed the military23 and introduced the intendants.24

As in Spain, fiscal reform in New Spain involved a general effort to eliminate leasing of revenues and to place collection and administration directly into the hands of royal officials. The program was initiated by Joseph de Galvez, who arrived in 1765 as visitor-general (1765-1771).25 Among the fiscal reforms he introduced were direct administration of the monopolies of tobacco (1765) and playing cards (1768)26 and of the important sales tax (alcabalas).27 Gunpowder and salt were other state monopolies administered by royal officials; snow, cockfighting and leather were leased monopolies.28 The purpose of these innovations was to increase revenues by improving the administration of tax collection. As John Lynch explains:

From the 1750's greater efforts were made to increase imperial
revenue. Two devices were particularly favoured: the extension of
a state tobacco monopoly and the direct administration of the
alcabala (sales tax), previously farmed out to private contractors.29 Brading echoes this statement:

The principal innovation introduced by the Bourbons consisted
in the establishment of Crown monopolies in tobacco, playing cards
and gunpowder and in the utilization of salaried officiali0to
administer these monopolies and to collect excise duties.

The culmination of this movement was the introduction of the intendant system in 1786.31

The branch of government responsible for deriving revenues from the colonies was the real hacienda. Bernard Bobb cautions that the real







9

hacienda not be regarded merely as a treasury, and offers instead the expression "royal estate" to broaden its definition.32 In explaining the Spanish conception of the real hacienda as applied to the colonies, Herbert Priestly stresses its all-encompassing character:

Real hacienda, then meant more than "treasury" or "exchequer";
it included all the royal possessions (haber); it touched every
phase of private as well as public life; even religion itself was utilized to bring coin into the royal coffers. Real hacienda was the organic institutions expression of the raison d'etre of the
Spanish colonial world.

The real hacienda was made up of four major accounting divisions. The first, masa comun, comprised 36 branches (ramos), including several of the more valuable sources of income such as silver and gold duties, alcabalas, import and export duties and tribute. Revenues from masa comun were expended on the ordinary or regular costs of government in New Spain as well as on the subsidies (situados) to the non-profitable colonies administered from New Spain, such as Cuba, Florida, Louisiana, Puerto Rico and the Phillipines. The second category, particulares, included funds from such sources as tithes, fines and papal indulgences. As the name implies, these revenues were employed for specific purposes. The third division, agenos, were funds not actually part of the royal patrimony, but disbursed by royal officials. Pension funds, for example, were part of agenos. The fourth category was referred to as estancos especiales or simply remisibles. These were revenues received from the royal monopolies of tobacco, playing cards and mercury. They were deposited in a separate treasury and remitted directly to Spain without being used to cover ordinary expenses.34

Regardless of the long-term consequences of the Bourbon reforms, the fiscal reforms instituted during and after Glvez' visitation were enormously successful. By 1800 New Spain was paying not only the regular costs of government in the colony but also those of several other colonies,







10

as well as sending about 6,000,000 pesos to Spain each year.35 Alexander de Humboldt indicates that New Spain supplied about three-quarters of the 8,000,000 pesos sent from the American colonies to Spain each year.36

Studies of tobacco monopolies in Europe and in the other Spanish colonies provide a useful background to the monopoly in New Spain. The tobacco monopoly in Spain has been neglected almost entirely by researchers. Major works of economic history, such as those by M. Colmeiro, Jaime Carrera Pujal and Jaime Vicens Vives have almost nothing to say on the subject;37 neither do the more general works by Antonio Ballesteros, Modesto Lafuente, Richard Herr, Jean Sarrailh, Henry Kamen or Antonio Dominguez Ortiz.38 Available data reveals considerable confusion about the origin of the Spanish tobacco monopoly. The most commonly-cited date for its establishment is 1636.39 John Lynch, however, suggests that Spain attempted to create the monopoly in 1621, but failed,40 while Antonio Dominguez Ortiz refers to the leasing of five contracts of the estanco de tabaco from 1634 to 1663 and to the receipt of revenues from the "rents" from 1621 to 1640.41 Jose Perez Vidal cites a royal order of April 9, 1701 establishing the tobacco monopoly under direct administration rather than lease, with rigorous penalties against fraud. General instructions for the monopoly, he states, were issued in 1740 and repeated in 1767 and 1788.42 Henry Kamen reports that in 1711 Bartlome de Flon y Morales purchased the tobacco farm by advancing money to the state.43 John P. Harrison argues that the tobacco monopoly was leased until 1702, when it was abolished for a time, again leased, and finally put under direct royal administration in 1740. Modesto Lafuente agrees that the 45
monopoly was placed under direct administration in 1740, which seems to indicate that by 1740, at least, the tobacco monopoly in Spain was securely in the hands of the government.46







11

The monopolies in the Spanish colonies other than New Spain have been the subject of some research. Although the monopoly in Cuba dates from 1717, the idea of establishing monopolies in all the colonies appears to have originated with the Marques de Ensenada, Secretary of Finance, War, Marine and the Indies under Ferdinand VI (1746-1759), perhaps because of his success with the institution in Spain. According to Agnes Stapff, Ensenada considered the Spanish tobacco monopoly to be "the most precious jewel" of the monarchy.48 If extended to the colonies, he expected royal revenues from the Americas to double.49

In Cuba, purchases of tobacco for sale by the state began in 1708 as part of a project initiated by Jean Orry.50 A formal monopoly was declared in 1717, followed by a violent resistance from the planters and even more violent repression by the government in 1717, 1720 and 1723.51 After a period of leasing, the monopoly was turned over to the Royal Havana Company in 1740. In 1761 the Crown again formalized the monopoly, establishing restricted growing zones, setting prices and purchasing all tobacco.52

The next colonial tobacco monopoly was established in Peru in 1752. Guillermo Cespedes del Castillo, in an excellent article on the Peruvian monopoly, indicates that the state began leasing the collection of tobacco revenues as early as 1647; but not until 1745 did the viceroy receive the first royal order to create a monopoly.53 Initially, only the sale of rama was placed under the monopoly's jurisdiction, but in 1780 factories manufacturing puros and cigarros were opened in Lima and Trujillo. They were, however, abolished in 1791, leaving only rama under monopoly control.54 The yield of the monopoly grew from 24,925 pesos (1752-1762 annual average) to 196,370 pesos in 1782 and reached 445,662 pesos in 1788.55







12

In 1753 Chile and La Plata were added to the Peruvian jurisdiction. Agnes Stapff reveals that the monopoly quickly became the "pillar" of the Chilean real hacienda. By 1788 it was producing over forty percent of all Chilean revenues, and by 1809 almost fifty percent, or a total of 388,012 pesos annually.56 La Plata, included within Peru's administration only until 1776, yielded from 9,000 to 20,000 pesos yearly until 1776.57 Herbert Klein offers a figure of 173,533 pesos as the average annual tobacco monopoly profit for 1798 to 1802.58

The only major study of a colonial tobacco monopoly is Marco Antonio Fallas' La factoria de tabacos de Costa Rica, which covers the period 1766 until 1813. The author's economic analysis is weak, since he chooses to focus on administrative development and problems. He notes, for example, the widespread resistance to the monopoly, as demonstrated by the extent of contraband and by the debate over abolition of the entire monopoly. Authority over the Costa Rican monopoly rested in the hands of officials in the Captaincy-general of Guatemala, where a tobacco monopoly was also established in 1766.59

John P. Harrison and Luis Sierra both include the colonial monopoly as part of their studies on the tobacco industry in Colombia.60 According to Harrison, the monopoly was organized in 1778 along the same lines as in New Spain and was the major source of income in Colombia in the thirty years before independence.61 It was created strictly as a fiscal device to improve Crown revenues, but actually resulted in the economic destruction of certain regions.62 By 1805-1809 it was yielding a yearly average of 450,000 pesos.63

In Venezuela, the tobacco monopoly dates from 1779. Though not the subject of important articles or monographs, Eduardo Arcila Farias gave 64
it a chapter in his Economia colonial de Venezuela. Organized with an







13

eye to the export market, the Venezuelan monopoly produced revenues comparable to the combined income of those of Peru and Chile. By 1800 it yielded 825,344 pesos annually.65

The only comprehensive treatment of a tobacco monopoly anywhere is Jacob Price's superb France and the Chesapeake: A History of the French Tobacco Monopoly, 1674-1791. The French monopoly was created by Colbert as a source of revenues for ever-expanding war costs.66 France, Price asserts, followed the example of Spain and other countries in Europe in employing a state monopoly to provide revenues which could not be collected as duties or excise taxes. Many areas did not possess the administrative apparatus or legal power to impose such burdens, the result being a tendency to establish monopolies as a form of administering certain revenues. By the eighteenth century, all Europe except Britain, Ireland and the United Provinces used some type of tobacco monopoly. In France, the monopoly was not administered directly, as it was in Spain after 1740. Rather, it was leased to various individuals or companies and even abolished for a time. For most of its lifetime it was leased to the well-known United General Farms.67

Material on the tobacco monopoly in New Spain is available in various sources. The best information on the establishment of the monopoly and its development in the first few years of its existence is the report by visitor-general Joseph de Galvez (Marquis de Sonora) to the new viceroy, Antonio Maria de Bucareli (1771-1779). Written in 1771 as Galvez was leaving the colony, it is entitled Informe general que en virtud de real orden instruy6 y entrego el Exmo. Sr. Marques de Sonora siendo visitador general de este reyno al Exmo. Sr. Virrey Frey. D. Antonio Maria Bucareli y Ursua .. ..68 The report actually treats the entire range of G~lvez' activities during the visitation. Its commentary on the tobacco monopoly







14

is extremely useful because of Galvez' important role in the early years of the monopoly.

The most extensive contemporary source dealing with the monopoly is the Historia general de real hacienda, completed in 1794 by Fabian de Fonseca and Carlos de Urrutia. Viceroy Conde de Revillagigedo (17891794) commissioned the authors in 1790 to prepare a study of the real hacienda in compliance with articles 109-115 of the Ordinance of Intendants (1786).69 It remained in manuscript form until 1845, when the Mexican government began publishing it in six volumes. The Historia general offers a detailed account of the history, current (1790) structure, and yield of all branches of the real hacienda in New Spain. The section on the tobacco monopoly deals with the period from 1764 to 1790 and includes a copy of the 1768 ordinances of the monopoly.

A third contemporary account, less valuable but frequently utilized by historians, is Joaquin Maniau y Torquemada's Compendio de la historia de la real hacienda de Nueva Espaia, escrito en el ato de 1794.70 Maniau, who also assisted in the preparation of the Historia general, was the head official (oficial mayor) of the contaduria71 of the tobacco monopoly, contador of the real hacienda pension fund (monte pio de ministros), and the son of Francisco Maniau y Ortega, contador of the tobacco monopoly.72 It is, however, merely a summary of the Historia general.

A fourth contemporary source is Revillagigedo's Informe sobre las misiones, 1793, e Instrucci6n reservada al Marquis de Branciforte, 1794.

All viceroys prepared these reports to their succesors upon leaving office, and Revillagigedo's is noted for being particularly thorough and thoughtful. Undoubtedly, the statistical data was drawn from materials prepared by Fonseca and Urrutia. Revillagigedo's Instruccidn treats a number of







15

problems related to the tobacco monopoly, many of which arose during his term of office.73

A number of other contemporary sources are useful. The Gazetas de Mexico, beginning in 1784, include commentary on such matters as factory production, imports, weather problems and paper supplies from Spain. Travellers accounts by Juan de Viera and Jose Gomez in 1777 discuss the presence of the tobacco monopoly in Mexico City.75 A brief critique of the monopoly is presented in the 1788 report by the Mexico City Consulado to the King.76 Information may also be found in a report by Revillagigedo on the intendant system.77 The published Instrucciones reservadas of Viceroys Marques de Croix (1766-1771) and Miguel Jose de Azanza (1798-1800) unfortunately have almost nothing to say on the subject.78

It is probably misleading to refer to Alexander de Humboldt's famous Political Essay on the Kingdom of New Spain (1811) as a contemporary source. Humboldt combined the observations of a traveller with statistical information collected in 1804, most of which had been prepared during Revillagigedo's term of office.79 Despite the very limited information on the tobacco monopoly in the Political Essay, the work has been a popular source among researchers. Humboldt's presentation of statistics and his general commentary on numerous features of New Spain are very useful in assisting historians to understand the atmosphere of late colonial Mexico. He was opposed to the tobacco monopoly, declaring abolition of the institution and of Indian tribute to be the two "most desireable" reforms needed in the Mexican financial system.80

Among other nineteenth century sources treating the colonial tobacco monopoly is volume I of Lucas Alamin's Historia de Mexico.81 Although his comments are brief, they are noteworthy for their sophisticated understanding of all aspects of the subject and for their accuracy. Alamin employed






16

such sources as Revillagigedo, Maniau, Galvez and Humboldt and included the useful document prepared in 1823 by the contador of the monopoly, Juan Antonio de Unzueta, entitled "Estado que manifiesta el valor entero, gastos y liquido que produjo la renta del tabaco, desde 14 Febrero de 1765 en que fue establecida, hasta el de 1809."82

An anonymous tract, entitled Rese a historica de la renta del tabaco, tomada desde la epoca del Exmo. Sr. Conde de Revillagigedo (1850) offers a brief survey of the monopoly from about 1790 to 1850.83 Although it contains no footnotes, colonial statistics appear to have been drawn from Revillagigedo's materials. Other relevant nineteenth century studies using primary sources include the works of Hubert H. Bancroft, Tadeo Ortiz de Ayala, Joel Poinsett and H.G. Ward.84 Jose Maria Luis Mora, the famous liberal historian, offers nothing more than a tirade against the evils of monopoly, without analysis or data.85

The first modern examination of the royal tobacco monopoly appeared in 1916 as part of an excellent study by Herbert I.Priestley, entitled Jose de Galvez, Visitor-General of New Spain, 1765-1771.86 Priestley bases his chapter on the monopoly on such sources as Galvez' Informe, Revillagigedo's Instruccion, Maniau's Compendio and various letters by Galvez to Spain. The latter correspondence provides a useful supplement to the Informe, Curiously, he does not consider Fonseca and Urrutia's Historia general when writing about the monopoly. Rather, he cites the work in his chapter on real hacienda reforms.

Several authors have written about the tobacco monopoly using archival sources such as Correspondencia de Virreyes, Reales Ce'dulas and Bandos in addition to printed documents. Brief but accurate comments are provided in the works of Clarence Haring, Jose Maria Marroqui and Eduardo Arcila Farias.87 Four volumes directed by Jose Antonio Calder&n Quijano on New








17

Spain during the reigns of Charles III (1759-1788) and Charles IV (17881808) offer considerable material drawn from records in the Archivo General de Indias in Seville.88 These studies are a compilation of essays by various Spanish historians, and they provide by far the best single secondary source of information. The tobacco monopoly during the viceregency of Bucareli is treated in books by Bernard Bobb and ROmulo Velasco Ceballos.89 Eduardo Baez Macias includes a list of 133 cigarrerias operating in Mexico City in 1753, before the creation of the monopoly.90

Historians have given little attention to the production of tobacco in Veracruz, despite the extensive system of contracts and the presence of a factory in Orizaba. For the most part, they have been content to present a few figures on tobacco planting or a few comments on the problem of contraband. The best sources are Manuel B. Trens, Historia de Veracruz and Luis Chavez Orozco and Enrique Florescano, Agricultura e industria textil de Veracruz, Siglo XIX.91 Additional comments can be found in the works of Joaquin Arroniz, Enrique Herrera Moreno, Ernesto Lemoine Villacana, Vicente Segura and Manuel Rivera Cambas.92

A lack of systematic research on the economic history of EighteenthCentury Mexico limits our ability to understand the tobacco monopoly in the context of colonial economic history. Nevertheless, a few important works on the eighteenth-century economy should be mentioned. The best study of the organization of the real hacienda is Andres Lira Gonzalez' "Aspecto fiscal de la N.E. en la segunda mitad del siglo XVIII," a work which employs the Historia general of Fonseca and Urrutia.93 D.A. Brading, in Miners and Merchants in Bourbon Mexico, 1763-181094 offers a useful essay on the changes in government, including the real hacienda. Overviews of the colonial economy can be found in the works of Diego Lopez Rosado and Eduardo Arcila Farias, and economic data is also available in the more general studies of Lillian Fisher, Luis Chavez Orozco, Agustin






18

Cue Canovas and Charles Cumberland.95 The best work to date on the eighteenth century economy, Enrique Florescano's Precios del Maiz y Crisis Agricolas en Mexico (1708-1810),96 examines the problems associated with inflation in the late colonial period.97 Christon Archer's The Army in Bourbon Mexico, 1760-1810 provides useful social and economic data.

The essential material for a study of the tobacco monopoly is located in Mexican archives, primarily in two documentary collections in the Archivo General de la Nacion in Mexico City. The larger collection, called the Ramo de Tabaco, is made up of 533 volumes (legajos) of completely unindexed documents. In sampling the Ramo, it was not difficult to understand why historians have neglected the tobacco monopoly. The volumes are organized with no discernible attention to either chronological, thematic or geographical order. Although individual legajos often contain sections of related letters (expedientes), the collection as a whole presented a formidable obstacle to research. With the assistance of a colleague, Eugene Weimers, I was able to prepare a general index to the entire Ramo de Tabaco.98 The documentation covers the years from roughly 1764 to 1856, although information on the period from about 1800 to 1821 is quite limited. To my knowledge, the only researchers who have worked with the Ramo de Tabaco are Maria Amparo Ros and Sonia Lombardo de Ruiz, both of the Seminario de Historia Urbana, Departamento de Investigaciones Historicas, Instituto de Antropologia e Historia (INAH) in Mexico City.99

The second, and smaller collection, the 75-volume Renta de Tabaco, was the principal source for this study, mainly because of the readilyavailable data on the factory system. It was not until I located three of the legajos in the Biblioteca Nacional in Mexico City that I even became aware of the existence of this body of material. After discovering the remaining 72 volumes in the Archivo General, I was again forced to prepare







19

an index of the contents of the collection. I was unable to find any indication then or since of historical research employing even a single volume from the Renta. Unlike the ramo de tabaco, the renta was organized with a rough chronological and thematic order. Most of the volumes are entitled "Varios expedientes correspondientes a la Renta del Tabaco de N.E.," or some variation of that title. These legajos treat all aspects of the monopoly, including planting in Veracruz, accounts, personnel, prices and contraband cases. The remaining material covers the guard system from 1790 to 1808, and the royal factories from 1765 to 1808.

It is apparent that research on the tobacco monopoly in New Spain has not lagged because of inadequate documentation. Despite a certain amount of groundwork by researchers on monopolies in the other Spanish colonies, historians of New Spain for the most part have simply avoided working with the unpublished documentation, probably because it was unindexed. This study, for the first time, draws upon the enormous quantity of material available in the Ramo de Tabaco and Renta de Tabaco collections. In conducting my research for the dissertation, I determined that the most useful contribution I could make would be an overview of the organization and development of the monopoly up to the outbreak of the Hidalgo revolt in 1810. The study concentrates on the years from 1764 until 1780, the period during which the basic organization of the monopoly was developed. The volume of data makes a comprehensive overview of such a wide-ranging and complex institution impossible, and as is often the case, more questions are raised than answered. It is hoped, however, that the following analysis will provide an understanding of the characteristic features of the tobacco monopoly, of its development from 1765 to 1810 and of its importance to the colonial and metropolitan economies.







20



NOTES



1. Lucas Alaman, Historia de Mexico (5 vols.; Mexico, 1942), I, 471-474.

2. Spanish words and phrases will be employed throughout the dissertation. They will be underlined when first cited and, when possible, an English explanation or translation will be provided. The words will not be underlined in subsequent citations.

3. Figure 1 is compiled from the following sources:

January 1, 1781, Relacio'n de los empleados que tiene la Renta del Tabaco, sueldos que gozan, importe de Tabacos, fletes de Mar de papel y de tierra, gastos ordinarios y extraordinarios de Administracion, sueldos manufactura y gastos de Fabricas, y otros que se pagaron en el ano entero de 1779. .. Archivo General de la Naci6n, Mexico (hereafter cited as AGN), Renta de Tabaco (hereafter cited as Renta), vol. 6, fols. 222-270vuelta (vuelta hereafter abbreviated as v).
April 20, 1782, List of administrations of the Renta del Tabaco, AGN, Renta, vol. 3, fols. 182-185v.
Peter Gerhard, A Guide to the Historical Geography of New Spain (Cambridge, 1972).
Philip Wayne Powell, Soldiers, Indians and Silver: the Northwestern Advance of New Spain, 1550-1600 (Berkeley, 1962).
Joseph Antonio de Alzate y Ramirez, Nuevo mapa geographico de la America Septentrional perteneciente al virreynato de Mexico (1768), in Jorge Tamayo, Geografia General de M4xico (4 vols.; Mexico, 1962), I.

4. The famous seventeenth-century decline of Spain is discussed in J.H. Elliott, Imperial Spain, 1469-1716 (New York, 1963); J.H. Elliott, "The Decline of Spain," Past and Present, vol. 20 (1961), 52-75; Earl J. Hamilton, War and Prices in Spain, 1651-1800 (Cambridge, 1947); Earl J. Hamilton, "The Decline of Spain," Economic History Review, vol. 8 (1938), 168-179; Earl J. Hamilton, "Money and Economic Recovery in Spain Under the First Bourbon, 1701-1746," Journal of Modern History, vol. 15 (1943), 192-206; Henry Kamen, The War of Succession in Spain, 1700-1715 (Bloomington, 1969); John Lynch, Spain Under the Hapsburgs, Vol. II: Spain and America, 1598-1700 (Oxford, 1969); Jaime Vicens Vives, An Economic History of Spain (Princeton, 1969); Jaime Carrera Pujal, Historia de la economia espaiola (2 vols.; Barcelona, 1943-1945).

5. Kamen, pp. 199-241,notes the importance especially of French ambassador Michel-Jean Amelot and financial advisors Jean Orry and Jean de Brouchovan.

6. It is not intended here to review the entire range of the reforms in Spain. The best overview of the eighteenth century in Spain is Richard Herr, The Eighteenth-Century Revolution in Spain (Princeton, 1958). On economic reform, see Vicens Vives, Economic History of Spain, pp. 471-604.







21

7. The works cited are Uztiriz' Terica y practice del comercio y de la marina (1724) and Campillo's Nuevo sistema de gobierno econdmico para la America (1740).
Miguel Artola, "Campillo y las reformas de Carlos III," Revista de Indias, vol. 12 (1952), 687,refers to the "extraordinary diffusion" of Colbert's though in Spain after Philip V's arrival; Herr, p. 48 states: "It was Colbert's mercantilism which first stirred Spanish economic thought to renewed activity in the eighteenth century." Earl J. Hamilton, "The Mercantilism of Geronimo de Uztariz," in Economics, Sociology and the Modern World, ed. by Norman E. Himes (Cambridge, 1935), p. 112,documents Colbert's influence on Uztariz. See also Vicens Vives, Economic History of Spain, p. 526; Jose Munoz Perez, "Los proyectos sobre Espana e Indias en el siglo XVIII: el proyectismo como genero," Revista de estudios politicos, vol. 81 (1955), 190; Eduardo Arcila Farias, Reformas econ6micas del siglo XVIII en Nueva Espaia (2nd ed.; 2 vols.; Mexico, 1974), I, 9; Ricardo Levene, Investigaciones acerca de la historia econ6mica del virreinato del Plata
(2nd ed.; 2 vols.; Buenos Aires, 1952), I, 235-270.

8. Jan De Vries, Economy of Europe in an Age of Crisis, 1600-1750
(Cambridge, 1976), pp. 236-237. For a discussion of theories and practice of mercantilism see D.C. Coleman, ed., Revisions in Mercantilism (London, 1969).

9. William P. Glade, The Latin American Economies: A Study of their Institutional Evolution (New York, 1969), pp. 26-67.

10. Ibid., p. 67.

11. Herbert I. Priestley, Jose de Galvez, Visitor General of New Spain (1765-1771) (Berkeley, 1916), p. 15. See also Alaman, I, 91-92.

12. Modesto Lafuente, Historia general de Espaia, desde los tiempos primitivos hasta la muerte de Fernando VII (27 vols.; Barcelona, 1889), vol. 14, 46; Joseph Townsend, A Journey Through Spain in the Years 17861787 (2 vols.; Bath, 1814), I, 397. The Spanish fiscal system of the eighteenth century has not been the topic of much historical research. Major sources, such as Vicens Vives, Economic History of Spain, were not helpful.

13. Robert J. Shafer, The Economic Societies in the Spanish World, 1763-1821 (Syracuse, 1958), p. 7.

14. Spain and England were at war from 1702-1713, 1718-1720, 17271729, 1739-1748, 1762-1763, 1779-1783, 1796-1802 and 1804-1808.

15. Earl J. Hamilton, "Monetary Problems in Spain and Spanish America, 1751-1800," Journal of Economic History, vol. 4 (1944), 21-48; Earl J. Hamilton, "War and Inflation in Spain, 1780-1800," Quarterly Journal of Economics, vol. 59 (1944-1945), 36-77; Hamilton, War and Prices; Herr, Revolution; Vicens Vives, Economic History of Spain.







22

16. Christon I, Archer, The Army in Bourbon Mexico, 1760-1810 (Albuquerque, 1977); Lyle N. McAlister, The "Fuero Militar" in New Spain, 1764-1800 (Gainesville, 1957); Maria del Carmen Velazquez, El estado de guerra en Nueva Espana, 1760-1808 (Mexico, 1950); Richard Pares, War and Trade in the West Indies, 1739-1763 (London, 1963).

17. Stanley J. Stein and Barbara Stein, The Colonial Heritage of Latin America: Essays on Economic Development in Perspective (New York, 1970), p. 97.

18. John Lynch, The Spanish American Revolutions, 1808-1826 (New York, 1973), p. 5.

19, J.R. Fisher, Government and Society in Colonial Peru: The Intendant System, 1784-1814 (London, 1970), p. 1.

20. Stein, Colonial Heritage, p, 88.

21. D.A. Brading, Miners and Merchants in Bourbon Mexico, 1763-1810 (London, 1971), p. 30.

22. N.M. Farris, Crown and Clergy in Colonial Mexico, 1759-1821. The Crisis of Ecclesiastical Privilege (London, 1968).

23. Archer, Army in Bourbon Mexico.

24. There is no major study of the intendant system in New Spain.
For an overview of its operation in the New World, see Luis Navarro Garcia, Intendencias en Indias (Sevilla, 1959); for New Spain see Brading, Miners and Merchants, pp. 33-92, and Brian Hamnett, Politics and Trade in Southern Mexico, 1750-1821 (Cambridge, 1971). For Peru, see J.R. Fisher, Government and Society in Colonial Peru. For Argentina, see John Lynch, Spanish Colonial Administration, 1782-1810: The Intendant System in the Viceroyalty of the Rio de la Plata (London, 1958).

25. The visita was a major inspection and reform in the colonies. The employment of the visita was called for in Jose Campillo's Nuevo sistema de govierno economico para la America (1740). Brading, Miners and Merchants, p. 25 refers to Campillo's work as the "reformer's bible." See also J.R. Fisher, Government and Society in Colonial Peru, p. 3; Mark A. Burkholder and D.S. Chandler, From Impotence to Authority: The Spanish Crown and the American Audiencias, 1687-1808 (Columbia, 1977), p. 84.

26. Maria Angeles Cuello Martinell, "La Renta de los Naipes en Nueva Espafa," Anuario de Estudios Americanos, vol. 22 (1965), 245.

27. Brading, Miners and Merchants, p. 29; Bernard Bobb, The Viceregency of Antonio Maria Bucareli in New Spain, 1771-1779 (Austin, 1962), p. 250 and Arcila Farias, Reformas econ6micas, vol. 2, 170 indicate that the alcabala finally came under full direct administration on October 3, 1776; Robert S. Smith, "Sales Taxes in New Spain, 1575-1770," Hispanic American Historical Review, vol. 28 (1948), 36 notes the royal order of February 6, 1764 calling for direct administration of the alcabala as contracts expired. Galvez had the power to continue leases and he did so outside the major cities.







23

28, Andres Lira Gonzalez, "Aspecto fiscal de la N,E. en la segunda mitad del siglo XVIII," Historia Mexicana, vol, 17 (1968), 377.

29. Lynch, Spanish American Revolutions, p, 11.

30. Brading, Miners and Merchants, p. 29.

31. An explanation of the different techniques used to collect and administer Crown revenues can be found in Priestley, pp. 312-314 and in Guillermo Cispedes del Castillo, "Reorganizacion de la hacienda virreinal peruana en el siglo XVIII," Anuario de Historia de Derecho Espanol, vol. 23 (1953), 361. Administraci6n was direct administration by royal officials; arrendamiento was leasing to individuals; and encabezamiento was leasing to towns, guilds or other corporate entities.

32. Bobb, p. 205.

33. Priestley, p. 76.

34, Lira Gonzalez, 371-375; Manuel Yaiez Ruiz, El problema fiscal
en las distintas etapas de nuestra organizacion polltica (3 vols.; Mexico, 1958), vol. 1, 53-61,

35. Brading, Miners and Merchants, p. 29.

36, Alexander von Humboldt, Political Essay on the Kingdom of New Spain, trans, by John Black (4 vols,; London, 1811), vol. 4, 240-242.

37. M, Colmeiro, Historia de la economia political en Espana (2 vols.; Madrid, 1965); Carrera Pujal, Historia de la economia espahola; Vicens Vives, Economic History of Spain.

38. Antonio Ballesteros y Beretta, Historia de Espa a y su influencia en la historia universal (12 vols.; Barcelona, 1958); Lafuente, Historia general de Espaia; Herr, Revolution; Jean Sarrailh, La Espaia ilustrada en la segunda mitad del siglo XVIII (Mexico, 1957); Kamen; Antonio Dominguez Ortiz, La sociedad espalola en el siglo XVIII (Madrid, 1955).

39. Agnes Stapff, "La renta del tabaco en Chile de la epoca virreinal," Anuario de Estudios Americanos, vol. 18 (1961), 2; Charles E. Kany, Life and Manners in Madrid, 1750-1800 (Berkeley, 1932), p. 225; Jacob M. Price, France and the Chesapeake: A History of the French Tobacco Monopoly, 16741791, and of its Relationship to the British and American Tobacco Trades
(2 vols.; Ann Arbor, 1973), vol. 1, 17, offers 1636 as the date of the monopoly in Castile and Leon.

40. Lynch, Spain Under the Hapsburgs, 195.

41. Antonio Dominguez Ortiz, Politica y hacienda de Felipe IV (Madrid, 1960), pp. 236, 337.

42. Jose Perez Vidal, Historia del cultivo del tabaco en Espana, (Madrid, 1956), pp. 30-34. Ballesteros, vol. 9, 191 also gives 1701 as the date of the establishment of the monopoly.







24

43, Kamen, p, 72,

44. John P. Harrison, "The Colombian Tobacco Industry from Government Monopoly to Free Trade, 1778-1876," Ph.D, Dissertation (University of California, 1951), pp. 64-65.

45. Lafuente, vol. 14, 46.

46. Although figures for the Spanish tobacco monopoly are sporadic,
some indication of the growth of revenues from the monopoly in the eighteenth century can be given (figures are in reales):

1702 6,861,679 1778 80,000,000 1713 14,223,432 1783 103,014,936 1722 14,778,030 1785 100,000,000 1750 69,000,000 1786 66,166,319 1768 66,866,319 1797 82,014,936 1774 68,960,885 1797 83,000,000
1775 63,469,108

Figures for 1702 and 1713 are from Kamen, pp, 208, 224; for 1722, 1768, 1774, 1778 and 1786 from Townsend, vol, 1, 408-409, 410; for 1750 and 1785 from Kany, p. 226; for 1775, 1783 and first 1797 from Ballesteros, vol. 9, 191; and for second 1797 from Vicens Vives, Economic History of Spain, p. 594.

47. Stapff, 3; Lafuente, vol. 14, 46 states that putting the monopoly under direct administration in 1740 led to immediate and significant increases in revenues.

48. Stapff, 3.

49. Lafuente, vol. 14, 46.

50. Heinrich Friedlander, Historia economic de Cuba (La Habana, 1944), pp, 63-72.

51, For comments on the revolts of the vegueros (planters) and on
the Cuban monopoly in general, see Jose Rivero Muiiz, Tabaco: su historia en Cuba (2 vols,; La Habana, 1964-1965); Philip Foner, A History of Cuba and its Relations with the United States (2 vols.; New York, 1962-1963); Julio Le Riverend, Economic History of Cuba (Havana, 1967); Fernando Ortiz, Cuban Counterpoint: Tobacco and Sugar (New York, 1947); Ramiro Guerra y Sanchez, ed., Historia de la naci6n cubana (10 vols.; La Habana, 1952), vol. 3; Gaspar Jorge Garcia Gallo, Biografia del tabaco Habano (La Habana, 1959).

52. Friedlander, p. 91. Tobacco monopoly administrations were established in Santo Domingo in 1763 and in Puerto Rico in 1785. For Santo Domingo, see Frank Moya Pons, Historia colonial de Santo Domingo (Santiago, 1974), pp. 308-309; for Puerto Rico, see Jesus Cambre Marino, "Puerto Rico bajo el reformismo ilustrado: despertar de la burguesia criolla," Revista de Historia de America, vol. 73-74 (1972), 60, and Bibiano Torres Ramirez, La isla de Puerto Rico (1765-1800) (San Juan, 1968), p. 94.







25

53. Guillermo Cespedes del Castillo, "La Renta de Tabaco en el Virreinato de Peru," Revista Historica, vol. 21 (1954), 138-143.

54, Ibid., 154, 158,

55. Ibid., 161. Manuel de Amat, Memoria de gobierno (1761-1776) (Sevilla, 1947), p. 573 provides figures for the first twenty years of the monopoly in Peru, See also J.R. Fisher, Government and Society in Colonial Peru, pp. 102-111,

56. Stapff, 2; Cespedes del Castillo, "La Renta de Tabaco," 160-161,
presents data on Chile until 1785 when the intendant system changed administrative organization,

57. Cespedes del Castillo, "La Renta de Tabaco," 160.

58. Herbert S. Klein, "Structure and Profitability of Royal Finance in the Viceroyalty of the Rio de la Plata in 1790," Hispanic American Historical Review, vol. 53 (1973), 449; for comments on Argentina, see Lynch, Spanish Colonial Administration, and Levene; for brief comments on Paraguay, see Horacio William Bliss, Del virreinato a Rosas: ensayo de historia econ6mica de Argentina, 1776-1829 (Tucuman, 1969), p. 75 and Julio C6sar Chaves, Compendio de historia Paraguaya (Author, 1960), p. 103.

59. Marco Antonio Fallas, La factoria de tabacos de Costa Rica
(San Jose, 1972); on Guatemala see Valentin Solorzano Fernandez, Historia de la evoluci6n econ6mica de Guatemala (Mexico, 1947).

60. Harrison, "Colombian Tobacco Industry"; Luis Sierra, El tabaco en la economia colombiano del siglo XIX (Bogota, 1971).

61. Harrison, "Colombian Tobacco Industry,"pp. vii, 84.

62. Ibid., pp. 21-26.

63. Luis Sierra, p. 34.

64. Eduardo Arcila Farias, Economia colonial de Venezuela (Mexico, 1946).

65. Figures are from Harold A. Bierck, "Tobacco Marketing in Venezuela, 1798-1799: An Aspect of Spanish Mercantilist Revisionism," Business History Review, vol. 39 (1965), 492. Arcila Farias, Venezuela, p. 332 shows a figure of 995,277 pesos for 1795; Federico Brito Figueroa, La estructura econ6mica de Venezuela colonial (Caracas, 1963), p. 234, shows 724,430 pesos for 1802.

66. Price, vol. 1, 21.

67. Price, vol. 1, xviii, 17 and vol. 2, 840. United General Farms leased the monopoly from 1680-1697 and from 1730 until its abolition in 1791.







26

68. Informe general que en virtud de real orden instruyo y entrego el Exmo, Sr. Marques de Sonora siendo visitador general de este reyno al Exmo. Sr. Virrey Frey D. Antonio Bucarely y Ursua, con fecha de 31 de diciembre de 1771 (Mexico, 1867).

69. Historia general de real hacienda, escrita por D, Fabian de Fonseca y D. Carlos de Urrutia, por orden del Virey, Conde de Revillagigedo (1794) (6 vols,; Mexico, 1845-1853), vol. 1, vi-vii. The viceroy also appointed Joaquin Maniau y Torquemada and Jose Ignacio Sierra to assist in preparation of the report.

70, Compendio de la historia de la real hacienda de Nueva Espa a, escrito en el ano de 1794 (Mexico, 1914).

71. The contaduria was the office of a fiscal official, the contador. The contador was not strictly an accountant, because he also had administrative responsibilities, sometimes involving determination of policy, such as in the tobacco monopoly.

72. Priestley, p. 82.

73. Conde de Revillagigedo, Informe sobre las misiones, 1793, e Instruccidn reservada al Marques de Branciforte, 1794, ed. by Jose Bravo Ugarte (Mexico, 1966).

74. Gazetas de Mexico. Compendio de noticias de Nueva Espana desde
principios del aio de 1784, ed. by Manuel Antonio Valdes (16 vols.; Mexico, 1784-1809),

75. Juan de Viera, Compendiosa narracion de la ciudad de Me'xico (1777) (Mexico, 1952); Jos6 Gomez, Diario curioso de M6xico (1777-1785). Vol. 8 of Documentos para la historia de M6xico (8 vols.; Mexico, 1854).

76. This report is entitled Cuadro de la situacion economica Novohispana en 1788. Vol. 2 of Documentos para la historia econ6mica de M6xico, ed. by Luis Chavez Orozco (13 vols.; Mexico, 1933-1936).

77, Dictamen del Virrey Revillagigedo sobre la ordenanza de intendentes de la Nueva Espaia (1786). Vol. 4 of Documentos para la historia economic.

78. Miguel Jose de Azanza, Instruccion reservada que dio el Virrey Don Miguel Jose' de Azanza a su sucesor Don Felix Berenguer de Marquina,
pr6logo y notas de Ernesto de la Torre (Mexico, 1960); Marquis de Croix, Instruccion del Virrey Marquis de Croix que deja a su sucesor Antonio Marfa Bucareli, pr6logo y notas de Norman F. Martin (Mexico, 1960).

79. Enrique Florescano and Isabel Gil, eds., Descripciones economicas generales de Nueva Espana, 1784-1817 (Mexico, 1973), p. 128.

80. Humboldt, vol. 4, 211,

81. Previously cited.







27

82, Alaman, vol. 1, 471-474,

83. Resena historica de la renta del tabaco, tomada desde la epoca del Exmo. Sr. Conde de Revillagigedo (1850) (Mexico, 1850).

84. Hubert H. Bancroft, History of Mexico (6 vols.; San Francisco, 1883-1885), vol. 3; Tadeo Ortiz de Ayala, Resumen de la estadfstica del Imperio Mexicano (1822) (Mexico, 1968); Joel R. Poinsett, Notas sobre M6xico (1822) (Mexico, 1950); H.G. Ward, Mexico in 1827 (2 vols.; London, 1828).

85. JosS Maria Luis Mora, Me'xico y sus revoluciones (3 vols.; Mexico, 1950), vol. 1, 213-215.

86, Previously cited.

87. C.H. Haring, The Spanish Empire in America (New York, 1947);
Jose Maria Marroqui, La ciudad de Mgxico (2nd ed.; 3 vols.; Mexico, 1969), vol. 2; Arcila Farias, Reformas econ6micas.

88. Jose Antonio Calderon Quijano, Los virreyes de Nueva Espana en el reinado de Carlos III (2 vols.; Sevilla, 1967-1968) and Los virreyes de Nueva Espaa en el reinado de Carlos IV (2 vols.; Sevilla, 1974).

89. Bobb previously cited. R6mulo Velasco Ceballos, La administracio~n de D. Frey Antonio Maria de Bucareli y Ursua (2 vols.; Mexico, 1936).

90. Eduardo Baez Macfas, "Planos y censos de la ciudad de Mexico, 1753," Boletfn del Archivo General de la Nacion, 2nd ser., vol. 7 (1966), 407-484 and vol. 7 (1967), 485-1156.

91. Manuel B. Trens, Historia de Veracruz (6 vols.; Jalapa, 1948); Luis Chavez Orozco and Enrique Florescano, Agricultura e industria textil de Veracruz. Siglo XIX (Xalapa, 1965),

92, Joaquin Arroniz, Ensayo de una historia de Orizaba (2 vols.;
Mexico, 1959); Enrique Herrera Moreno, El canton de Cordoba: Apuntes de geografia, estadistica e historia (2 vols.; Mexico, 1959); Ernesto Lemoine Villacaa, "Documentos y mapas para la geografia historica de Orizaba (1690-1800)," Boletin del Archivo General de la Nacion, 2nd ser., vol. 3 (1962), 461-527; Vicente Segura, Apuntes para la estadistica del departamento de Orizaba (1826) (Jalapa, 1831); Manuel Rivera Cambas, Historia antigua y moderna de Jalapa y de sus revoluciones del estado de Veracruz
(17 vols.; Mexico, 1959).

93. Previously cited.

94. Previously cited.

95. Diego Lopez Rosado, Ensayos sobre la historia economic de Mexico (Mexico, 1957); Curso de historia econ6mica de Mexico (Mexico, 1963); Historia y pensamiento econ6mico de Mexico: mineria, industria (Mexico, 1968); and Historia y pensamiento econ6mico de Mexico: comunicaciones y







28

transportes, relaciones de trabajo (Mexico, 1969). Arcila Farias, Reformas econ6micas; Lillian E. Fisher, The Background of the Revolution for Mexican Independence (Boston, 1934); Luis Chavez Orozco, Historia economica y social de Mexico (Mexico, 1938); Agustin Cue Canovas, Historia social y econdmica de Mexico, 1521-1810 (Mexico, 1946); Charles C, Cumberland, Mexico: The Struggle for Modernity (London, 1968).

96. Enrique Florescano, Precios del maiz y crisis agricolas en Mexico (1708-1810) (Mexico, 1969),

97. Previously cited.

98. The Seminario de Historia Urbana, Departamento de Investigaciones Historicas, Instituto Nacional de Antropologia e Historia at the Castillo de Chapultepec and under the direction of Alejandra Moreno Toscano, has prepared an index of ninety of the 533 volumes. Since I was unable to obtain anything more than a list of the volumes indexed, I decided to include those ninety volumes in my own general index of the Ramo.

99. Maria Amparo Ros, "La real fabrica de tabaco: apuntes acerca de la organizacion del trabajo," Seminario de Historia Urbana, Investigaciones sobre la Historia de la Ciudad de Mexico, II (Mexico, 1976), pp. 97-103; Sonia Lombardo de Ruiz, La Ciudadela: Ideologia y estilo en la arquitectura del siglo XVIII (Mexico, 1976).















CHAPTER TWO
THE PLANNING OF THE TOBACCO MONOPOLY



The first attempt by the Crown to establish a tobacco monopoly in New Spain came in 1747, two years after the royal order to organize one in Peru. The viceroy of New Spain, Conde de Revillagigedo the Elder, however, opposed the project because, he argued, planters and cigarmakers (pureros) would not accept it.1 On July 23, 1761 the minister of the Indies, Julian de Arriaga, revived the project when he sent a royal order to Viceroy Marques de Cruillas (1760-1766) indicating that the Crown was modifying its approach to the creation of a monopoly. He noted, but did not specify, certain "obstacles" which had to be overcome in the colony. The new method was to order snuff from Havana and to sell it in a few stores in Mexico City on the account of the real hacienda. The explicit intention of the Crown was to undermine private snuff merchants by selling the product slightly below current prices. The competition would force them to gradually abandon their shops, leaving the King as the "only seller" of snuff. It was expected that this technique would "imperceptibly" conquer all resistance to a tobacco monopoly, although no mention was made at the time of monopolizing rama or of manufacturing puros and cigarros. Arriaga advised the viceroy that he had already arranged for delivery of snuff to New Spain and ordered him simply to advise authorities in Havana which classes to send.

The outbreak of war against England in 1762 delayed the execution of this order. On October 16, 1764, however, the snuff finally arrived 29







30

in Mexico City and Juan Jose de Echeveste was commissioned to oversee its sale. It was sold at twenty-five to thirty-three percent below current prices, depending upon its quality. The yield was relatively insignificant compared to the revenues the monopoly would produce in subsequent years. Snuff sales were absorbed into the monopoly at the end of Echeveste's commission in March, 1765, at which time he delivered only 4,424 pesos to the director of the tobacco monopoly, Jacinto Diez de Espinosa,
3
who had arrived from Spain late in 1764.

The actual decision to establish the tobacco monopoly in New Spain

came in a royal order of August 13, 1764 and in an accompanying Instruccion of the same date. The order was a general statement advising the viceroy of the Crown's decision. The Instruccion outlined actual procedures to be followed. Both documents strongly emphasized that the purpose of the monopoly was to produce revenues to cover the increased costs of defending the Spanish Empire. Recent events, most notably the loss of Havana to England in the Seven Years War in 1762, had generated fears that the colonies were no longer secure against foreign invasion. In the ensuing debate in Spain, it was decided that military reform was essential in New
4
Spain to protect Veracruz against the same fate suffered by Havana.

Because Spain was unable to pay the entire cost of defending the

empire, the colonies had to share the burden. A secret defense committee drafted a plan for creating colonial armies in 1764, and in November of that year Lieutenant General Juan de Villalba y Angulo arrived in New Spain as comandante general and inspector general of the army to implement the reform program. The wording of both the royal order and the Instruccion of 1764 made abundantly clear the relationship between military reorganization and the monopoly. The "excessive costs" of raising regular and militia units in the colonies, the Instruccion declared, made the






31

imposition of some form of tax in the colonies absolutely imperative. Since "no Prince" was without a monopoly of tobacco, and since tobacco was a substance unnecessary to sustain human life, the creation of the monopoly was the best and least burdensome way of increasing revenues. No person was compelled to buy tobacco, the Instruccion noted, and the monopoly would not damage commerce in the colony because the tobacco industry was small and widely-distributed.5

The order advised the viceroy that only a director and a contador

were being sent from Spain, to participate in preliminary planning. Both men were experienced in the monopoly in the peninsula, but were to follow the guidelines of the royal Instruccion for New Spain. Once the monopoly was in operation, a treasurer, two warehouse employees and three officials
6
to assist in the contaduria and treasury could be appointed in New Spain. Seventeen articles of the Instruccion outlined organizational procedures.
77
Their provisions were to be implemented by a junta de tabaco, made up of the viceroy as president and juez conservador of the monopoly; the visitor general; the senior criminal judge (decano) of the audiencia; the alcalde del crimen of the audiencia, Sebastian Calvo; and the director of the monopoly. Only Calvo was mentioned by name. The junta was to meet to determine the actual feasability of the royal order and, if it were deemed workable, to decide upon the best method of complying with its provisions. The Crown urged the junta to be prompt but careful, in order to avoid provoking resistance. Fear of public disturbances was reflected in the authorization given the junta to forego any public announcement and to proceed cautiously.

The Instruccion outlined both short and long term procedures for

eliminating private growing, manufacture and sale of tobacco. From the outset, the Crown intended that the monopoly would be a large-scale,






32

vertically-integrated economic institution. The junta was ordered to collect all rama, puros and cigarros from the merchants and the private shops. Sales of these products would be permitted only from governmentlicensed estanquillos. Prices were to be set by the junta, but only slightly higher than the current rate in order to avoid antagonizing consumers. The same was to be done for snuff, all of which was to be imported from Havana. As a temporary measure, private cigarro-makers (cigarreros) could continue to produce puros and cigarros, known collectively as labrados, by purchasing tobacco from the Renta. By examining previous methods used by the tobacco industry, the junta was to determine the number of cigarros to be made by the cigarreros from each libra8 of rama, in order to prevent fraud against the monopoly and the public. Ultimately, however, all tobacco shops were to be abolished. "Little by little" the "excessive" number of shops was to be reduced, bringing the owners and workers into the Renta. Although the Instruccion did not specify the creation of factories, their establishment was implied by the abolition of the private shops.

The planting of tobacco was restricted to certain areas in the modernday state of Veracruz. The King indicated that he had intended to abolish all planting in the colony, but his "royal clemency" inclined him to permit growing in the jurisdictions of Cordoba, Orizaba and Teusitlan. The viceroy ordered the junta to meet with representatives of the planters to determine the quantity and quality of tobacco and the prices the Renta would pay. Prices were to be set at a level which would assure profits to the planters in the growing and cultivation of tobacco, thereby encouraging them to improve techniques. All tobacco on hand was to be purchased and the junta was to guarantee an adequate supply for the
9
colony at all times.







33

The first junta de tabaco met in Mexico City on December 11, 1764. Its members were Viceroy Cruillas, as president; Francisco Echavarri, as senior judge of the audiencia; Sebastian Calvo, as alcalde del crimen of the audiencia; and Espinosa, as director of the monopoly. The visitor general, Francisco de Armona, had died on the voyage from Spain, leaving that position vacant until the new visitor, Joseph de Galvez, arrived in
10
1765. The junta agreed to establish the monopoly throughout New Spain and published its decision on December 14, 1764.11

Monopolization of rama and snuff began with a viceregal order of

January 18, 1765 ordering all producers of snuff and labrados, merchants, storekeepers or any others involved in the sale of tobacco in Mexico City to declare, under oath, and to deliver within eight days, all tobacco in their possession.12 On February 21, the order was repeated, promising prompt evaluation and payment for tobacco delivered.13 On April 22, the viceroy directed all justices in the colony to report the amount of rama in their jurisdictions, indicating separately the rama to be harvested that year. The justices were to determine owners, quality and value of the tobacco and to.authorize no further planting outside the designated
14
zones.

While these measures were being carried out, the monopoly also

initiated procedures to determine who would be permitted to participate in the tobacco industry. Only "professional" cigarreros and pureros were to be allowed to continue producing labrados, and on a "temporary" basis.15 These persons were defined as those who were commonly regarded as professional tobacco craftsmen and who owned shops limited to only this business. The distinction was important because all other merchants were prohibited from engaging in the sale or purchase of tobacco in any
16
form. Owners of stores (pulperias) were permitted, however, to purchase







34

a "prudent" number of puros or cigarros for use in what was called "adeala," a variation of modern-day green stamps.17

From the outset, however, conflict developed over the method of

establishing the tobacco monopoly. The first controversial issue arose in a debate between Espinosa and Sebastian Calvo over Espinosa's proposal to lease the monopoly, rather than place it under direct royal administration. Espinosa suggested leasing the monopoly by bishoprics, except for the archbishopric of Mexico, which would be administered directly by Renta officials. Calvo, as a member of the junta, vigorously opposed Espinosa's plan as a violation of royal orders. Galvez adopted the same point of view upon his arrival in Mexico several months later, as indicated in his comment that in the April junta, Espinosa had pushed his plan for 18
renting the monopoly "with too much persistance." Meanwhile, Espinosa was able to convince the junta to rent the monopoly outside the archbishopric, despite Calvo's continued opposition.19 The agreement was formalized in an order of June 16 which outlined twenty conditions for leasing the monopoly to potential bidders. Espinosa intended to lease the Renta in the bishoprics of Puebla, Oaxaca, Guadalajara, Valladolid and Durango. Contractors were to purchase snuff called exquisito, fino and comun at 12, 8 and 4 reales per libra, respectively, and sell it to consumers at 20, 16 and 8 reales, respectively. They were to purchase rama supremo, medio and infimo at 4 reales per libra and sell it at 6 reales. All tobacco would be purchased from the monopoly.20 The order made provisions for weighing tobacco and for settling losses during transport. It also included arrangements for collecting tobacco still outstanding, whether rama or snuff, and stated penalties against tardy individuals. The restriction of planting to Cordoba, Orizaba and Teusitlan was repeated. Leases were to last five or six years, with no overlapping of bishoprics. Final







35

articles dealt with payments, accounting, prevention of contraband and prosecution for fraud.21

Viceroy Cruillas approved Espinosa's decision in a letter of July 30, 1765, to his superiors in Spain. Cruillas stated that he wished to establish the Renta under direct administration throughout the kingdom, but slow communications and lack of trained personnel in the colony required him to accept the proposals of the director for leasing. The viceroy reported that the monopoly was progressing well, noting that he had employed 120,000 pesos from the treasury to pay part of the value of 22
tobacco collected so far.
23
Galvez, who had arrived in Veracruz on July 18, 1765, disagreed with the viceroy's position. It was with the "greatest distress" he later noted in his 1771 Informe, that he discovered that in Veracruz and throughout the viceroyalty tobacco was being traded freely. In Mexico City, moreover, there was a general uproar against the Renta because of serious 24
delays in paying for tobacco collected. Galvez was surprised by the situation, since he had expected his role in the monopoly to be only that of "perfecting" its organization in conformity with royal instructions. He understood that the King wished to establish tobacco monopolies throughout the American colonies, and therefore believed Espinosa's actions to 25
be an offense to royal authority and to "public faith."

Galvez' attitude toward his role in the tobacco monopoly was largely determined by a special instruction of April 22, 1765,which he received from the Marques de Esquilache, minister of War and Hacienda, upon his arrival in New Spain. Although he was to take the place of the deceased visitor general, Francisco de Armona, on the junta, Esquilache's order permitted him to claim special authority.26 Esquilache informed him







36

that he was to look upon the tobacco monopoly as the "principal object of [his] commission," the establishment of which would be "one of the most agreeable services rendered to the King."27 The powers granted him as visitor general with faculties of intendant authorized him to intervene directly in all decisions made by the junta.28 29
Upon arriving in Mexico City on August 26, Galvez noted that no juntas had met since June. After consulting the viceroy, he called a meeting for September 2. On this date and in a second junta of September 6, Galvez attacked the decision to lease the monopoly. He believed that Espinosa's insistence on renting was a violation of royal intentions. Moreover, the failure of the director to assure payments for delivered tobacco discredited the Renta, as indicated by the fact that no bidders had come forth since publication of the June 16 order calling for contracts.30 Still worse, the monopoly had a serious deficit. From 1764 until August 31, 1765, its income, including 4,424 pesos of snuff revenues, was only 29,755 pesos, while costs were 35,534 pesos. This was a 5,788peso deficit, without including debts for salaries, tobacco collected or the value of the tobacco harvest. To Galvez, this indicated the neglect of the tobacco monopoly by the junta.31

In a junta of September 6, the new officials admitted that the reason 32
for leasing the monopoly was because of a scarcity of funds, Galvez, however, overcame this obstacle by revealing that he had access to loans of over one million pesos from certain "subjects," to be used to establish the monopoly under direct royal administration.33 With his promise of restoring the credit and credibility of the Renta, Galvez convinced the junta to yield ground on the leasing issue. In fact, the visitor produced 2,000,000 pesos to pay for tobacco collected and for other costs. The planters received 70,000 pesos from the contador of the monopoly,







37

Antonio del Frago, to cover costs until Galvez visited the growing region in October, 1765,34

An order of September 10, 1765,formalized the decision to establish the tobacco monopoly under direct royal administration. It declared that administrative districts (factorias) would be created in Puebla, Guadalajara, Oaxaca, Veracruz and Campeche.35 The monopoly had already established four factorias under administrators called factors (factores), in each of the four growing regions, which were Cordoba, Orizaba, Teusitlan and Jalapa.36 The order also repeated earlier demands for the delivery of tobacco, indicating that penalties for illegal planting would be enforced. Collection and sale of the tobacco was placed in the hands of the magistrates throughout the colony. In the bishopric of Durango, in part of the bishopric of Guadalajara and in the Provincias Internas, the tobacco industry was to continue as previously for one year, except that all tobacco had to be purchased from the monopoly.37

Orders of September 14 and 20 expanded and clarified procedures for collection, payment and sale of tobacco and cancelled the June 16 call for bidders. Magistrates received orders to establish outlets and hire personnel to receive and sell rama on monopoly account.38 To prevent illegal planting or trafficking in tobacco, the Renta outlined a system of denunciation in which persons exposing fraud would receive one-third of the value of any seized tobacco.39

Galvez' annoyance with Espinosa also led.. to a number of significant changes in personnel during the month of September. He reinstated the treasurer of the monopoly, Juan Jose de Echeveste, whom Espinosa had forced to resign because of his inability to pay a bond.40 Galvez regarded Espinosa's justification as a pretense, because the Renta actually owed Echeveste money.41 A second important change was the promotion of the







38

contador, Antonio del Frago, to a position as co-director of the monopoly along with Espinosa, although at the same annual salary 2,000 pesos he earned as a contador. Espinosa received 4,000 pesos annually. This was a curious innovation, since Galvez later commented in his 1771 Informe that he had disapproved of the "absolute informality" and the "disorder and confusion" of the contaduria.42 Priestley suggests that the appointment of Frago as co-director was designed to reduce Espinosa's power and assure his obedience to royal instructions.43 Mathias de Armona, brother of the deceased visitor general, Francisco de Armona, replaced Frago as contador.44 Finally, Galvez replaced the warehousemen (fieles de almacenes) appointed in Mexico City by Espinosa. He argued that they were not following proper procedures, partially the fault of Espinosa, despite clear instructions on their duties. He also complained that tobacco monopoly offices generally operated without formal Spanish methods.45

Juntas of September 26 and October 9 completed the measures adopted by the monopoly while Galvez was present in Mexico City. They declared a final four-day amnesty for those who had not delivered their tobacco, 46
with a warning that houses and stores under suspicion would be searched. The junta of October 9 charged the acordada, a special judicial tribunal,47 with enforcing the laws against contraband, as had already been done with 48
various branches of the real hacienda. This decision was subsequently published in a viceregal order, in which the head of the acordada, Jacinto Martinez de Concha, was authorized to apprehend delinquents, prepare testimony and deliver prisoners and evidence to ordinary magistrates for trial. 49

According to Priestley, G lvez was highly pleased with his work during the month of September. In a letter to Arriaga, the visitor claimed that the tobacco monopoly had been established, in effect, by his actions in







39

September, to the "applause" of the entire viceroyalty. The inhabitants of the colony, Galvez noted, understood that the monopoly would relieve them of more burdensome taxes, and that the residents of Mexico City alone were purchasing over 500 pesos of tobacco daily. Galvez was so enthusiastic about the prospects of the monopoly that he declared to Arriaga: "'Before two years have elapsed this will be one of the most considerable revenues of the viceroyalty.'"'50

Galvez does not appear quite so confident in his Informe. He noted

that when he left Mexico City on October 10 for Cordoba, Orizaba and Jalapa to deal with the planters, the "proponents of leasing" were once again working against his efforts to establish the Renta under direct administration. Their first move was to persuade his source of funds, whom he referred to as the "Flotistas,"51 to rescind their promise. They were unsuccessful, however, since Galvez was able to procure over 600,00 pesos in loans from residents in Mexico City and Veracruz. He actually employed a sum of 588,747 pesos to pay for collected tobacco and newlyharvested tobacco and to pay for 21,384 reams of paper at the Jalapa fair. The paper was to be used to manufacture cigarros on royal account, one of Galvez' principal plans for the tobacco monopoly.52

It is difficult to understand Galvez' complaints about the "proponents of leasing" during his absence. In ten juntas and in two orders between his departure in October, 1765,and his return in late January, 1766, no significant alterations were made in the monopoly. The issue of leasing, in fact, gave way to a second and much more important conflict between Galvez and the director, in which Espinosa was joined by Viceroy Cruillas. The issue was whether or not the tobacco monopoly should manufacture labrados. In a junta of December 11, 1765, Espinosa attacked Galvez' plans to manufacture puros and cigarros by blaming riots in Puebla on the visitor's






40

efforts to establish a tobacco factory there, Cruillas, who had already clashed with Galvez over other matters, supported Espinosa's contention in letters to Arriaga and Esquilache.53 In December, Espinosa ordered the abolition of tobacco manufacture by the Renta in Puebla and a return to private production only. Apparently, he was concerned with threats of serious social turmoil reflected in the appearance of posters with such statements as "Death to the King of Spain," "Death to Spain," and "Long Live the English." There were also threats to burn monopoly offices. In addition, Espinosa ordered suspension of Renta manufacturing in Veracruz, Guadalajara and Jalapa.54 A junta of December 17 considered a petition from the cigarreros of Mexico City. Indicating their fears that a factory would be established in Mexico City, they were assured by Espinosa that they would be heard before any such action were taken.55 The junta also decided to request a report from the Bishop of Puebla on the desireability of manufacturing by the Renta in Puebla.5 Glvez rejected Espinosa's arguments out of hand, declaring that the public disorder in Puebla was caused by opposition to the taking of censuses for raising militia.57

Galvez' return to Mexico City in late January, 1766, weakened opposition from the junta, and he was able to promote his plan to manufacture puros and cigarros on monopoly account. Espinosa continued to oppose the idea, as he had since Galvez purchased the paper in Jalapa, despite the visitor's insistence that it was in conformity with royal instructions.58 Espinosa feared that Galvez' proposal was only the beginning of a longterm effort to abolish all private tobacco shops in the viceroyalty.59 The junta yielded to Galvez' wishes and the agreement was published in the bando of March 17, 1766. Repeating the order of March 17, 1765, it declared that the Renta would manufacture labrados in the factorias. Only







41

professional cigarreros without any other means of livelihood would be permitted to continue producing labrados; all other merchants were strictly prohibited from dealing in tobacco of any kind, except to purchase a prudent number of puros and cigarros to be used in their shops for adeala.60 Manufacturing by the Renta began in some of the factorias after promulgation of the bando, and the monopoly increased efforts to prohibit tobacco dealing by non-cigarreros.61

In 1766 the Crown unwittingly reopened the debate over manufacturing by altering the lines of authority for decision-making about the direction of the monopoly. In a royal order of January 2, 1766, the Crown approved the actions of the junta through July, 1765, including the decision to lease the monopoly. By the time the order was received in New Spain, the junta had already begun to put the monopoly under direct administration. Leasing, in fact, was not restored, and the issue did not disturb the monopoly any further. The January 2 order also advised the viceroy that the head of the Renta in Spain was to be the Marques de Esquilache, minister of War and Hacienda. In New Spain, the monopoly was to be under the jurisdiction of the junta and the director, without interference from any other royal officials or tribunals. The monopoly was to use the same methods and regulations as in Spain, and all necessary revenues were to be drawn from the royal treasury, to be repaid from monopoly funds when possible.62

On February 25, 1766, however, the Crown revised its previous order by reorganizing the junta, removing the viceroy from direct participation and greatly enhancing Galvez' power. The new junta was to be composed of Galvez, two or three audiencia members selected by Galvez, and the two monopoly directors. The viceroy was to assist Gahvez and the directors. Acknowledging the disputes between Galvez and the junta, and arguing that they would pass in time, Esquilache ordered close adherence to the visitor's







42

orders, He appointed Galvez as subdelegado general of the Renta del tobaco in New Spain and endowed him with "personal jurisdiction" over the establishment and administration of the monopoly. The co-directors were urged to cooperate with Galvez, who was accountable only to Esquilache.63

The revised order arrived in Mexico in May, 1766, and according to Priestley, revealed Esquilach's understanding that the junta had been obstructing Galvez' efforts to establish the monopoly.64 It was not, however, the final word from Spain. On May 23, 1766, Arriaga took over the tobacco monopoly in his capacity as minister of the Indies65 and sent a new order of May 26, 1766, to New Spain, cancelling the order of February 25. The new order restored the viceroy to the junta, as superintendente general, and added the fiscal of the audiencia, Juan Antonio Velarde.66 The other members would be the senior judge of the audiencia, Galvez, and the two directors. Arriaga also clarified, changed and added to previous instructions. The viceroy was to appoint all monopoly personnel from junta nominations. The monopoly was to keep separate accounts and to repay all outstanding debts owed to the treasury or to individuals. Although the viceroy was superintendente general, the directors were allowed to report directly to the minister in Spain. They were ordered to submit reports on monopoly conditions, progress and changes and to send a list of all employees and their salaries, indicating if any additional personnel were needed. On Galvez' recommendation, Arriaga awarded special recognition to five persons, including treasurer Echeveste, for making loans to the monopoly. Finally, the junta was ordered to create a second junta composed of two judges of the audiencia and one inquisitor, to appoint persons to hear cases and to act as a court of appeal.67







43

The reason for the inclusion of the fiscal on the junta is unclear, Its effect, in the short run, was to reduce the power of Galvez, although this may have occurred only because the fiscal supported the position of the directors in the key dispute over manufacturing by the monopoly. Velarde's opposition to manufacturing re-opened the debate which appeared settled by the March 17, 1766 bando. Although Galvez minimized the vigorous debate which erupted in late 1766 and most of 1767, his plan for the manufacture of labrados was overturned completely, and was not restored until he gained the backing of new monopoly officials from Sapin and from the new viceroy, Marques de Croix (1766-1771).

Shortly after his arrival in Mexico in August, 1766, Croix adopted, although somewhat tenuously, the directors' views toward manufacturing by the monopoly, He refused to place blame on either Espinosa or Galvez for the confusion surrounding the Renta, explaining that each man saw himself vested with authority and both wished to see the monopoly succeed.68 Only a few days later, however, he did claim that Galvez' orders for manufacturing, which would require consumers to purchase labrados from the monopoly, was the major stumbling-block in an otherwise general acceptance of the new institution. He reported that it had been decided to moderate regulations in Mexico City, and surplus cigarros had been shipped to administrations outside the city. The same displeasure greeted monopoly manufacture and sale in these areas, leaving the Renta in danger of losing these supplies and opening the door to contraband. Croix stated flatly that the idea of manufacturing cigarros would not work, as the reaction of consumers had shown. Without criticizing Galvez' good intentions in any way, the viceroy advised Arriaga that the tobacco monopoly in New Spain could not expect the same success as in Spain, because of the impossibility of guarding against contraband in Mexico's rough terrain. The only







44

guarantee of success, he argued, was to satisfy the growers and the consumers, who together assured the profits of the monopoly.69

Croix's position on manufacturing did not settle the issue. In the juntas of October 16 and December 11, 1766, the matter was brought up once again. On October 16 the junta agreed to submit various materials to the fiscal in view of numerous complaints against the monopoly from such places as Oaxaca, Puebla and Guanajuato.70 In the junta of December 11, Velarde presented his arguments against monopoly manufacturing. Although the Crown had declared that production of labrados was to be part of the tobacco monopoly, he noted, it also wanted the monopoly to be established without inconvenience or harm to the public. If necessary, the Renta should compromise with the cigarreros. Velarde reflected on the misery which would be suffered by the many families who maintained themselves in tobacco work should the monopoly eliminate private manufacturing. This could not be justified, even if revenues greatly increased. Velarde proposed the free manufacture and sale of puros and cigarros, with harsh penalties against those who used or sold non-monopoly tobacco.71

No resolution was taken in the junta because Galvez requested an

opportunity to present his own proposal. In the junta of January 5, 1767, he outlined a plan which he had proposed to the Crown in 1766 and which had been approved in principle.72 The junta passed this to the fiscal, along with new complaints from the.town council (cabildo) and merchants of Durango, the town council of Zacatecas, the alcalde mayor of San Luis de la Paz, and others.73 The petitions indicated a "general repugnance" to the abolition of free manufacture of tobacco in the viceroyalty.74 Writing in 1795 as director of the monopoly, Silvestre Diaz de la Vega suggested that these complaints and "popular movements" in Puebla and and Guanajuato especially influenced Velarde's thinking.75 Arcila Farias,







45

citing a letter of July 26, 1766 from Cruillas to Spain, reports that the viceroy blamed the monopoly for disturbances of July 26, 1766 in Guanajuato. About 30,000 men had occupied the city on July 17, threatening to burn tobacco monopoly outlets and offices and demanding a return to the monopolization of only the sale of rama. Arcila Farias believes that / 76
Cruillas exaggerated the incident to discredit Galvez.

Despite Glvez' proposal, the fiscal remained attached to his position. In the junta of February 14, 1767,77 he agreed that Ga vez' plan would undoubtedly increase revenues but indicated that the Crown did not desire revenues at the expense of a "notable vexation and resentment" by the public, perhaps leading to disturbances or riots. The Crown greatly favored the establishment of the monopoly, and as quickly as possible, but only on a sound foundation of peace and order. Irregardless of the bando of March 17, 1766, the fiscal considered the general clamor in all areas where manufacturing had been established as ample evidence against Galvez' ideas. He again proposed private manufacturing and sale of labrados, with prohibitions against non-cigarreros; merchants would be allowed to sell labrados purchased from the tobacco shops. Also, he proposed that the monopoly continue to manufacture in Veracruz because there had never been cigarreros in that city.78

Except for Galvez, the other members of the junta agreed with Velarde. Espinosa and Frago cited the same reasons as the fiscal, and expressed concern over the degree of resistance from the public.79 Francisco Echavarri argued that the junta could use its discretion on the matter. He opposed manufacture by the monopoly on practical grounds, pointing out that there were about 1,000 tobacco shops and perhaps 4,000 workers, both men and women, who would have to be absorbed by the monopoly in Mexico City alone. Although he recognized that the monopoly could manufacture







46

labrados, either by controlling the industry through Crown-operated factories or by providing tobacco and paper to the workers in their homes and shops, he believed the cost to be prohibitively high.80

Galvez adamantly opposed the views of the other junta members. He argued that the decision to manufacture should stand because it was in accordance with royal instructions. The purpose of the monopoly, he reminded them, was to produce revenues to help pay the defense costs of the colony. Monopoly factories would increase revenues by fifty percent, as verified by the accounts available at the time. By December, 1766, total monopoly income was 1,200,000 pesos; to alter the system would be a serious threat to future progress of the Renta. Referring to the nonexistence of manufacturing in Mexico City and Valladolid, and to orders to halt it in other areas,81 he suggested that the junta was not giving adequate time or effort to determining the true value of monopoly production. He was especially opposed to any changes in Durango, which supplied the Provincias Internas, and in Veracruz, where the public was content with the monopoly, as reported by the factor of Veracruz.82

Galvez also used the opportunity to defend himself against certain charges. First, he denied that the riots in Puebla in 1765 had been caused by the creation of the tobacco factory. As he would do in his 1771 Informe, he insisted that there was good evidence to prove that the disturbances were caused by resistance to the taking of a census for raising militias. Second, he argued that the "movement" in Guanajuato had the same causes, compounded by changes in alcabala duties on certain mining equipment. Attacks against the tobacco monopoly were only "incidents" in the general disturbances. Third, he suggested that complaints in Oaxaca were exaggerated by the secretary of the bishopric, who was selling both tobacco and playing cards illegally under cover of ecclesias-







47

tical immunity.83 The undeniable fact, he concluded, was that tobacco monopoly revenues increased significantly only after the bando of March 17, 1766 eliminated non-professional merchants from the tobacco trade. Apparently as a compromise, he voted to continue suspension of manufacturing by the Renta, except in the factorias of Veracruz and Durango, and demanded confirmation of prohibitions against non-cigarrero merchants.84

The junta of February 14, 1767 voted to return to the private production and sale of puros and cigarros. In this and a subsequent meeting of March 5, only storekeepers were singled out in the prohibition against manufacture and sale, although they would be permitted to purchase labrados for their shops from the tobacco shops or from the monopoly. Veracruz would be excluded from the decision.85 Arrangements were made to sell stocks of monopoly labrados and to sell paper which Galvez had purchased in Jalapa. Echeveste, director of the playing-card monopoly as well as treasurer of the tobacco monopoly, received most of the paper in Mexico
86
City and Galvez was reimbursed.

Orders were sent out to abolish all manufacturing by the monopoly, but the junta agreed to postpone any public announcement until existing stocks could be sold.87 The issue, however, was still not settled. On June 3, 1767 the new administrator general of the Administration General of Mexico, Simon de Huarte,88 wrote to the viceroy expressing serious misgivings about the recent decisions by the junta. Having been informed by the directors that all merchants could manufacture and sell puros and cigarros, he wrote the viceroy declaring that it was a well-known fact that the success of the tobacco monopoly in Spain depended on the absolute restrictions against private trading in tobacco. The March 17, 1766 bando had enacted restrictions in New Spain somewhat along these lines, excepting only professional cigarreros, but the new regulations were even








48

broader, allowing anyone to produce and sell, Huarte believed this would lead to a great deal of fraud because the monopoly could not guard against such widespread freedom. In response to this representation, and after
1 90
consulting Galvez and the new contador of the monopoly, Phelipe del Hierro, Croix issued a decree on June 4, 1767 prohibiting production and sale of tobacco by all merchants except professional cigarreros. In effect, Croix was suspending the junta decisions and returning to the provisions of the bando of March 17, 1766. Croix then advised Spain of his actions. The order which would have been issued once labrado stocks were sold by the monopoly was never sent out.91

The Crown's response to the viceroy's suspension of the junta's

decision was emphatic. In the key order of October 24, 1767, it strongly disapproved of the junta's actions in February and March. "With expres,92
sions of noteable displeasure,92 as Galvez commented, the order accused the junta members and the monopoly directors of favoring personal concerns over the progress of the Renta. The Crown, the order declared, had already expressed its desire to establish the monopoly under direct administration. By working skillfully and with close attention to the satisfaction of consumers, officials would soon accustom the inhabitants to commercial transactions in a monopolized product. With an argument similar to that used by Galvez, the Crown criticized the junta's decisions as totally contradictory to the bando of March 17, 1766, which had been the basis of the favorable results achieved by the monopoly thus far.93

To settle the issue permanently, the Crown ordered a return to the March 17, 1766 bando and spelled out its wishes. Except for the monopoly itself, only professional cigarreros were to be allowed to manufacture puros and cigarros. They could produce labrados and sell them in their shops, or sell them to the Renta and be paid for their work. All other








49

merchants were strictly prohibited from dealing in tobacco, except to purchase a prudent number of puros and cigarros for adeala in their shops. In addition, the directors were to issue no new licenses for tobacco shops because "little by little" the private shops were to be abolished and replaced by monopoly outlets. To avoid fraud, tobacco shops would be inspected and all purchases of rama would be carefully accounted for in formal registers. The wishes of consumers were to be considered at all times by assuring an adequate supply of labrados or rama. The order also changed the powers of the junta. In the future, the junta would have jurisdiction in only monopoly litigation. Because the Crown regarded the junta as the cause of delays in tobacco monopoly resolutions, it was excluded from any authority in economic or administrative decisions. Finally, to make clear its absolute opposition to leasing the monopoly, the Crown warned that Espinosa would be removed if he continued to push the idea. In fact, Croix was authorized to relieve Espinosa if he thought it necessary.94

Croix published the order on February 12, 1768. For a third time, it was declared that only the Renta and professional cigarreros would be 95
allowed to produce and sell puros and cigarros in New Spain. The royal order of October 24, 1767 proved to be a definitive statement on the leasing of the monopoly. Although it did not resolve the issue of manufacturing, as will be seen in subsequent chapters, the order did overturn efforts to prohibit manufacturing by the monopoly and cleared the way for the abolitions of the tobacco shops and the establishment of monopoly factories.

It is difficult to account entirely for the pendulum-like swings in decision-making during the first three or four years of the monopoly's existence. Espinosa's preference for leasing, despite royal orders and current practice in Spain, appears to have been influenced by lack of







50

access to funds. Exactly why he was unable to obtain loans in the same manner as Galvez is not clear. Viceroy Cruillas was influenced in his behavior by animosity toward Galvez in dealings unrelated to the tobacco monopoly. In addition, he may have felt that Espinosa deserved his support because of the director's experience in the tobacco monopoly in Spain. Both individuals were concerned about threats to social stability revealed in petitions against the monopoly and in the disturbances in Puebla, Guanajuato and Oaxaca.

Ga/lvez' role, despite the royal order of April 22, 1765, was somewhat ambiguous. The force of his personality and his powers as visitor general assured that his presence would be extremely important, if not decisive. Yet his point of view, always closely attuned to the royal Instruccion of 1764, met with unguarded hostility. Similarly, the actual powers of the junta were not clearly defined. It is not surprising, for example, that Francisco Echavarri could argue in 1767 that the organization of the monopoly was at the disCretion of the junta, since the 1764 instruction did provide for alternative approaches to establishment of the Renta. Changes in the organization of the junta, and the addition of the fiscal in 1766, had no long-lasting effects. When the Crown was forced to determine exactly what it wanted in the colony, it simply reduced the junta's powers and returned to its original 1764 orders.

Faced with the resistance of most of its major officers to the junta's decisions of early 1767, the Crown took decisive action. Since these individuals generally supported the Instruccion of 1764, it is not surprising that the Crown supported their position. Galvez was vindicated because his ideas were representative of the eighteenth-century trend toward direct royal administration of revenues and greater involvement by royal officials in certain areas of economic life. The positions he had adopted,







51

were consistent with the broad aims of Crown policy and with the specific aims of the 1764 Instruccion. Moreover, as Galvez commented in 1767, the results of the monopoly under the conditions of the March 17, 1766 bando had not been unimpressive. By the end of 1766 the monopoly showed a profit of 239,098 pesos.96 Most debts had either been paid, including the 120,000 pesos borrowed from the treasury and part of the 588,747 pesos provided by Galvez, or were covered by funds on hand.97 Income in 1767 increased 98
over 1765-1766, yielding a profit of 416,201 pesos.

On March 15, 1768 the Ordinances of the royal tobacco monopoly in New Spain were published in Mexico City.99 Together with the viceregal order of February 12, 1768, they defined the basic organization of the monopoly. It must be noted, however, that many aspects of the monopoly remained to be settled, such as administrative organization, pay scales, establishment of factories and abolition of the tobacco shops. In the growing regions, the monopoly had determined its fundamental approach to the contracting system by 1768, but a major dispute over the growing of tobacco for the Renta would soon produce the first crisis in the monopoly.



NOTES

1. Arcila Farias, Reformas economics, vol. 2, 114. Galvez, Informe, p. 19, noted that the first proposal for a tobacco monopoly came from Viceroy Juan de Palafox in 1642 when he suggested to his successor, Conde de Salvatierra, the creation of a monopoly to raise revenues for the armada de barlovento, a special naval force.

2. Julian de Arriaga to Marques de Cruillas, July 23, 1761, AGN, Renta, vol. 47, fols. 154-154v.

3. Fonseca and Urrutia, vol. 2, 354; Gilvez, Informe, p. 20. Arcila Farias, Reformas economicas, vol. 2, 114 notes that the alcalde del crimen of the audiencia, Sebastian Calvo, sent a plan to Spain in 1762 for establishment of a monopoly in New Spain, and actually went to Spain to discuss it.







52

4. Archer, Army in Bourbon Mexico, pp. 3-4, 10.

5. The Real Instruccion expressed these points explicitly, stating:

"Los excesivos gastos que se han aumentado en ese Reyno,
con motivo de la Tropa, y Milicias, que se han de establecer, para su conservacidn, y defenza, y los que al mismo tiempo es preciso hacer en otras Yslas, Plazas y mis Dominios, a fin de
ponerlos a cubierto de toda imbasion enemiga, y que mis Vasallos
logren del reposo, y seguridad que les deseo en sus Labrazas,
tratos y comercios: me han obligado a premeditar algunos medios
en que sin gravamen del vasallo, contribuyen a soportar los
gastos acrecentados. Y teniendo presente que no ay Principe
que no tenga en sus Dominios estancado el tabaco por ser fruto no necesario a la vida humana, y que pendiendo el tomarlo del
arvitrio de cada uno, sufraga su consumo para atender a las urgencias de la Corona, sin gravamen del Vasallo en general,
ni del Comercio, por no ser parte principal de el, sino es un
pequeno ramo, que distribuido entre muchos, no se hace sencible
su falta. "

Real Instruccion, August 13, 1764, AGN, Renta, vol. 47, fol. 155. See also Royal Order, August 13, 1764, AGN, Renta, vol. 47, fols. 164v-165.

6, Royal order, August 13, 1764, AGN, Renta, vol. 47, fols. 164v-166.

7. Hereafter referred to as the junta, without underlining.

8. A libra was equal to 0.46025 kilograms, or 16 onzas. Manuel
Carrera Stampa, "El sistema de pesos y medidas colonial," Memorias de la Academia Mexicana de Historia, vol. 26 (1967), 16.

9. Real Instruccion, August 13, 1764, AGN, Renta, vol. 47, fols. 155-159.

10. The three reformers, Espinosa, Armona and Villalba all came
to New Spain on the same voyage in November, 1764. Armona, however, died on the voyage. Priestley, pp. 135-136; Archer, Army in Bourbon Mexico, p. 10; Galvez, Informe, p. 20.

11. Bando, Cruillas, December 14, 1764, AGN, Bandos, vol. 5, fol. 99.

12. Francisco Fuertes, appointed secretary of the junta on December 15, 1764, was put in charge of tobacco collections. He was also secretary of the viceroyalty. Fonseca and Urrutia, vol. 2, 355.

13. Fonseca and Urrutia, vol. 2, 356; Glvez, Informe, p. 23.

14. Phelipe del Hierro, April 27, 1771, AGN, Ramo de Tabaco (hereafter cited as Ramo), vol. 463, fols. 40-40v.







53

15. Bando, Cruillas, March 17, 1765, AGN, Bandos, vol, 6, fol. 9,
The bando used the term "pureros y cigarreros de profession" and the common expression "por ahora," an indefinite "for nowl" or "temporarily,"

16. Bando, Cruillas, March 17, 1765, AGN, Bandos, vol. 6, fol. 9.
The merchants were referred to as "tratantes, mercaderes y comerciantes," terms apparently intended to cover all types of merchants who might be dealing in tobacco.

17. Bando, Cruillas, March 17, 1765, AGN, Bandos, vol. 6, fol. 9.
The modern spelling of "adeala" is "adahala." The bando refers to "adeala, pilon o galita" used by the storekeepers to promote sales. Customers apparently received puros and cigarros if they purchased a certain value of goods, or perhaps as change.

18. Galvez, Informe, p. 23.

19. Fonseca and Urrutia, vol. 2, 356; Galvez, Informe, p. 24.

20. Galvez, Informe, pp, 26-27, and Priestley, p. 146 state that contractors were promised a profit of 150 percent.

21. Bando, Cruillas, June 16, 1765, AGN, Bandos, vol. 6, fol. 15.

22. Cruillas to Marques de Esquilache and Arriaga, July 30, 1765, AGN, Correspondencia de Virreyes (hereafter cited as CV), vol. 10, fols. 236-237.

23. Fonseca and Urrutia, vol. 2, 357.

24. Gailvez, Informe, p. 26.

25. Ibid.

26. Ibid.; Priestley, pp. 146-147; Fonseca and Urrutia, vol. 2, 357.

27, Quoted in Galvez, Informe, p. 26.

28. Gailvez, Informe, p. 26.

29. Fonseca and Urrutia, vol, 2, 357,

30. Galvez, Informe, p. 27.

31, Ibid.

32. Ibid.

33. Ibid.







54

34. Ibid,, pp, 27-28. Fonseca and Urrutia, vol. 2, 359, state
that Galvez received the 200,000 pesos from the treasury of New Spain, to be repaid from monopoly revenues when possible, Galvez indicates that 100,000 pesos were from the treasury but is unclear about the second 100,000. Priestley, pp. 146-147, notes only 100,000 pesos available at the time, borrowed from the Consulado of Cadiz, but with a promise of unlimited funds. Ga'lvez, Informe, pp. 32-33, states that Spanish commerce he refers to the "Flotistas" promised the one million or more pesos. Available accounts do not include anything about this 200,000 pesos. They show only the 120,000 pesos borrowed by Cruillas and 588,747 pesos which Galvez obtained in October. See Phelipe del Hierro, April 23, 1768, Estado del total consumo de tabacos, su valor entero, salarios, gastos y liquido haver que ha producido la Renta del Tabaco desde su establecimiento hasta fin de Diciembre del ano pasado de 1766. Biblioteca Nacional de Mexico (hereafter cited as BN), Tabacos, v. Nueva Espana, Real Hacienda, 1785, vol. 1, ms. 19 (1332), fols. llv-12.

35. Bando, Cruillas, September 10, 1765, AGN, Bandos, vol. 6, fol. 18.

36. The dates for the creation of the four factorias were as follows: Orizaba, June 1, 1765; Teusitln, June 26, 1765; Cordoba, July 1, 1765; and Jalapa, September 4, 1765. Silvestre Diaz de la Vega to Marques de Branciforte, August 23, 1797, AGN, Ramo, vol. 44.

37. Bando, Cruillas, September 10, 1765, AGN, Bandos, vol. 6, fol. 18; Ga/lvez, Informe, p. 28. Fonseca and Urrutia, vol. 2, 358, state that this order also included a provision against use of the ecclesiastical fuero (exemption) as a shield for breaking tobacco monopoly laws.

38. Hierro, April 27, 1771, AGN, Ramo, vol. 463, fols. 41-41v.

39, Bando, Cruillas, September 14, 1765, AGN, Bandos, vol. 6, fol. 20. Fonseca and Urrutia, vol. 2, 359, note that the September 14 order also arranged for provisional appointments of fieles, monopoly officials subordinate to the factores (factors) of the factorias. The bando does not actually refer to these persons as fiels but mentions appointments of individuals to receive, pay for and sell tobacco on tobacco monopoly account.

40. Fonseca and Urrutia, vol. 2, 355; Cruillas to Esquilache, August 22, 1765, AGN, CV, vol. 9, fol. 825.

41. Galvez, Informe, p. 27.

42. Ibid., pp. 27, 29.

43. Priestley, p. 147.

44. Galvez, Informe, p. 29.

45. Ibid., pp. 27, 31.

46. Fonseca and Urrutia, vol. 2, 359.







55

47. For a description of the acordada and its operations, see
Colin M. MacLachlan, Criminal Justice in Eighteenth Century Mexico: A Study of the Tribunal of the Acordada (Berkeley, 1974).

48. Galvez, Informe, p. 33.

49. Bando, Cruillas, November 12, 1765, AGN, Bandos, vol. 6, fol. 23.

50. Quoted in Priestley, p. 148.

51. Priestley, p. 149, states that they were deputies of the Consulado, or merchants' guild, of Cadiz.

52. Galvez, Informe, pp. 31-32. Galvez, Informe, p. 33, states that he paid for tobacco with drafts issued by agents of the Cinco Gremios Mayores de Madrid,

53. Cruillas to Arriaga, March 14, 1766, AGN, CV, vol. 10, fol.
317; Cruillas to Arriaga and Esquilache, April 23, 1766, AGN, CV, vol. 9, fol. 921. For an analysis of Gilvez' relationship with Cruillas, see Priestley, pp. 135-171 and Calder'n Quijano, Carlos III, vol. 1, 143-150. For Glvez' general opposition to the role and powers of the viceroys and his promotion of the intendant system, see Brading, Miners and Merchants, pp. 44-51.

54. Sebastian Diaz de la Vega to Marque's de Branciforte, July 10, 1795, AGN, Ramo, vol. 495, fols. 58-59v. Vega, who was director of the monopoly in 1795, issued this report as background to the manufacture of labrados by the monopoly.

55. Vega to Branciforte, July 10, 1795, AGN, Ramo, vol. 495, fol. 59v.

56. Vega to Branciforte, July 10, 1795, AGN, Ramo, vol. 495, fol. 59v,

57. Galvez, Informe, p. 34.

58. Ibid., pp. 34-35.

59. Ibid., p. 33.

60. Bando, Cruillas, March 17, 1766, AGN, Bandos, vol. 6, fol. 30.

61. Galvez, Informe, p. 35.

62. Royal order, January 2, 1766, AGN, Renta, vol. 47, fols. 229-230.

63. Royal order, February 25, 1766, AGN, Renta, vol. 47, fols. 209-210.

64. Priestley, p. 150.







56

65. Note added to copy of royal order of January 2, 1766, AGN, Renta, vol. 47, fol, 230,

66. Royal order, May 26, 1766, AGN, Renta, vol, 47, fols. 212-212v. Also quoted in Fonseca and Urrutia, vol. 2, 361-363. Before this royal order was received in New Spain, Cruillas had written to Arriaga complaining that the February 25 order changing the junta was a public rebuff of his authority since he was president of the junta and juez conservador of the Renta. He pointed out that his moderation was the reason for acceptance of the monopoly in the colony. Cruillas to Arriaga, June 19, 1766, AGN, CV, vol, 9, fol. 950.

67. Royal order, May 26, 1766, AGN, Renta, vol. 47, fols. 212-212v.

68, Marques de Croix to Arriaga, September 22, 1766, AGN, CV, vol. 11, fols, 63-64.

69. Croix to Arriaga, September 26, 1766, AGN, CV, vol. 11, fols. 65-67.

70. Vega to Branciforte, July 10, 1795, AGN, Ramo, vol. 495, fol. 63.

71. Vega to Branciforte, July 10, 1795, AGN, Ramo, vol. 495, fols. 62v-65.

72. Vega to Branciforte, July 10, 1795, AGN, Ramo, vol. 495, fols. 65-66. Vega did not elaborate on the plan.

73. Vega to Branciforte, July 10, 1795, AGN, Ramo, vol. 495, fols. 65-66.

74. Vega to Branciforte, July 10, 1795, AGN, Ramo, vol. 495, fols. 65-66.

75. Vega to Branciforte, July 10, 1795, AGN, Ramo, vol. 495, fol. 66.

76. Arcila Farias, Reformas economicas, vol. 2, 121.

77, His report was probably dated February 5, 1767. In a letter
from Croix to Arriaga, March 29, 1767, AGN, CV, vol. 11, fol. 276, Croix mentions the fiscal's statement of February 5.

78. Vega to Branciforte, July 10, 1795, AGN, Ramo, vol. 495, fols. 66v-68v.

79. Vega to Branciforte, July 10, 1795, AGN, Ramo, vol. 495, fols. 68v-69v.

80. Vega to Branciforte, July 10, 1795, AGN, Ramo, vol. 495, fols. 69v-72v.

81. I did not encounter this order.








57

82, Vega to Branciforte, July 10, 1795, AGN, Ramo, vol. 495, fols. 74-76v,

83. Vega to Branciforte, July 10, 1795, AGN, Ramo, vol. 495, fols. 76v-77v.

84. Vega to Branciforte, July 10, 1795, AGN, Ramo, vol. 495, fols. 78-78v.

85. Croix to Espinosa and Frago, March 11, 1767, AGN, Renta, vol. 47, fols. 236-237v enclosing copy of decisions of February 14, 1767 junta.

86. Croix to Espinosa and Frago, March 11, 1767, AGN, Renta, vol. 47, fols. 237-240v enclosing copy of decisions of March 5, 1767 junta.

87. Vega to Branciforte, July 10, 1795, AGN, Ramo, vol. 495, fol. 80.

88. Huarte was appointed in Spain and took office in Mexico City by the viceregal decree of September 13, 1766. Fonseca and Urrutia, vol. 2, 361, Huarte headed the Administration General of Mexico (see Figure 1, Chapter One),

89. Vega to Branciforte, July 10, 1795, AGN, Ramo, vol. 495, fols. 81-81v.

90. Hierro was appointed in Spain and took office in Mexico City by the viceregal decree of September 13, 1766. The oficial mayor of the contaduria, Jose de la Riva, and the oficial segundo, Jose Martin Florencia, also took office on September 13. Fonseca and Urrutia, vol. 2, 361.

91. Vega to Branciforte, July 10, 1795, AGN, Ramo, vol. 495, fols. 82-82v. Galvez, Informe, p. 36, states that Croix advised Spain of his actions on May 24 and July 7, 1767. He does not mention the June 4 decree or the June 3 letter to Croix from Huarte, but notes that Croix made the decision to suspend the junta's new regulations after consulting with him and with Huarte and Hierro.

92. Gilvez, Informe, p. 36.

93. Vega to Branciforte, July 10, 1795, AGN, Ramo, vol. 495, fols. 82v-85.

94. Vega to Branciforte, July 10, 1795, AGN, Ramo, vol. 495, fols. 82v-85; Galvez, Informe, pp. 36-37; Fonseca and Urrutia, vol. 2, 365-366.

95. Bando, Croix, February 12, 1768, AGN, Bandos, vol. 7, fol. 3.







58

96. Phelipe del Hierro, November 5, 1771, Estado del valor entero, salarios, gastos y liquido que ha rendido la Renta del Tabaco desde su establecimiento hasta fin de Diciembre de 1770, .. in G lvez, Informe, Appendix 5; Hierro, April 23, 1768, Estado 1766, BN, Tabacos. v. Nueva Espa a, Real Hacienda, 1785, vol. 1, ms. 19 (1332), fols. 11-12v, shows a profit of 228,362 pesos. The 1771 figure is undoubtedly a revision.

97. Hierro, April 23, 1768, Estado 1766, BN, Tabacos, v. Nueva Espana, Real Hacienda, 1785, vol. 1, ms. 19 (1332), fols. 11-12v.

98. Hierro, November 5, 1771, Estado 1770, in Galvez, Informe, Appendix 5.

99. March 15, 1768, Ordenanzas de la Real Renta del Tabaco, AGN, Renta, vol. 47, fols. 265-309; also published in Fonseca and Urrutia, vol. 2, 439-486.









CHAPTER THREE
THE GROWING SECTOR; LAS VILLAS



The divergence of opinion about manufacturing by the tobacco monopoly should not obscure the fact that the Renta was initially organized to generate its income only from the purchase and resale of rama, or leaf tobacco. Furthermore, although the Crown's 1767 order to manufacture puros and cigarros eliminated the need to produce profits strictly from rama sales, assuring a regular and adequate supply of the leaf continued to be a principal responsibility of monopoly officials throughout the history of the monopoly.

The device chosen for organizing the growing sector was the tobacco contract, an arrangement with planters to supply specified quantities of rama at negotiated prices. By employing contracts, the monopoly rejected direct participation in favor of regulating the planters who were already producing tobacco in the colony. Insofar as possible, the contracts were designed to control quality, quantity, prices and planting locations. To assure a regular profit, the monopoly sold rama to consumers at a price well above the monopoly's costs for purchasing, transporting, storing and selling tobacco. No person or group was permitted to purchase rama outside the monopoly. Organizing the growing sector required that officials deal with three distinct but related problems: how, where and how much to produce. These issues did not arise together, nor were they settled together; but as they were resolved, the mature form of the growing sector emerged. This chapter assesses the development of the growing sector in terms of these three issues. It examines, first, the historical evolution of the tobacco contracts; second, the determination of planting areas; and third, the unsettling effects of an impending tobacco shortage in 1771.
59







60

Immediately following the establishment of the monopoly in 1764, Viceroy Marques de Cruillas ordered the growers of Cordoba and Orizaba to elect deputies to be sent to Mexico City to negotiate tobacco contracts. Each of the two areas sent two deputies, Lieutenant Miguel de Leiba Esparragoz and Captain Felix de Gandara from Cordoba, and regidores Juan Antonio de Cora and Manuel de Montes Arguelles from Orizaba. All four men were growers. Terms for the initial contract were agreed upon without serious resistance from the deputies, and the first contract was approved by the viceroy on February 21, 1765.1

The terms of the agreement established the basic guidelines for all future contracts. As much as possible, the Renta accepted the traditional growing and pricing systems, but made efforts to simplify and standardize procedures. The twenty-one classes of leaf tobacco currently available were reduced to three, called supremo, mediano and infimo or, alternatively, primera, segunda and tercera. A fourth class, usually called punta, was made up of the wastPand small pieces collected during the processing of the leaves.2

The price paid by the monopoly was determined by the class of leaf. Prices were set at 3 1/4 reales per libra of primera, 2 1/2 reales for segunda and 1 real for tercera. Punta was purchased by the arroba,3 at 3 pesos (24 reales) per arroba. Other terms of the contract dealt with weighing, weight losses and delivery. Tobacco was bundled and shipped in the form of tercios, each tercio being made up of 80 or 100 smaller bundles of tobacco leaves known as manojos. Tercios, in turn, were bundles using mats and cords of palm or other materials. To account for the weight of these bundling materials, the monopoly determined the weight of each tercio by subtracting thirty libras for the mats and cords. In addition, the monopoly subtracted two libras from the tercio gross weight







61

for error in weighing5 and deducted ten percent of gross weight for weight loss from drying or other causes.6 The tobacco monopoly used this procedure to determine a net weight for each tercio and then paid the established price per libra according to class.7

The contract included anumber of other arrangements. All tobacco was to be delivered within thirty days of being formed into tercios. Special marks were to be placed on each manojo, to indicate class. Upon delivery, formal inspections were to be conducted by the deputies, Renta officials and the local alcalde mayor or corregidor. The monopoly agreed to pay half the value of the tobacco in cash at the time of delivery and the balance four months later. To regulate the quantity of tobacco grown, the deputies and monopoly officials were to prepare a register of all planters and to assign the number of plants (matas) each could plant each year. The duration of the contract was to be three years.8

The Instruccion of 1764 ordered that Teusitlan be included with Cordoba and Orizaba as part of the growing area. The junta permitted Teusitlan to sign a contract on the same terms as Cordoba and Orizaba, but with certain adjustments. Because Teusitlan tobacco was considered to be of inferior quality, it set prices below those of Cordoba and Orizaba, at 2 1/2 reales, 1 1/4 reales, 3/4 real and 20 reales for primera, segunda, tercera and punta, respectively. In addition, it raised the deductions for weight loss from ten to thirteen percent.9 Finally, in the event of a surplus, Teusitlan was to reduce planting by one-half to one-third.10

Despite the royal order limiting planting to Cordoba, Orizaba and 11
Teusitlan, the junta decided to add Jalapa to the growing area. It was probably prompted by Viceroy Cruillas' support for petitions from the alcalde mayor of Jalapa, Antonio Primo de Rivera, and from the local merchants. Tobacco, they informed the viceroy, had been grown in Jalapa







62

"from time immemorial" and was its only significant agricultural product. Jalapa was well-situated for transport of tobacco to Mexico City and had personnel and buildings available for the use of the monopoly. Cruillas supported the petitions, arguing that the exclusion of Jalapa was unjust. He suggested that the Teusitlan factoria be transferred to Jalapa or that Jalapa be granted a factoria on the same terms and with the same contract
12
as Teusitlan. Jalapa was added to the growing region under the same 13
terms as Teusitlan, although no contract was actually signed. The creation of the factoria of Jalapa on September 4, 1765 brought to four the total number in the planting area.14

The ease with which the first contract was signed temporarily obscured an underlying conflict between the monopoly and the planters. As Fonseca and Urrutia were later to admit, this conflict was built into the contract negotiations because the Renta sought the lowest possible prices and the planters the highest.15 Curiously, however, this difficulty did not emerge at first, either because the planters were not certain of their needs or because they were content with the essential guidelines and prices. Certain monopoly officials had no doubts about the terms of the contract. While contracts were still under discussion, Sebastian Calvo, Espinosa's opponent in the matter of leasing, argued that proposed prices were too high. Although he was outvoted in the junta's final decision, his point of view gained the support of Galvez when the visitor arrived later in 1765. In the important September juntas, Galvez proclaimed the contract prices to be absurdly high, and that those in the Cordoba and Orizaba contracts were the highest paid for tobacco anywhere in the world. Prices in the Teusitlan contract, he suggested, were more reasonable.16

Unable to change the terms of the 1765 contract, Galvez simply ignored them. He was commissioned to go to the growing areas in October to survey






63

the situation and to make payments for tobacco already collected or recently harvested. Using drafts provided by agents of the Gremios Mayores de Madrid who were present at the Jalapa fair, Galvez paid out 588,747 pesos for the tobacco. He noted, however, that the sum paid for the harvest, over 400,000 pesos, was actually 22,474 pesos less than the price agreed to in the contracts.17 The planters protested this action and, although they gained the support of the fiscal, Velarde, and of the junta, Galvez was able to convince Viceroy Croix to accept his position. Croix ordered the planters to maintain "perpetual silence" on the matter.18

Galvez' commission also authorized him to name a person to supervise

planting all year long and to negotiate contracts on behalf of the monopoly. To carry out these duties, he appointed a personal friend, Francisco del Real. Galvez regarded Real's appointment as an important step in the development of the monopoly, describing him as not only "loyal" and "incorruptible" but also as "the principal axis" of the monopoly.19 Real was awarded the title of Reconocedor General de Tabacos, or Inspector General of the Tobacco Monopoly. His duties are best understood by referring to his own assessment of his job as he reported it to Galvez in 1771. The report also serves as a general outline of growing procedures.

In early May of each year, Real ordered the planters to prepare their land for seeding. From August through September the plants would be transplanted in accordance with the register of all planters which assigned the number of matas each could plant. The registers were prepared in late June, and assignments were based on the capacity of each planter in relation to the number of tercios the directors wished to harvest. Real noted the importance of this procedure because the Renta had to coordinate planting to assure an adequate supply of tobacco for the consumers.







64

In December, Real began a general survey of all tobacco fields to inspect plants and detect any abuses or problems. From this inspection he prepared a preliminary report on the size and quality of the harvest. Since the inspection took about sixty days, changes in weather or the appearance of pests could cause drastic alterations in any estimate. Harvesting began in mid-February and the planters were required to report their yields. The tobacco leaves were sent to the towns where they were subjected to a process known as the beneficio, essentially a curing and drying process, in one of the 200 houses in the growing regions. Real was responsible for inspecting every building. The planters were again required to report to Real the amount and class of tobacco processed. After being packed into tercios, all tobacco was to be delivered to the monopoly within sixty days.20 The monopoly usually began to receive tobacco from mid-to-late June and Real was responsible for registering all deliveries. This was an extremely laborious procedure, he noted, because of possible fraud in forming the manojos and tercios. He also commented that it was unhealthy, causing his lieutenant to resign after two years of service.21

The appointment of Real completed the formalization of contract procedures but did not assure tranquility in contract negotiations. Serious conflict, however, did not surface until 1767, when the two sides began to meet to discuss the next contract.22 On May 8, the deputies from Cordoba and Orizaba petitioned for changes in the terms of the 1765 contract. Referring obliquely to Galvez' opposition to contract prices, the deputies declared bluntly that the 1765 prices did not permit them to earn a decent profit. Prices, they argued, had been set without adequate consideration of the effects of the ten percent deduction and the actual weight of mats and cords and without assessment of the new costs of registration and







65

delivery of tobacco to the monopoly. The deputies traced the economic results of the harvests of 1765, 1766 and 1767 to illustrate losses suffered because of disease, insects, a 1766 hurricane and 1767 hail. Poor returns, they suggested, discouraged serious application to production.

The deputies offered a number of proposals to improve the next contract, They wished to raise the price of primera by 1/4 real per libra and the price of punta by 4 reales per arroba. They suggested a decrease in the deduction of ten percent for weight losses and in the deduction for the weight of mats and cords. Other proposals focused on changes in procedures from planting to delivery.23 The petition caught the monopoly officials off guard. In their response to the deputies, directors Espinosa and Frago revealed that they possessed an incomplete understanding of costs and profits in the growing process. Indicating that prices had been established more or less according to custom, they informed the viceroy that they had no detailed study of tobacco growing or of the contracts and hence had no clear rules to follow.24 They referred to "opinions" that the growers earned "more than moderate profits" and suggested that the planters improve their proposals with a more exact indication of their costs, using 100,000 matas planted as the base. Meanwhile the directors had ordered Real and the factoria officials in Cordoba and Orizaba to report on the matter.25 Croix passed these materials to the fiscal, Velarde, for an opinion. Velarde recommended a detailed accounting of the economics of growing and suggested a method which monopoly officials could follow.26

The result of these actions was to translate the contract negotiations into a paper war, each side attempting to prove itself a victim. In a very detailed analysis of the costs of planting 100,000 matas of tobacco, the deputies claimed a profit of only 168 pesos. This sum, they indicated,







66

was completely inadequate and provided no cushion against a bad year.27 The directors, initially without documentation, adopted a hard line toward the planters' complaints. In June they suggested an increase in the deduction for mats and cords from thirty to thirty-five libras per tercio, despite reports from the factors of Orizaba and Cordoba placing 28
the actual weight at twenty-eight to thirty and one-half libras. In July, the junta supported the directors' point of view. A report made up of several proposals for the terms of the new contract rejected the deputies' arguments and stated that the planters had earned "higher than normal" profits because the 1765 contract prices were excessive. The junta recommended lower prices for primera, segunda and punta, a deduction of thirty-five libras for the weight of mats and cords and a higher percentage deduction fifteen percent rather than ten percent for weight losses. They also suggested tobacco be delivered sixty days, rather than thirty, after being formed into tercios, and added a few provisions concerning inspections and prevention of fraud. To the planters' advantage, they proposed lowering the deduction for punta from thirty to twenty-two libras and improving the payment of advances to cover planting costs.29

The junta's report was supplemented a few days later by a detailed attack by the directors against the deputies' accounting of the costs of growing 100,000 matas. Rejecting the figure of 168 pesos profit on 100,000 matas, the directors argued that the figure was actually 585 pesos, or sixty percent profit. More important than the numbers, however, was a revealing opinion of Espinosa and Frago on the priorities of the tobacco monopoly. The first concern of the Renta, they indicated, was to increase the income of the royal treasury. A second was to assure an adequate supply of good quality tobacco at fair prices to consumers. Third, the






67

monopoly intended to protect the well-being of the planters and other workers in the tobacco industry. Under the current conditions of the contract, they concluded, these priorities were being served.30

The deputies presented an extremely detailed rejection of the monopoly's position. Although admitting that current contract conditions permitted a moderate profit, they accused the directors and the junta of wishing to worsen contract terms. They defended the accuracy of their calculations on the cost of growing tobacco and accused the directors of being misinformed. They complained of inadequate advances and delayed payments, excessive concern for perfect bundling of the three classes of tobacco and lack of participation in preparation of the yearly register. The legitimate weight of mats and cords was about twenty-eight libras, they argued, not thirty and much less, not the thirty-five the Renta was proposing. Requiring sixty days rather than thirty for delivery of tobacco after bundling the tercios, they pointed out, not only delayed payments but also caused the tobacco to lose weight from extra drying.31

The debate revealed a significant difference of opinion about the

effects of the first contract. Unfortunately, there is no evidence as to the attitude or role of Real as Reconocedor in the negotiations. The decisive action on the issue came from Viceroy Croix, when on September 1, 1767 he ordered the directors to settle the contract. Expressing impatience with Espinosa and Frago for setting prices too low, Croix commissioned contador Mathias de Armona to prepare a list of prices for tobacco covering the five years before the establishment of the monopoly. He then suggested prices higher than these. The planters of Orizaba agreed to Croix's offer but those from Cordoba delayed. When the viceroy asked the Cordoba deputies if they preferred the prices recommended by Sebastian Calvo several years earlier, Cordoba agreed to settle.32







68

On September 15, the deputies and the directors reported agreement33 34
on a new contract which was to run for two years. The terms revealed that the planters had lost ground from the 1765 settlement. Prices were lowered from 3 1/4 reales to 3 reales per libra of primera and from 2 1/2 to 2 reales of segunda, while they remained at 1 real for tercera. The price of punta declined from 24 reales per arroba to 20 reales and the planters were required to deliver tobacco sixty days after bundling the tercios rather than thirty. Deductions for weight losses remained at ten percent and for mats and cords at thirty libras per tercio. The only "victories" for the planters were the reduction of the deduction for mats and cords for punta from thirty to twenty-two libras per tercio and a 35
promise of more prompt payment for tobacco deliveries. The contract was reported to Croix on September 26 as a "compromise."36 Contracts for Teusitlan and Jalapa were settled in October.37

Negotiations for the third and fourth contracts were free of disputes, Contract number three, a one-year extension of the 1767 agreement, was signed in 1769.38 In 1770 the fourth contract was signed, a four-year settlement which raised the price of tercera from 1 to 1 1/8 reales per libra and the price of punta from 20 to 25 reales per arroba. It also added a class called punta fina, at 2 reales per libra.39

Conflict in negotiations, however, again surfaced in 1773. Although Viceroy Bucareli finally accepted contract number five on the same conditions as number four, he refused to set a terminal date and indicated he would decide when the contract should expire.40 In 1777 Bucareli issued an order abolishing the gremio or comun de cosecheros, thereby eliminating the election of deputies to negotiate contracts on behalf of the planters, a system which had been employed since 1765. The viceroy informed the planters that the current contract would expire with the 1778 harvest and







69

future contracts would be arranged on an individual basis, The planters, supported by their town councils (ayuntamientos), resisted this change, and 41
expressed considerable hostility against Reconocedor Real. They petitioned for the reestablishment of the deputies and continuation of the previous contract. The monopoly, however, rejected all petitions, informed the growers that tobacco supplies were excessive and threatened to import tobacco from Louisiana. To back up its position, the Renta began planting in Cordoba on its own account.42 A two-year contract was signed in which the monopoly assigned two different sets of prices to individual planters. Both sets reduced the prices of the previous contract. Primera was reduced from 3 reales per libra to 2 5/8 or 2 4/8; segunda from 2 reales to 1 3/4 or 1 5/8; tercera from 1 1/8 to 1 real for all planters; and punta from 22 reales per arroba to 20 reales.43

Negotiations for the seventh contract, in 1780, witnessed the development of serious conflict. In March, 1780, the new Viceroy Martin de Mayorga (1779-1783) ordered Real to arrange individual two-year contracts. At the same time, he directed Real to assign tobacco plantings on monopoly account for only one more year, to lower costs and to assure careful accounting to enable determination of the value of growing to the monopoly. Because of delays, however, the viceroy was forced to increase monopoly planting in May and to have Real assign to the ayuntamientos immediately the number of matas the growers were to plant. According to Fonseca and Urrutia, "various incidents"44 led to the separation of Real from the negotiations and his responsibilities were assumed by his lieutenant, Antonio Sobrevilla. Mayorga, however, decided to send the secretary of the viceroyalty, Pedro Antonio de Cossio, to negotiate the contract. Cossfo was successful in arranging a one-year settlement which raised the prices of primera, segunda and punta.45







70

A royal order of October 17, 1781 approved the 1780 contract and

ordered discontinuation of tobacco planting on monopoly account because it was not profitable.46 More importantly, the Crown ordered the immediate reinstatement of Real, with the full powers of his position. Before the royal order was received in New Spain, however, the viceroy had sent Phelipe del Hierro, now director of the monopoly, to the growing areas to negotiate the eighth contract. Hierro objected to his commission, pointing out to Mayorga that he was the person most resistant to the planters' demands and therfore least likely to achieve a settlement. Mayorga accepted Hierro's position and again appointed Cossio to 47
go to the growing areas to negotiate the contract. Contract number eight, a five-year settlement, was signed on June 20, 1781. Prices were raised to 3 reales per libra, 2 reales and 1 real for primera, segunda and tercera, respectively, and to 22 reales per arroba for punta. A royal order of March 1, 1782 rejected the five-year term of the contract, stating that it would be left to the discretion of the Crown. The order also overturned one of the articles of the contract, a provision which would have excluded Real from tobacco inspections. The article was declared offensive to royal authority.49 According to Calderon Quijano, this article resulted from the influence of Cossto on the planters.50 The planters resisted the royal order with petitions to annul the 1781 contract. Hierro, the fiscal Ramon de Posada and the viceroy rejected the petition, and they were supported in the royal order of July 10, 1783.51

The 1781 contract remained in effect until 1786. The growers were permitted to send deputies to negotiate a new contract, but their efforts were unsuccessful. Viceroy Conde de Galvez (1785-1787) ordered individual five-year contracts, and the prices he ordered marked the beginning of a stable price arrangement which would survive until the economic breakdown







71

following the 1810 rebellion. Some of the planters signed for two years, ending with the 1788 harvest. Others signed for five years, to 1791.52 Prices were set at 3 reales per libra, 2 reales and 1 real for primera, segunda and tercera, respectively, and at 24 reales per arroba for punta.53

In 1788 disputes arose over reduction of plantings for the Cordoba

and Orizaba planters whose contracts expired that year. Before any settlement could be achieved, Real died on February 18, 1789. The director, Hierro, then recommended the abolition of Real's position and the viceroy agreed in March. The factors of Cordoba and Orizaba took over Real's functions.54 New contracts, based on 1786 prices, were signed in 1790, 1791,55 1794, 1796, 1801 and 1807.56 Contract negotiations in 1806 witnessed planter demands for a restoration of the 1765 prices because of the inflation caused by war. The monopoly refused, planted tobacco on its own account and saved 55,580 pesos. In 1807 the planters agreed to the 1786 prices.57

The second major problem confronting the tobacco monopoly in its efforts to organize the growing sector was to determine in what regions to plant tobacco. When the monopoly expanded the 1764 royal order by adding Jalapa to Cordoba, Orizaba and Teusitlan as part of the legal growing region in New Spain, the establishment of Jalapa as a factoria indicated a degree of permanence in the decision. At the same time that the factorias were being created, however, Espinosa was already proposing changes in the growing regions. His point of view, supported by Real, revealed the importance which would be placed on the organization of the monopoly's resguardo, or guard system, in determining where tobacco should be grown.58

At the request of the junta de tabaco, Espinosa and Sebastian Calvo journeyed to Cordoba, Orizaba and Teusitlan in May, 1765, to survey the







72

region and to determine the needs of a resguardo system.59 Their subsequent report to Viceroy Croix revealed Espinosa's concern with organizing the growing area in accordance with the capacity of the resguardo to prevent contraband. In describing the geographical layout of the region, Espinosa and Calvo noted that the mountainous terrain of Cordoba and Orizaba provided an easily-guarded enclave. Teusitlan and Jalapa, by contrast, were open territory, difficult and expensive to guard, even with a mobile police force (ronda volante). If Cordoba and Orizaba could supply the colony, they suggested, it would be prudent and economical to prohibit planting in all other areas.60

The deputies elected by the growers of Teusitlan, Agustin Mallol and Joaquin Martinez, did not share the director's attitude. In February, 1765 they had submitted a petition to Spain and to the viceroy and junta in New Spain complaining of efforts by the deputies from Cordoba and Orizaba to denigrate tobacco from Teusitlan, probably in an effort to push their own prices up. The Teusitlan deputies requested the appointment of experts to inspect and compare tobacco from Teusitlan, Cordoba and Orizaba and to report their findings to the King. Admitting that the best tobacco from Cordoba and Orizaba was superior to Teusitlan tobacco, they argued that tobacco from Huatusco and Coscomatepec in Cordoba and from Songolica in Orizaba was of the same quality as Teusitlan's leaf. The 1765 contract, however, awarded higher prices to all planting regions in Cordoba and Orizaba.61 In their representation to Spain, the deputies stressed the poverty of Teusitlan and the importance of tobacco planting to their economic well-being.62

Arriaga sent the petition to Espinosa, ordering a response.63 Espinosa, noting that he had received the same petition, flatly rejected the deputies on several grounds. Teusitlan tobacco was inferior to the Cordoba







73

and Orizaba product, a fact well-recognized by established experts, Tobaccogrowing in Teusitlan was a recent development, partly explaining its lesser quality. The King's orders explicitly demanded the best quality tobacco to be grown for the monopoly, to guarantee the satisfaction of consumers. Referring to his May visit to the growing regions, Espinosa again pointed to the difficulty of guarding against contraband in Teusitlan. The same was true for Jalapa, an area whose production was meagre and of poor quality. He recommended abolition of planting in Jalapa when the current contract expired. In general, he argued, growing should be disallowed in those areas producing inferior tobacco and difficult to guard. Cordoba and Orizaba, including the Songolica region, could provide an adequate supply of tobacco for the colony and experts agreed that it was the best tobacco in New Spain.64

The Teusitlan issue was not raised seriously again until the negotiations for the 1767 contract. In June, the fiscal, Velarde, gave an opinion recommending the complete abolition of planting in Teusitlan and Jalapa. The junta, however, decided upon only a partial restriction and agreed to allow tobacco growing in Jobo in Teusitlan and Coatepec in Jalapa 65
for the duration of the 1767 contract (see Figure 2). Espinosa noted that the junta had opposed planting in Teusitlan from the beginning of the monopoly and had actually proposed its elimination several times. Only the protests of the planters had convinced the junta to continue planting in the two areas in 1765 and, again in 1767, when only Jobo and Coatepec were permitted to plant.66

Espinosa continued his opposition to tobacco growing outside Cordoba and Orizaba. By 1769 reports of contraband had convinced him of the necessity of limiting the growing zone. Despite the presence of guards






74


GROWING REGION S 1 1769


O O C N n T'l EN


0 S lc] /l
0 0/
O/

Teusitihn
SI Jalap
/
rI j oatepe I
----.- O O




; eHuatusco I I

O I O Coscomatepe / rz 0 0


/ I




SC e u L L !
] l








Source: Calderdn Quliano, Carls M, I.







75

in Teusitlan and Jalapa, contraband was rampant, causing monopoly income to decline or remain low in the bishoprics of Oaxaca, Puebla and Veracruz. This evidence, he declared, made abolition of planting in Jobo and Coatepec imperative. 67

By 1769, however, Espinosa was prepared to limit growing even further than in 1767. Using reports from Real, he argued that planting in Huatusco and Coscomatepec in the factoria of Cordoba should also be prohibited. These areas could not be guarded effectively because of their distance from the major guardposts. Moreover, the fields were open and the people displayed a "propensity" for contraband, These lands should be converted to corn, beans and other vital crops. Songolica, in the jurisdiction of Orizaba, could produce the tobacco currently provided by Coscomatepec and Huatusco.68 Croix agreed with Espinosa and elected to extend the 1767 contract for one year, to permit time for gradual change and for consul69
tation with Spain.

In preparation for the 1770 contract negotiations Espinosa, actively supported by Real, again raised the issue of abolishing planting in Jobo and Coatepec. Repeating his earlier arguemnts, he declared that contraband, combined with the low yields of Jobo and Coatepec, continued to lower the monopoly's income.70 Real- supported Espinosa's reasoning on the entire matter. Jobo and Coatepec, he pointed out, cost too much to guard in relation to their yield. Huatusco and Coscomatepec, although in the jurisdiction of Cordoba, were too distant for effective control. The planters in these four areas, and particularly in Jobo and Coatepec, were notorious contrabandists, causing a decline in monopoly revenues in Puebla and Oaxaca. Referring to the large volume of seizures in Veracruz, Puebla and other areas, Real declared Jobo and Coatepec to be impossible to guard. The guards, moreover, lived "in the hands of death" in the






76

areas, fearing for their lives to the extent that they could not carry out their responsibilities properly, Since tobacco was a recent crop in the area the argument that the growers had no other means of livelihood was not valid. The best solution, he concluded, was to abolish all planting in Jobo, Coatepec, Huatusco and Coscomatepec.71

The directors offered other reasons for their opposition to planting
72
in Teusitlan and Jalapa.7 They complained that the high costs of maintaining two factorias, with their respective officials and guards, were not compensated by their output. Some growers could convert to corn, beans and other crops, while others could go to Cordoba and Orizaba to continue as planters.73 Real was also unsympathetic to the position taken by representatives of the areas outside Cordoba and Orizaba, as revealed in his response to a petition from the alcalde mayor of Teusitlan. The restriction of planting in Teusitlan to only Jobo, the alcalde mayor argued, caused a general decline in the area, leading to shortages, decreased income and deterioration of the farms. The changes in tobacco planting, Real countered, had nothing to do with the economic decline. Any problems were the consequences of the residents' lack of application to crops other than tobacco, as indicated in their serious application to contraband. The income of the Renta declined in Puebla and Oaxaca as a result of their activities. The cause of Teusitlan's economic difficulties was the "idleness, vagrancy and iniquitous behavior" of the inhabitants.

Croix was convinced by the monopoly's arguments. On May 15, 1770

he ordered the abolition of all planting in Jobo and Coatepec in Teusitlan and Jalapa and in Huatusco and Coscomatepec in Cordoba. Planters in Huatusco and Coscomatepec were permitted to consult with Real concerning permission to grow tobacco in other parts of Cordoba. Teusitlan and







77

Jalapa were placed under the same restrictions as other prohibited
75
areas,

To complete the change in growing regions, the monopoly also adjusted the administrative and resguardo systems, The factoria of Puebla absorbed the factorias of Jalapa and Teusitlan, changing them to administrations under Puebla's jurisdiction. The administration of San Juan de los Llanos was separated from Jalapa's immediate jurisdiction and placed under the control of Puebla. The factor of Jalapa, Antonio Primo de Rivera, became administrator of the new administration of Jalapa. The contador of Jalapa, Francisco Maniau y Ortega, was appointed oficial mayor of the contaduria in the factoria of Puebla. The factor of Teusitlan, Francisco Sabariego, became visitador of one of the two resguardo rondas into which the resguardo of Teusitlan was to be dividied. The contador of Teusitlan, Josef Reyes, became administrator of the administration of Teusitlan.76

The monopoly also altered the resguardo in the growing areas to conform to the new administrative system. In Teusitlan the resguardo was divided into two units, one headed by the former factor, Francisco Sabariego, as visitador with four guards and the other by teniente Miguel Rodriguez, with three guards, Jalapa continued with five resguardo personnel, headed by teniente Josef Joaquin de Acosta. No changes were made in Puebla, although the resguardo from that factoria were given some 77
powers in Teusitlan and Jalapa.

Reconocedor Real, who doubled as jefe de resguardo in the growing areas, continued his jurisdiction over Teusitlan and Jalapa as well as over Cordoba and Orizaba. Shortly after Croix's order to abolish growing in Teusitlan and Jalapa, he awarded Real a formal title outlining his powers and responsibilities as Reconocedor and as commander of the resguardo. As commander, Real was authorized to nominate all his subordinates







78

to the directors of the monopoly and to hear all cases involving crimes by his resguardo, in and out of duty,78 The factors of Cordoba and Orizaba were required to obtain Real's approval in any decisions related to resguardo or Reconocedor jurisdiction. Real received broad powers to police contraband activities in any of the real hacienda branches, although the tobacco monopoly was his major responsibility. He was authorized to inspect the tobacco fields, stores, warehouses and processing buildings, and with viceregal approval he could also exercise his powers outside Cordoba and Orizaba. Finally, he was allowed to carry firearms.79

The directors were pleased with the immediate savings from the change in growing areas. The monopoly saved 850 pesos in Jalapa and 1,423 in Teusitlan. Increased resguardo costs of 1,100 pesos, however, reduced total annual savings to 1,173 pesos, without considering the economic 80
benefits which would result from the improved resguardo system. The planters of Teusitlan and Jalapa petitioned against the decision to abolish growing in their areas, but the directors informed them that all actions were final.81

The 1770 changes were not the final settlement of the acceptable

planting zone. On August 31, 1772 the fiscal, apparently in response to a petition from Huatusco, recommended that Huatusco be permitted to grow tobacco.82 The viceroy agreed to consider the matter, and the directors requested a delay while Francisco Diaz, the factor of Cordoba, studied the petition more carefully.83 Diaz prepared a map of the area and reported that it could grow eight or nine million matas without inordinately high resguardo costs. The directors agreed with Diaz and recommended to Bucareli that the petition be accepted,84 Real concurred, suggesting a minimum planting of four million matas to offset resguardo costs and requesting assurances of tobacco quality generally equal to that of Cordoba.85







79

Bucareli approved of the decision and ordered Huatusco's inclusion in the next contract,86 On October 12, 1773, Cordoba, Orizaba, Songolica and Huatusco signed a tobacco contract, thereby establishing, after nine years, the Cuatro Villas often reported in secondary sources on the tobacco monopoly.87 These four districts, named after their principal towns and referred to by monopoly officials as the Villas,88 continued to make up the growing zone until the end of the colonial period (see Figure 3).89

In addition to domestic supplies, the tobacco monopoly received

tobacco from Louisiana. As early as 1771 Galvez had noted the favorable disposition of consumers toward Louisiana tobacco and had commented on its 90
lower price compared to tobacco from the Villas, Havana or Caracas. He recommended that the monopoly import tobacco from Louisiana regularly.91 In 1776 the Crown ordered the tobacco monopoly to begin importing tobacco from Louisiana for the purpose of encouraging economic development in that colony.92 The monopoly also sent experts from Cordoba and Orizaba to teach tobacco growing, processing and packing techniques to the Louisiana planters.93

In 1785 the audiencia of Mexico reported to Spain that consumers disliked Louisiana tobacco and that the monopoly suffered great losses in the transport and storage of the leaf. Viceroy Manuel Antonio Florez (17871789) made a similar report in 1788 when he learned of the plans of Natchez planters to send tobacco in barrels, which would increase costs of removing the rolls (andullos).94 Acting on complaints from the directors, in 1789 the viceroy ordered the immediate suspension of tobacco imports from Louisiana, until the King could be consulted. Officials had received a report on tobacco imports from 1778 to 1788 indicating an average loss of 95
twenty-six percent from spoilage and from losses during transport. In 1790 the governor of Louisiana suspended tobacco exports to New Spain.96







80



LAS QUATRO VILLAS 1782











I \



/I
II iajll




















Source: AGN, Renta,vol. 43
1 I


















#o







81

A royal order in 1790 indicated that the monopoly would purchase the 1790 harvest and from January 1, 1791 only 40,000 libras would be purchased each year, for export to Spain. Another royal order of 1791, however, ordered that tobacco exports from Louisiana cease altogether as of January 1, 1792.97

The purchase and sale of Havana snuff was also part of the tobacco monopoly's operation. First-class snuff, called esquisito, was purchased at 6 reales per libra and sold at 20.98 Second-class snuff, called fino, was prepared in Mexico by mixing Mexican tobacco with esquisito from Havana, Its similarity to first-class Havana snuff, however, facilitated fraud, and fino was abolished in 1776. Third-class snuff, called comun, 99
was prepared from deteriorated tobacco in Mexico. In 1784 Francisco Casasola agreed to pay 2,000 pesos a year for the right to produce a new class of snuff, referred to as superior de nueva fabrica, using some esquisito from Havana. Its price was higher than the Havana import, sales were low and the monopoly suffered losses.100 Sales of Casasola's snuff appear for the last time in the monopoly accounts of 1797.101

The third major problem concerning the establishment of the growing sector was the determination of how much tobacco to produce and how much to keep on hand. Maintaining adequate supplies was regarded as one of the most vital responsibilities of the directors, because the success of the monopoly depended upon meeting consumer demand. A dispute among the top officials of the monopoly over tobacco supplies began in 1766. The contador, Phelipe del Hierro, wished to increase tobacco plantings from the expected annual yield of 10,000 to 11,000 tercios because he regarded this quantity as inadequate to supply the monopoly, The directors, on the other hand, favored a reduction in plantings because they







82

102
wished to avoid a tobacco surplus. Despite warnings and the presentation of Hierro's accounts, the directors reduced plantings in 1767, 1768,103 and again on April 26, 1769, to only 6,000 tercios.104

The matter came to a head on November 3, 1769, when Hierro reported an impending tobacco shortage to the viceroy. Responding to Francisco del Real's recent reports of a small harvest expected in the Villas, Hierro informed Croix that it was his duty to bring the matter to his attention. In taking this action, Hierro exposed the long-running dispute between himself and the directors and provided new ammunition for attacks against the directors of the monopoly.105

Hierro had not responded immediately to the April, 1769 order to

plant only 6,000 tercios, he explained, because it was a clear statement that he had been unable to convince the directors of his point of view. In issuing the order they had not even requested a simple report of supplies on hand, indicating what Hierro referred to as a "permanent state of mind" on the matter of supplies. In October, however, Hierro decided to act. He submitted an account to the directors reporting that tobacco stocks would be depleted by mid-1771, leaving none for July through September of that year. The recent opening of the Mexico City factory, moreover, would probably exacerbate the shortage. He advised strongly that the directors increase plantings.106

Although Espinosa responded to Hierro's report by agreeing to increase 107
plantings to 13,000 to 14,000 tercios in Cordoba and Orizaba, he also requested additional documentation in order to prove that Hierro was in error about tobacco supplies.108 On October 23, however, Real reported that the 13,000 to 14,000 tercios could not be harvested because the order 109
for the increase arrived too late in the year, It was shortly after receiving this letter that Hierro submitted his November 3 letter to the







83


viceroy. Hierro, refusing to accept responsibility for any shortages, traced the background of his disagreement with the directors and explained his frustration at having his reports rejected.110 Croix passed his correspondence to the fiscal, Jose Antonio Areche. Unable to ascertain the validity of Hierro's arguments, Areche recommended that Croix prepare for a shortage and immediately obtain a report from the directors.111

The directors refused to accept Hierro's assessment of the situation. Offering his own figures, Espinosa explained his concern for avoiding excessive supplies which might spoil in the warehouses. The April, 1769 decision to reduce plantings to 6,000 tercios, he noted, was based on Real's reports of an expected higher than normal harvest. When Hierro wrote to him in October, six months later, he had responded by immediately increasing 112
plantings to avoid the shortage Hierro predicted for 1771. Co-director Frago, in a separate letter, indicated his agreement with Espinosa on the need to avoid surpluses that might spoil. He believed, however, that Espinosa had erred in the April, 1769 order to decrease plantings. Espinosa had ordered the reduction during Frago's absence, and he did not become aware of the change until Hierro sent his report in October. Frago argued that Hierro should have acted sooner, to avoid having to trouble the viceroy. He did not accept the statements made in Hierro's November 3 letter to Croix, believing that Hierro's fears were unjustified and indicated "panic," because there would be no shortage of supplies. Frago also suggested that Hierro was merely conjecturing, since he did not know the yield of the current harvest.113

After receiving documentation from Espinosa on earlier orders concerning planting, Croix again consulted Areche.114 Areche requested additional information from the monopoly.115 Frago then reported that Espinosa's error in ordering only 6,000 tercios resulted from his belief







84


that the harvest would be larger than actually occurred, presumably based on Real's reports.116 A little later, in March, 1770, Hierro accused Espinosa of misusing his accounts and supplied a new set of figures to indicate supplies would run out by October, 1771. Part of his argument was based on a recent report from Real that the current harvest would be no more than 8,000 tercios.117 Areche was impressed by Hierro's figures. They provided, he noted, a "clear demonstration of the serious damage threatening the Renta and the Kingdom."118 The arguments of Espinosa and Frago did not conform to the facts, the fiscal declared, and it was imperative that the directors and Hierro offer proposals on how to best avoid the shortage. After offering his own suggestions, Areche recommended that Croix order the directors to be more vigilant by obtaining proper data from the contador when determining yearly plantings. To clear Croix of any responsibility in this matter, he also urged the viceroy to order Espinosa and Frago to send personal accounts to Spain to explain the 119
causes of the shortage,

In response to Areche's recommendation, Hierro proposed that the

monopoly purchase tobacco from Havana, Guatemala, Santo Domingo, Caracas or Louisiana. Frustrated by Espinosa's continued intransigence, but pleased with Frago's acceptance of the impending shortage, Hierro noted that Real's latest report indicated an even smaller harvest for the current year, 6,000 tercios rather than 8,000. Espinosa, he continued, had to be convinced of the seriousness of the situation. The monopoly was going to have to purchase about 1,500,000 libras of leaf tobacco, and the shipments 120
would have to begin arriving by November of the current year.

Upon receiving Hierro's letter, Croix called a junta of the principal tobacco monopoly officials, the fiscal, the asesor of the monopoly, and







85

121
Galvez' subdelegate, Both Hierro and Espinosa presented their views
122
on the matter, and the junta agreed, with the exception of Espinosa, that Hierro's warnings of a 1771 shortage were valid. The junta recommended three courses of action. First, the monopoly would not wait sixty days for delivery of tobacco after it was formed into tercios..> Second, the Renta would use the poorer quality tobacco, known as zacate. Third, tobacco would be purchased from outside New Spain, 500,000 libras from Havana and, if necessary, Santo Domingo, and 500,000 libras from Caracas. The tobacco should be received in Veracruz by November, 1770.123

Although the immediate problem was resolved by the junta, the higher officials in the colony did not regard the matter as completely settled. First Croix, then Areche and Galvez, called for the removal of Espinosa and Frago as directors of the monopoly. Almost immediately, Croix wrote to Arriaga to notify him of the junta's decisions. He accused the directors of disobeying previous orders from himself and the junta concerning rama supplies to be maintained on hand, of giving orders without his authorization, and of disregarding Hierro's accounts. The documentation on this issue, Croix argued, should convince the minister of the need to remove the directors; otherwise, the monopoly would be risking continued mismanagement. Croix advised Arriaga that he would have removed Espinosa and Prago if he had alternative employment for them, since he was extremely perturbed by their "pernicious system" of disobeying his orders. Until other measures could be taken, he concluded, he would act as the director of the monopoly.124

Areche noted how Frago's acceptance, and Espinosa's denial, of the shortage were "another" example of the inability of the two men to work together. They were always disagreeing, and since neither was able to







86

do a competent job alone, the monopoly was not progressing as it should. The shortage was unnecessary, resulting from lack of foresight and disregard for Hierro's warnings. Areche expressed "little confidence" in the directors because of their "continuous discords." Unless they were removed, the tobacco monopoly would not advance.125

Galvez also advised that the directors be dismissed and gave his

reasons, When he arrived in 1765, not only was the monopoly in disarray but Espinosa had violated royal orders by leasing the monopoly. Only by imposing his authority had the monopoly been established on a sound footing. It had been agreed that it was necessary to maintain a two-year supply of rama on hand, to offset losses from bad years, usually one in five, and to allow for the large distances to deliver the crop after June or July each year. Mentioning only delays in sending tobacco to the Provincias Internas, Galvez declared that he and the viceroy, often with the fiscal, had made repeated orders to improve the monopoly. The directors, however, had resisted, and in doing so had attempted to "destroy the Renta, or at least to delay its rapid progress."126

Although not mentioned in this letter to Croix, Galvez expanded on the list of grievances against the directors in his 1771 Informe to Bucareli. He complained of the excessive prices of the 1765 contract, when Espinosa was director and Frago contador. He noted their "constant and ostentatious" opposition to the factory, which had earned profits of fifty percent, Their decisions to reduce snuff prices in Durango and the Provincias Internas, without authorization, and to reduce the duty on snuff in Veracruz from 20 to 12 reales had both damaged monopoly income, The latter action had opened the door to private imports of snuff, thereby limiting monopoly sales,127 The tobacco shortage, however, was by far the most serious error committed by the directors. Like Croix, Galvez







87

declared that they had abused their authority and exposed the monopoly to a total loss of income, Like Areche, he regarded the scandalouss" discord of the directors as inimical to the progress of the monopoly. Their continued presence, Galvez argued, would impede efforts to establish the monopoly under royal administration, since their record indicated they were opposed to administration, Because he saw no hope for improvement in the future, Galvez recommended they be removed and replaced by the contador, Hierro, the treasurer, Echeveste, and the administrator general, Huarte.128

On August 1, 1770, Croix appointed Hierro, Echeveste and Huarte as

co-directors with Espinosa and Frago. The three men continued to exercise their offices as contador, treasurer and administrator general, respectively, but all decisions by Espinosa and Frago were to be cleared through them. Croix explained his decision as a temporary arrangement, until he could receive further instructions from Spain.129

The conflict over the establishment of the growing sector in the early years of the monopoly dissipated in the 1770's and all but disappeared in the 1780's, as rama sales declined in proportion to the growth of production of labrados. In 1770, for example, the monopoly sold 2,012,750 130 131 libras of rama to consumers; by 1784 sales were only 276,811 libras, because labrados had replaced rama in the sales figures of the monopoly. The significance of contract negotiations, however, should not be ignored, even though price stability was achieved by the 1780's. Tobacco contracts were always one of the key cost factors to be considered by the monopoly in its continual struggle to expand revenues in the latter eighteenth century. Fonseca and Urrutia referred to the planting and contract negotiations as the "cement" of the monopoly's progress. In the same sense







88

that a business enterprise attempted to minimize costs, they pointed out, the monopoly attempted to keep tobacco prices low in the contracts.132 Although as a monopoly the Renta could determine price levels to a considerable extent, it was limited somewhat by traditional practices. The single most important limitation, and certainly a traditional practice, was the ever-present possibility of contraband, If the price of rama were set too high in relation to the price at which it could be sold by planters, both contraband planting and purchasing became more attractive. As the manufacturing sector expanded, moreover, the monopoly was forced to consider the possibility that consumers would turn from monopoly labrados to rama if the price of labrados became too high. The monopoly was aware of the economic reality of its position. Galvez' desire to develop the factories was undoubtedly affected by his recognition of the limitations 133
of earnings from rama sales alone. The issue of rama versus labrados, apparently resolved by the royal order of October 24, 1767, did not die with the establishment of the factories under monopoly administration. The context of the problem, however, was altered by developments in the last decades of the eighteenth century.



NOTES

1. February 21, 1765, Testimonio de contrata de las villas de
Cordova y Orizava para las cosechas de tavacos de los airos de 1765, 1766 y 1767, AGN, Renta, vol. 8, fols. 2-5.

2. February 21, 1765, Testimonio de contrata 1767, AGN, Renta, vol. 8, fols. 5v-6.

3. An arroba is equal to 25 libras.







89

4, The weight of a tercio varied according to the class of tobacco and the number of manojos, 1767 calculations indicated the average weight of a tercio of primera class rama weighed 187.5 libras gross; segunda weighed 162.5 libras gross; and tercera weighed 137.5 libras gross. Deputies of Cordoba and Orizaba to Croix, May 26, 1767, AGN, Renta, vol. 8, fols. 22v-25.

5. Referred to as "buen peso o caida."

6. Referred to as "mermas y enjugo."

7, February 21, 1765, Testimonio de contrata 1767, AGN, Renta, vol. 8, fols. 6-6v.

8. February 21, 1765, Testimonio de contrata 1767, AGN, Renta, vol, 8, fols. 6-7.

9. February 21, 1765, Testimonio de contrata 1767, AGN, Renta, vol. 8, fol. 7.

10. February 21, 1765, Testimonio de contrata 1767, AGN, Renta, vol. 8, fol. 7,

11, Galvez, Informe, p. 23.

12, Cruillas to Arriaga, July 18, 1765, AGN, Renta, vol. 8, fols. 16-17,

13. Hierro to Croix, August 20, 1767, AGN, Renta, vol. 8, fols. 6162; Fonseca and Urrutia, vol. 2, 369.

14. See Chapter Two, note 36.

15. Fonseca and Urrutia, vol. 2, 373.

16. Galvez, Informe, pp. 22, 29.

17. Ibid., pp. 33, 43.

18. Croix to Arriaga, February 28, 1768, AGN, CV, vol. 15, fol. 31; Galvez, Informe, p. 43, notes that a royal order of June 22, 1768 approved Croix's decision.

19. Galvez, Informe, p. 29.

20, The first contract (1765) provided for thirty days.

21, Francisco del Real to Galvez, December 2, 1771, in Galvez, Informe, Appendix 1, pp. 161-165.

22. Croix to Arriaga, September 22, 1766, AGN, CV, vol. 11, fols. 63-64, mentioned that the planters complained of low prices.








90

23, Deputies of Cordoba and Orizaba to Croix, May 8, 1767, AGN, Renta, vol. 8, fols. 18-21,

24. Espinosa and Frago to Croix, May 14, 1767, AGN, Renta, vol, 8, fols. 21-21v.

25, Espinosa and Frago to Croix, May 14, 1767, AGN, Renta, vol. 8, fols. 21-21v,

26. Juan Antonio Velarde to Croix, May 19, 1767, AGN, Renta, vol. 8, fols. 21v-22v.

27. Deputies of Cordoba and Orizaba to Croix, May 26, 1767, AGN, Renta, vol. 8, fols. 22v-25.

28. Espinosa and Frago to Croix, June 11, 1767, AGN, Renta, vol. 8, fols. 25v-26. The factor of Orizaba, Bernardo Maria de Mendiola, to Croix, June 5, 1767, AGN, Renta, vol. 8, fols. 26-28, and factor of Cordoba, Francisco Diaz, to Croix, June 4, 1767, AGN, Renta, vol. 8, fols, 28-28v. Espinosa and Frago may not have seen the reports. Galvez, Informe, p. 22 in 1771, however, stated that a weight of thirty libras was too low for mats and cords but added that the 1765 contract did not consider weight loss from the deveining of tobacco leaves.

29. Junta to Croix, July 14, 1767, AGN, Renta, vol. 8, fols. 34-35.

30, Espinosa and Frago to Croix, July 18, 1767, AGN, Renta, vol. 8, fols. 36-39.

31. Deputies of Cordoba and Orizaba to Croix, July 24, 1767, AGN, Renta, vol. 8, fols. 39v-48.

32. Calderon Quijano, Carlos III, vol. 1, 336. Croix to Directors, September 1, 1767, AGN, Renta, vol. 8, fol. 70, ordered settlement of the contract and mentioned a "plan," probably the price proposals referred to by Calderon Quijano.

33. Espinosa, Frago and the Deputies of Cordoba and Orizaba to Croix, September 15, 1767, AGN, Renta, vol, 8, fols. 57v-59, 71-72.

34. Croix to Directors, September 16, 1767, AGN, Renta, vol. 8, fol. 59,

35. Espinosa, Frago and the Deputies of Cordoba and Orizaba to Croix, September 15, 1767, AGN, Renta, vol, 8, fols. 57v-59, 71-72.

36, Espinosa, Frago and the Deputies of Cordoba and Orizaba to Croix, September 15, 1767, AGN, Renta, vol. 8, fols. 59v-60. Fonseca and Urrutia, vol. 2, 374, offer September 22, 1767 as the date of the contract.

37. Teusitlan and Jalapa will be discussed below.







91

38. Bernardo Maria de Mendiola and Rafael Garcia, November 16,
1803, Pliego que contiene la recopilacion, o resumen de las Contratas, que la Real Renta del Tabaco de N,E. ha celebrado con los Cosecheros de este fruto de la Jurisdiccion de esta Villa de Orizava, desde su ereccion que fue el ano pasado de 1765, hasta el de 1801. AGN, Ramo, vol. 88, fol, 126v.

39, Mendiola and Garcia, November, 16, 1803, Pliego, AGN, Ramo, vol. 88, fols. 126v-127.

40. Mendiola and Garcia, November 16, 1803, Pliego, AGN, Ramo, vol. 88, fol. 127. Fonseca and Urrutia, vol. 2, 377.

41. Calderon Quijano, Carlos III, vol. 2, 152; Arcila Farias,
Reformas economicas, vol. 1, 126-127; Fonseca and Urrutia, vol. 2, 377378. I did not encounter documentation on the source of discontent with Real,

42. Ibid.; Mendiola and Garcia, November 16, 1803, Pliego, AGN, Ramo, vol. 88, fol. 127.

43. Mendiola and Garcia, November 16, 1803, Pliego, AGN, Ramo, vol. 88, fol. 127.

44. Fonseca and Urrutia, vol, 2, 378-380; Calderon Quijano, Carlos III, vol. 2, 152-153, refers to "conflict" but offers no reasons for Real's removal.

45. Mendiola and Garcia, November 16, 1803, Pliego, AGN, Ramo, vol. 88, fol. 127v; Fonseca and Urrutia, vol. 2, 378-380.
Cossio was appointed by Galvez as secretary of the viceroyalty and intendant with supervisory powers over all revenue affairs. Galvez was using Cossfo in an experiment, He had planned to create a special superintendent of real hacienda affairs independent of the viceroy once he could appoint his brother, Matias, as viceroy. Bucareli, however, died in office and was replaced by Mayorga, who came from Guatemala. Ga/lvez then appointed Cosso on August 14, 1779, removing certain real hacienda powers from Mayorga. Cossio served in his special position until March, 1782, greatly disrupting real hacienda affairs and provoking resentment among numerous officials. Brading, Miners and Merchants, pp. 61-63.

46. Mendiola and Garcia, November 16, 1803, Pliego, AGN, Ramo, vol. 88, fol, 129. The monopoly planted on its own account in 1778, 1779 and 1780.

47. Calderon Quijano, Carlos III, vol. 2, 152-155.

48. Fonseca and Urrutia, vol. 2, 380-382. Mendiola and Garcia, November 16, 1803, Pliego, AGN, Ramo, vol, 88, fol. 127v, give June 7, 1781 as the date of the Orizaba contract.

49. Fonseca and Urrutia, vol. 2, 380-382.







92

50. Calderon Quijano, Carlos III, vol, 2, 156,

51, Fonseca and Urrutia, vol. 2, 380-382.

52. Ibid., 382-383; Mendiola and Garcia, November 16, 1803, Pliego, AGN, Ramo, vol. 88, fol, 128.

53. Mendiola and Garcia, November 16, 1803, Pliego, AGN, Ramo, vol. 88, fol. 128v, note that these contracts added primera and segunda roto (broken) at 2 7/8 and 1 7/8 reales per libra, respectively. In 1790 punta fina was added, at 1 1/2 reales per libra.

54. Fonseca and Urrutia, vol. 2, 383, 386. The royal order of July 10, 1790 approved of the viceroy's action.

55, Ibid., 384; Mendiola and Garcia, November 16, 1803, Pliego, AGN, Ramo, vol. 88, fols. 127v-128.

56. Mendiola and Garcia, November 16, 1803, Pliego, AGN, Ramo, vol. 88, fol, 128v; Calderon Quijano, Carlos IV, vol. 2, 251.

57. Calderon Quijano, Carlos IV, vol. 2, 251.

58. The establishment of the monopoly required abolition of tobacco planting in certain areas of the colony. Fonseca and Urrutia, vol. 2, 368-369, and Espinosa to Croix, February 28, 1769, AGN, Renta, vol. 8, fol. 85, both mention Tepic, Compostela, Tehuacan, San Juan de los Llanos, Huachinango and "others." Humboldt, vol, 3, 39, mentions important areas in the Intendancy of Guadalajara. In a letter from Croix to Arriaga, June 20, 1768, AGN, CV, vol. 12, fol. 210, Croix notes that he rejected petitions from the Bishop of Guadalajara to grow tobacco in the Costa del Sur, where tobacco had been grown before the monopoly was created.

59. Fonseca and Urrutia, vol, 2, 368-369; Galvez, Informe, p. 24.

60. Espinosa and Calvo to Croix, June 10, 1765, AGN, Renta, vol. 8, fols. 13-14.

61. Mallol and Martinez to Croix and Junta, February 11, 1765, AGN, Renta, vol. 8, fols. 78-78v.

62. Mallol and Martinez to King, February 11, 1765, AGN, Renta, vol, 8, fol. 78,

63, Arriaga to Espinosa, September 1, 1765, AGN, Renta, vol. 8, fol. 78.

64, Espinosa to Arriaga, April 7, 1766, AGN, Renta, vol. 8, fols.
79-79v. Ernesto Lemoine Villacaia, estudio preliminar, notas y apendice, "Documentos y mapas para la geografia historica de Orizaba (1690-1800)," Boletfn del Archivo General de la Nacion, 2nd ser., vol. 3 (1962), 466-470, states that Orizaba became, after 1728, a major center of tobacco production in New Spain. The Jalapa fair was moved to Orizaba from 1724 to 1728,




Full Text
96
104.
Directors
to Real, April 26,
1769, AGN,
Renta,
vol,
8,
fol.
236
105,
Hierro to
Croix, November 3,
1769, AGN,
Renta,
vol.
8,
fol.
215
106, Hierro to Directors, October 11, 1769, AGN, Renta, vol. 8,
fols, 218-220v,
107. Espinosa to Hierro, October 17, 1769, AGN, Renta, vol. 8,
fol. 223. Espinosa to Bernardo Maria de Mendiola and Juan de Arias,
October 18, 1769, AGN, Renta, vol. 8, fols. 237-237v, Espinosa ordered
meetings with Real and the factor of Cordoba, Francisco Diaz, to determine
increases in planting in Cordoba and Orizaba.
108. Espinosa to Hierro, October 17, 1769, AGN, Renta, vol. 8,
fol. 223.
109. Real to Espinosa, October 23, 1769, AGN, Renta, vol. 8, fols.
250-251,
110. Hierro to Croix, November 3, 1769, AGN, Renta, vol. 8, fols.
217-217v,
111. Areche to Croix, November 23, 1769, AGN, Renta, vol. 8, fol.
218.
112. Espinosa to Croix, December 14, 1769, AGN, Renta, vol. 8,
fols. 238-241v.
113. Frago to Croix, December 14, 1769, AGN, Renta, vol. 8, fols.
230-233.
114. Espinosa to Croix, December 24, 1769, AGN, Renta, vol. 8,
fol. 251v, and Croix, decree, December 27, 1769, AGN, Renta, vol. 8,
fol. 252.
115.Areche to Croix, January 18, 1770, AGN, Renta, vol. 8, fols.
252v-253,
116. Frago to Croix, February 6, 1770, AGN, Renta, vol. 8, fol. 253v
117. Real to Hierro, March 5, 1770, AGN, Renta, vol. 8, fols.
274-274v, and Hierro to Croix, March 12, 1770, AGN, Renta, vol. 8,
fols. 256-271, 274v-277v.
118.
Areche
to
Croix,
April
4,
1770,
AGN,
Renta,
vol.
8,
fol. 277v
119.
277v-279v.
Areche
to
Croix,
April
4,
1770,
AGN,
Renta,
vol.
8,
fols.
120.
Hierro
to
Croix,
April
23
, 1770
, AGN
, Renta
, vol
. 8
, fols.
279v-291, and Real to Hierro, April 17, 1770, AGN, Renta, vol. 8,
fol. 291.
121. Croix decree, April 25, 1770, AGN, Renta, vol. 8, fol. 292.


14
is extremely useful because of Galvez' important role in the early years
of the monopoly.
The most extensive contemporary source dealing with the monopoly is
the Historia general de real hacienda, completed in 1794 by Fabian de
Fonseca and Carlos de Urrutia. Viceroy Conde de Revillagigedo (1789-
1794) commissioned the authors in 1790 to prepare a study of the real
hacienda in compliance with articles 109-115 of the Ordinance of Inten-
69
dants (1786). It remained in manuscript form until 1845, when the
Mexican government began publishing it in six volumes. The Historia
general offers a detailed account of the history, current (1790) struc
ture, and yield of all branches of the real hacienda in New Spain. The
section on the tobacco monopoly deals with the period from 1764 to 1790 and
includes a copy of the 1768 ordinances of the monopoly.
A third contemporary account, less valuable but frequently utilized
by historians, is Joaquin Maniau y Torquemada's Compendio de la historia
de la real hacienda de Nueva Espaa, escrito en el ao de 1794.^
Maniau, who also assisted in the preparation of the Historia general,
was the head official (oficial mayor) of the contadura^ of the tobacco
monopoly, contador of the real hacienda pension fund (monte pio de
ministros), and the son of Francisco Maniau y Ortega, contador of the
72
tobacco monopoly. It is, however, merely a summary of the Historia
general.
A fourth contemporary source is Revillagigedo's Informe sobre las
misiones, 1793, e Instruccin reservada al Marqus de Branciforte, 1794.
All viceroys prepared these reports to their succesors upon leaving office,
and Revillagigedo's is noted for being particularly thorough and thoughtful.
Undoubtedly, the statistical data was drawn from materials prepared by
Fonseca and Urrutia, Revillagigedo's Instruccin treats a number of


85
Galvez' subdelegate,Both Hierro and Espinosa presented their views
122
on the matter, and the junta agreed, with the exception of Espinosa,
that Hierro's warnings of a 1771 shortage were valid. The junta recom
mended three courses of action. First, the monopoly would not wait sixty
days for delivery of tobacco after it was formed into tercios*.;. Second, the
Renta would use the poorer quality tobacco, known as zacate. Third, tobacco
would be purchased from outside New Spain, 500,000 libras from Havana and,
if necessary, Santo Domingo, and 500,000 libras from Caracas. The tobacco
123
should be received in Veracruz by November, 1770.
Although the immediate problem was resolved by the junta, the higher
officials in the colony did not regard the matter as completely settled.
First Croix, then Areche and Galvez, called for the removal of Espinosa
and Frago as directors of the monopoly. Almost immediately, Croix wrote
to Arriaga to notify him of the junta's decisions. He accused the direc
tors of disobeying previous orders from himself and the junta concerning
rama supplies to be maintained on hand, of giving orders without his autho
rization, and of disregarding Hierro's accounts. The documentation on
this issue, Croix argued, should convince the minister of the need to remove
the directors; otherwise, the monopoly would be risking continued mismanage
ment. Croix advised Arriaga that he would have removed Espinosa and Frago
if he had alternative employment for them, since he was extremely perturbed
by their "pernicious system" of disobeying his orders. Until other measures
124
could be taken, he concluded, he would act as the director of the monopoly.
Areche noted how Frago's acceptance, and Espinosa's denial, of the
shortage were "another" example of the inability of the two men to work
together. They were always disagreeing, and since neither was able to


215
Part of the plan for subdivision was the popular idea of excluding
men from the factories, By employing only women, it was argued, the threat
of public disturbances would be greatly reduced. Some officials regarded
the exclusion of men as a form of revenge against the lazy male factory
workers. Others, such as Vega and Valero, pointed to the value of employing
Spanish women. Many higher-class women had been unable to go to the fac
tories when the tobacco shops were abolished because they could not subject
themselves to the degradation of working alongside the "ociosas, Con
sequently, many had been forced to produce illegal labrados or to become
involved in prostitution or other scandalous behavior. Officials suggested
that separate workplaces be provided for these women in the factories.
Fear of riots did not have a uniform influence on the attitudes of
officials toward subdivision or abolition of the factories. Vega was in
consistent. Although stressing the seriousness of the demonstrations of
1780, 1782 and 1794, he was willing to abolish the factories and restore
the tobacco shops or to relocate thousands of workers in the provincial
cities. He was completely unimpressed by warnings of the massive unemploy
ment and economic dislocation which might result from his approach, conse
quences potentially much more dangerous than the demonstrations. Others,
notably Maniau and the Tribunal of Accounts, regarded fears of riots as
greatly exaggerated. In Maniau's final opinion on the subdivision he
referred to the three demonstrations as "fatuous fires" and recommended
enlarging the factory in Mexico City. The Tribunal suggested that such
occurrences could be easily avoided with proper foresight, and yet, like
the other real hacienda officials, expressed concern for potential social
unrest should the monopoly attempt to relocate workers.
The arguments raised against the subdivision of the Mexico City factory
did not change the views of its strongest supporters, Vega and Puchet. Nor


166
Papel invertido en ellos, gastos de su elavoracion, y utilidad que ha ren
dido la Fabrica de esta Capital en el ano entero de 1772, BN, Tabacos, v.
Nueva Espaa, Real Hacienda, 1785, vol. 1, ms. 19 (1332), fol. 83; (Un
signed letter), August 23, 1773, AGN, Renta, vol. 47, fols. 414-415v.
7. Croix, March 9, 1768, Instruccin, AGN, Renta, vol. 68, fols.
6-9v.
8. Croix, June 9, 1770, Reglamento de Penas, AGN, Ramo, vol. 483,
fols. 12v-13.
9. Croix, June 9, 1770, Reglamento de Penas, AGN, Ramo, vol. 483,
fols. 13-14. The Reglamento was updated by Viceroy Conde de Revillagi-
gedo (1789-1794) in his April 15, 1794 Bando de Penas, AGN, Renta, vol.
69, fols. 297, 314. The 1794 Bando added some provisions concerning fraud
and gambling in the factory.
10. Croix, June 15, 1770, Ordenanzas de la Fabrica, AGN, Renta,
vol. 71, fols. 50-65; Miguel Puchet and Miguel Valero Olea, October 16,
1793, Ordenanzas de la Real Fabrica de Puros y Cigarros con la ampliacin
y explicacin que pidi el Seor Fiscal de Real Hacienda en 8 de Diciembre
de 1792 y Decreto de Conformidad del Exmo. Seor Virrey de 9 del mismo,
AGN, Renta, vol. 71, fols. 70-135.
11. The 1793 ordinances updated the 1770 ordinances, without making
significant changes. Some personnel were added because of the expansion
of the factory after 1770; others had not been covered in the 1770 ordi
nances. Puchet and Valero Olea to Directors, October 16, 1793, AGN,
Renta, vol. 71, fols. 136-139v.
12. I have been unable to locate any regulations defining the role
of the asesor.
13.Fonseca and Urrutia, vol. 2, 391. The royal order was dated
April 21, 1790.
14. March 15, 1768, "Ordenanzas," in Fonseca and Urrutia, vol. 2,
442.
15.March 15, 1768, "Ordenanzas," in Fonseca and Urrutia, vol. 2,
440-444.
16. March 15, 1768, "Ordenanzas," in Fonseca and Urrutia, vol. 2,
444-448.
17. March 15, 1768, "Ordenanzas," in Fonseca and Urrutia, vol. 2,
448-449; Fonseca and Urrutia, vol. 2, 390.
18. March 15, 1768, "Ordenanzas," in Fonseca and Urrutia, vol. 2,
449-451.
19. Puchet's appointment was approved in a royal order of January 17,
1793. (No author or date), Relacin de empleados en la Renta del Tabaco,
y sueldos que disfrutan, formada por la Contadura General en Virtud de
Real Orden de 26 de Febrero de 1794, AGN, Ramo, vol. 482, fol. 264.


289
Stein, S.J, and S.J. Hunt, "Principal Currents in the Economic Historio
graphy of Latin America," Journal of Economic History, yol, 31 (1971),
222-253.
Supple, Barry. "The State and the Industrial Revolution, 1700-1914,"
in The Fontana Economic History of Europe, Vol. Ill: The Industrial
Revolution. Edited by Carlo M. Cipolla. (London, 1973), pp. 301-357.
Tepaske, John J. "Quantification in Latin American Colonial History," in
The Dimensions of the Past; Materials, Problems and Opportunities
for Quantitative Work in History. Edited by Val R. Lorwin and Jacob
M. Price. (New Haven, 1972), pp. 431-476.
West, Robert C. "The Relaciones Geogrficas of Mexico and Central America,
1740-1792," Handbook of Middle American Indians, vol. 12 (1972),
396-449,
Whitaker, Arthur P. "The Commerce of Louisiana and the Floridas at the
End of the Eighteenth Century," Hispanic American Historical Review,
vol. 8 (1928), 190-204.
Wortman, Miles. "Government Revenue and Economic Trends in Central America,
1787-1819," Hispanic American Historical Review, vol. 55 (1975), 251-
286.


73
and Orizaba product, a fact well-recognized by established experts. Tobacco-

growing in Teusitlan was a recent development, partly explaining its lesser
quality. The King's orders explicitly demanded the best quality tobacco
to be grown for the monopoly, to guarantee the satisfaction of consumers.
Referring to his May visit to the growing regions, Espinosa again pointed
to the difficulty of guarding against contraband in Teusitlan. The same
was true for Jalapa, an area whose production was meagre and of poor
quality. He recommended abolition of planting in Jalapa when the current
contract expired. In general, he argued, growing should be disallowed in
those areas producing inferior tobacco and difficult to guard. Cordoba
and Orizaba, including the Songolica region, could provide an adequate
supply of tobacco for the colony and experts agreed that it was the best
tobacco in New Spain.^
/
The Teusitlan issue was not raised seriously again until the nego
tiations for the 1767 contract. In June, the fiscal, Velarde, gave an
opinion recommending the complete abolition of planting in Teusitlan and
Jalapa. The junta, however, decided upon only a partial restriction and
S
agreed to allow tobacco growing in Jobo in Teusitlan and Coatepec in Jalapa
65
for the duration of the 1767 contract (see Figure 2). Espinosa noted
that the junta had oppos'ed planting in Teusitlan from the beginning of
the monopoly and had actually proposed its elimination several times.
Only the protests of the planters had convinced the junta to continue
planting in the two areas in 1765 and, again in 1767, when only Jobo and
Coatepec were permitted to plant.^
Espinosa continued his opposition to tobacco growing outside Cordoba
and Orizaba. By 1769 reports of contraband had convinced him of the
necessity of limiting the growing zone. Despite the presence of guards


243
TABLE 4 continued
Position
Number of Employees
Total
Workers
7,460
Children
673
8,133
Total
Men
4,305
Total
Women
3,055
7,460
aSee Chapter Five, note 51,
Source: Chapter Five, note 51,


41
professional cigarreros without any other means of livelihood would be
permitted to continue producing labrados; all other merchants were strictly
prohibited from dealing in tobacco of any kind, except to purchase a
prudent number of puros and cigarros to be used in their shops for adeala.^
Manufacturing by the Renta began in some of the factoras after promul
gation of the bando, and the monopoly increased efforts to prohibit tobacco
dealing by non-cigarreros.^''-
In 1766 the Crown unwittingly reopened the debate over manufacturing
by altering the lines of authority for decision-making about the direction
of the monopoly. In a royal order of January 2, 1766, the Crown approved
the actions of the junta through July, 1765, including the decision to lease
the monopoly. By the time the order was received in New Spain, the junta
had already begun to put the monopoly under direct administration. Leas
ing, in fact, was not restored, and the issue did not disturb the monopoly
any further. The January 2 order also advised the viceroy that the head
of the Renta in Spain was to be the Marques de Esquilache, minister of
War and Hacienda. In New Spain, the monopoly was to be under the juris
diction of the junta and the director, without interference from any other
royal officials or tribunals. The monopoly was to use the same methods
and regulations as in Spain, and all necessary revenues were to be drawn
£ O
from the royal treasury, to be repaid from monopoly funds when possible.
On February 25, 1766, however, the Crown revised its previous order
by reorganizing the junta, removing the viceroy from direct participation
and greatly enhancing Galvez' power. The new junta was to be composed
*
of Galvez, two or three audiencia members selected by Galvez, and the two
monopoly directors. The viceroy was to assist Galvez and the directors.
Acknowledging the disputes between Galvez and the junta, and arguing that
they would pass in time, Esquilache ordered close adherence to the visitor's


121
on monopoly policy, often engaging in outbursts of petty rivalry, Espinosa,
for example, complained to the viceroy of Frago's inexperience with tobacco
monopoly practices in Spain,
The most deep-seated hostility within the directorship was directed
toward Frago. Bucareli, like the other directors, regarded him as a
105
troublemaker. Whatever the problem at hand, the viceroy noted, Frago
always held opposing views and proposed new plans, adopting an air of
superiority and disturbing the "tranquil service and peace" of the other
106
directors. The most penetrating, and therefore revealing criticism
of Frago came from the pen of administrator general Riva. His discontent,
suggesting personal animosity toward Frago, offers important insight into
the difference in approach to the administration of the tobacco monopoly
between the "older" officers, Espinosa and Frago, and the newer ones,
Hierro, Echeveste and Riva. One can also hear echoes of the modernizing
s
voice of Joseph de Galvez.
Writing in July, 1773, Riva noted the continual discord he had
observed between the directors ever since his arrival from Spain as a
contaduria official in 1766. This "scandalous and harmful" rift between
Espinosa and Frago was the principal cause, he noted, of the "retarded
condition" of monopoly revenues. Because of their constant "lack of ob
servance of the regulations," as they proceeded in their own separate
directions, the monopoly suffered.^7 Riva was particularly incensed by
what he regarded as their "inaction." They managed the monopoly, he
complained, in accordance with their own views, obeying only those orders
which coincided with their own ideas. If they were unable to evade the
orders, they interpreted them to suit themselves and caused digressions
and delays in matters which should be settled quickly. They wished to


259
TABLE 17 continued
Direction General Guard Unit
Sergeant 72
3 Soldiers @ 48 144
Other Administrative Costs
Pension to Mathias de Armona 200
Salary to contractor of Rape Factory, Antonio Leblanc 1,500
Commission to Fermin Percaz, contadura official, for
establishment of Queretaro factory 500
Commission to Mariano Osorio Soto, sobrestante mayor,
for assistance at Queretaro factory 793
Total Costs 67,229
ADMINISTRATION GENERAL OF MEXICO
ANNUAL SALARIES
Administration
Administrator general 4,000
Contador 1,500
4 Officials @ 600 to 1,000 3,100
Administration del Casco (Mexico City)
Administration
Administrator 1,300
Oficial de libros interventor (inspector) 1,000
Scribe 600
Treasury
Caj ero (treasurer) 1,200
Assistant 500
Recontadores
2 Recontadores @ 411 and 502
Tercenistas
913
2 Tercenistas @700 and 800
Mozos de Almacenes
1,500
2 Mozos @ 180
360


105
expanded throughout the colony so that labrados would become available
in even the most remote regions. The only impediment to the success of
/
the monopoly, Galvez concluded, was the continued existence of the private
shops. Their abolition would be to the "mutual benefit of the public
and the Renta.
Although no formal program had been devised to abolish the shops,
some attention had been given to reducing their numbers before Bucareli's
/
visit to the factory. In October, 1765 Galvez had commissioned, contador
Mathias de Armona to prepare a register of all the private shops in Mexico
41 '
City. Armona counted over 500. Galvez declared that Espinosa and Frago
had suppressed Armona's report and had spread the rumor that over 3,000
tobacco shops operated in Mexico City. The visitor general also informed
Bucareli that the directors had continued to license private shops, thereby
delaying the progress of the monopoly by increasing the number of shops
42
and the burden of eliminating them.

Despite Galvez assertions, a detailed account of 1768 indicated a
decline in the number of tobacco shops in Mexico City, from 543 to 441
between 1765 and 1768. The report also provided data on the tobacco shops
in other parts of the viceroyalty. Excluding the factorias of Puebla and
43 44
Durgango, the report listed 3,275 shops, distributed as follows:
Administration General of Mexico
Mexico City 441
Outside Areas 1,128
Factora of Valladolid
Valladolid (City) 192
Outside Areas 827
Factoria of Guadalajara
Guadalajara (City) 176
Outside Areas 483
1,569
1,019
659


225
118. Vega to Branciforte, January 22, 1798, AGN, Ramo, vol. 149,
exp. 7, fols, 83-102,
119. Borbon to Branciforte, January 25, 1798, AGN, Ramo, vol. 149,
expl 7, fols. 105v-107; Alva to Branciforte, February 19, 1798, AGN, Ramo,
vol, 149, exp. 7, fols, 107v-113; Junta Superior de Real Hacienda to
Branciforte, February 27, 1798, AGN, Ramo, vol, 149, exp, 7, fols. 114-115.
120. Branciforte decree, March 8, 1798, AGN, Ramo, vol. 149, exp. 4,
fols. 15v-16.
121. Vega to Maniau, March 29, 1798, AGN, Ramo, vol. 149, exp. 4,
fols, 16-18. The idea of establishing a factory in Guadalupe was not a new
one. In 1783 the ecclesiastical cabildo of Guadalupe petitioned the King
to transfer the Mexico City factory to the Villa to assist in the enlarge
ment of the town there. The directors rejected the request because of
various logistical problems they foresaw from such a move. See Abad y
Capitulares de . Guadalupe to the King, 1783, AGN, Renta, vol. 55, fols
262-263; Royal order, November 12, 1783, AGN, Ramo, vol. 179, exp. 10, fols
1-lv; Hierro and Riva to Viceroy Mathias de Galvez, May 14, 1784, AGN,
Ramo, vol. 179, exp. 10, fols. 2-llv. The cabildo petitioned again on
February 9, 1787, arguing that the Villa would provide an improved moral
climate for the workers and that the Renta would save costs in Guadalupe.
Again, the Crown rejected the petition. Delfina E. Lopez Sarrelangue,
Una villa mexicana en el siglo XVIII (Mexico, 1957), pp. 116-117.
122. Maniau to Vega, December 7, 1798, AGN, Ramo, vol. 149, exp. 4,
fols. 23-25v; Maniau to Vega, December 7, 1798, AGN, Ramo, vol. 149, exp.
6, fols. l-3v.
123. Maniau to Vega, December 7, 1798, AGN, Ramo, vol. 149, exp. 6,
fols. 4v-6v. '
124. Maniau to Vega, December 7, 1798, AGN, Ramo, vol. 149, exp. 6,
fols. 7-12.
125. Vega to Puchet, December 10, 1798, AGN, Ramo, vol. 149, exp. 6,
fols. 13-14.
126. Puchet to Vega, January 21, 1799, AGN, Ramo, vol. 149, exp. 4,
fols. 33-35. Puchet wanted 7 offices, with 700 to 800 workers doing 500
tareas each day.
127. Puchet to Vega, February 23, 1799, AGN, Ramo, vol. 149, exp.
6, fols. 30-40, 51.
128. Vega to Miguel Jose de Azanza, March 31, 1799, AGN, Ramo,
vol. 149, exp. 4, fols. 35v-43v. Vega also advised opening a school
in the Guadalupe factory, to prevent the women from having to leave their
daughters at home.
129. Azanza to Vega, April 18, 1799, AGN, Ramo, vol. 149, exp. 1,
fol. 16. Azanza ordered the employment of only women or of men of accre
dited conduct.


181
restored tobacco shops would once again defraud the consumers and the Renta
39
were very great,
The Manifesto also accused the Consulado of exaggerating the threat
presented by the workers. The demonstration of 1780 was the only incident
in nineteen years and had been the work of only twenty-five or thirty
malcontents, In general, the workers were cooperative, characterized more
by their docility and obedience than by hostility. Abolishing the
factories would cause more trouble than ever before, because the workers
would be deprived of their means of livelihood. Unemployment, in turn,
would lead to vagrancy and crime. In Mexico they earned a regular wage
and received the benefits of the Concordia. They would not be prepared
40
to risk the uncertainty of the Provincias Internas.
The strongest argument in favor of manufacturing, the Manifesto
declared, was the fact that the factory was earning substantial profits.
Selling rama only, at 12 reales per libra rather than 10, the Manifesto
calculated an annual loss of 30,829 pesos, without considering the
undeterminable effects of increased contraband.^ Juxtaposed against
the probable loss were the figures for the profits earned by the Mexico
City factory each year, to prove its point, the Manifesto presented the
accounts of factory costs, production and profits from 1769 to 1787
/ O
shown in Table 11 (Appendix).
Perhaps in response to the Consulado's report, the Crown on January
4, 1789 ordered the viceroy to prepare a statement on the feasibility
/ Q
of abolishing manufacturing without damaging royal income. Revilla-
gigedo concluded that the monopoly could be neither altered nor abolished
44
without causing a decline in revenues and serious unemployment. Aware
that the monopoly expended large sums for administration, labor and res
guardo, the viceroy could advise no superior system for procuring the


202
Although Maniau had prepared materials on each of the new factories
and on the enlargement of the one at Queretaro, he advised Vega that recent
events had caused him to change his mind about the subdivision. Because of
the paper shortage, the Mexico City factory had been gradually reducing
the number of workers with layoffs and expulsion of those absent for over
eight days. From a total of 8,976 in September, 1797, the number of workers
had declined to 5,007 by the end of October, 1798, a decrease of 3,969.
Of the total 5,007 workers, 4,350 were operarios, including 2,640 women
123
and 1,710 men. Since the number of men remaining in the factory was
so small, Maniau suggested that the subdivision was no longer necessary.
The total could be reduced even further by continuing to apply the expul
sion policy. Many of the 3,969 workers laid off since 1797 were either
working elsewhere or dead. The others could be sent to Queretaro or to
Guadalajara by enlarging the factories there. Maniau drew up a new plan
for continuing with the existing six factories. They would have to pro
duce 113,000,000 caxillas of cigarros each year, with 51,000,000 coming
from Mexico City. The presence of only 1,170 males in the Mexico City
124-
factory would comply with the royal order of 1795.
Vega responded by consulting the factory administrator, Miguel Puchet,
125
on Maniau's proposal. Puchet, who was already working on plans for the
126
Guadalupe factory, disapproved of Maniau's new recommendations. He
calculated significant savings from the establishment of the new factories,
and lower costs than those to be borne in Maniau's proposal to enlarge
/
Queretaro and Guadalajara. Also, he advised Hierro that the operarios
currently employed in Mexico would be insufficient to produce the 51,000,000
caxillas needed at the moment, and expanded production was to be expected
once the paper shortage alleviated. The Mexico City factory would require


CHAPTER FIVE
THE MANUFACTURING SECTORY:
THE MEXICO CITY FACTORY
The manufacturing sector of the tobacco monopoly was organized between
1769 and 1777. During this period the Renta completed the task of abolish
ing all tobacco shops in the colony and brought four factories into
production, in Oaxaca, Orizaba, Puebla and Mexico City. The factories
of Guadalajara and Queretaro were added in 1779. The elimination of the
private shops and the establishment of the factories was part of a dual
process through which the monopoly gained complete control of all pro
duction of labrados in New Spain. Renta officials often referred to this
change as "perfecting" the monopoly.
The creation of the factory system involved the transferral of the
tobacco industry from private to state control, a process which required
the relocation of both tobacco shop owners and workers. To avoid massive
unemployment and possible social turmoil, the monopoly made a concerted
effort to assure that all owners and workers would be employed in either
the estanquillos or the factories.
The factory in Mexico City was by far the largest, usually producing
about two-thirds of all labrados. Located in the population and admini
strative center of the viceroyalty, it was the focal point of all decision
making concerning the manufacturing sector. This chapter examines the
organization and operation of the factory system in the capital city.
It covers the years from 1769 to 1777, the period in which the monopoly
completely developed the Mexico City factory.
141


195
99
couraged the current attacks on manufacturing by the monopoly. The
principal value of the factories was as a source of employment for the
"ociosos" of the cities. To reduce fears of riots, the monopoly could
divide the factory of Mexico City into two or three smaller establishments,
employing about 3,000 workers in each. Two could be placed on the edges
of the city where the poor lived, and the third could be set up to employ
only women, with separate places for Spanish women disgusted by the pros
pect of working among the castas and Indians, Employing Spanish women,
he added, would solve some of the economic problems of certain distinguished
families whose women had been sacrificed to "prostitution and shame.
By creating three factories in the city, Valero emphasized, the monopoly
would be complying with the real purpose of the 1795 royal order, which
.. 101
was to disperse the workers, not to reduce revenues.
The negative responses to Vega's proposal revealed the fundamental
unwillingness of persons outside the monopoly, and at least one person
within the monopoly, to tamper with a successful revenue-producing system.
Branciforte was indecisive on the matter because, like his predecessor,
he saw no means to avoid a loss in revenues, despite Vega's optimistic
102
assertions to the contrary. By 1797, however, Branciforte had accepted
a plan for reducing the size of the Mexico City factory without damaging
the real hacienda: disperse the workers into new, smaller factories. To
eliminate the large gatherings of workers in one location, Branciforte
proposed subdividing the Mexico City factory among the principal cities
of the factorias, so each factoria could supply its own jurisdiction.
Subdivision would allow the monopoly to continue to employ all its workers,
create new jobs in the areas outside Mexico City, reduce numbers in Mexico
103
City and maintain revenues at current levels.


214
of the cities, To some officers, such as Vega and Puchet, the workers were
lazy, useless parasites opportunistically using the factory to earn an easy
living without effort and thereby reducing the supply of labor for other
sectors of the economy. To others, such as Valero, the real hacienda
officials and the author of the 1788 Manifesto, the workers needed the
factories precisely because they were shiftless, unskilled and prone to
drunkenness and licentiousness. The factories, by providing employment,
served to uplift and discipline the workers. The former, or hard-line
officials, generally expressed a greater willingness to make drastic altera
tions in the manufacturing system. The Consulado wanted to send the workers
to the Provincias Internas. Vega, before being presented with the subdivi
sion idea, was prepared to abolish most of the factories. Once plans were
being prepared for subdivision, the hard-line officials continued to advo
cate extensive adjustments, notably in proposing to relocate thousands of
Mexico City workers to the smaller cities of the provinces, Minimizing
the difficulties of such wholesale migrations, they were willing to uproot
a substantial proportion of Mexico City's population.
The officials who favored the factories refused to adopt such a glib
attitude. Partly influenced by fear of social unrest, they regarded re
location as virtually impossible because of the workers' attachment to
the city and to the security of regular wages and benefits, such as the
Concordia. Relocation, they argued, would seriously disrupt the economies
and societies of the provincial cities. Even when they had accepted the
plausibility of subdivision, they continued to resist large-scale changes
because of potential dangers. Large concentrations of workers, even 600
or 800, in the smaller cities would be a threat to the social peace of
areas without the well-developed judicial, military and police services
of Mexico City.


63
the situation and to make payments for tobacco already collected or
recently harvested. Using drafts provided by agents of the Gremios Mayores

de Madrid who were present at the Jalapa fair, Galvez paid out 588,747
pesos for the tobacco. He noted, however, that the sum paid for the harvest,
over 400,000 pesos, was actually 22,474 pesos less than the price agreed
to in the contracts. The planters protested this action and, although
they gained the support of the fiscal, Velarde, and of the junta, Galvez
was able to convince Viceroy Croix to accept his position. Croix ordered
18
the planters to maintain "perpetual silence" on the matter.
Galvez' commission also authorized him to name a person to supervise
planting all year long and to negotiate contracts on behalf of the monopoly.
To carry out these duties, he appointed a personal friend, Francisco del
Real. Galvez regarded Real's appointment as an important step in the
development of the monopoly, describing him as not only "loyal" and "in-
19
corruptible" but also as "the principal axis" of the monopoly. Real
was awarded the title of Reconocedor General de Tabacos, or Inspector
General of the Tobacco Monopoly. His duties are best understood by re
ferring to his own assessment of his job as he reported it to Galvez in
1771. The report also serves as a general outline of growing procedures.
In early May of each year, Real ordered the planters to prepare their
land for seeding. From August through September the plants would be trans
planted in accordance with the register of all planters which assigned the
number of matas each could plant. The registers were prepared in late
June, and assignments were based on the capacity of each planter in rela
tion to the number of tercios the directors wished to harvest. Real noted
the importance of this procedure because the Renta had to coordinate
planting to assure an adequate supply of tobacco for the consumers.


40
efforts to establish a tobacco factory there, Cruillas, who had already
clashed with Galvez over other matters, supported Espinosa's contention
53
in letters to Arriaga and Esquilache. In December, Espinosa ordered
the abolition of tobacco manufacture by the Renta in Puebla and a return
to private production only. Apparently, he was concerned with threats of
serious social turmoil reflected in the appearance of posters with such
statements as "Death to the King of Spain," "Death to Spain," and "Long
Live the English." There were also threats to burn monopoly offices.
In addition, Espinosa ordered suspension of Renta manufacturing in Vera
cruz, Guadalajara and Jalapa.A junta of December 17 considered a pe
tition from the cigarreros of Mexico City. Indicating their fears that
a factory would be established in Mexico City, they were assured by Espin
osa that they would be heard before any such action were taken.55 The
junta also decided to request a report from the Bishop of Puebla on the
56 /
desireability of manufacturing by the Renta in Puebla. Galvez rejected
Espinosa's arguments out of hand, declaring that the public disorder in
Puebla was caused by opposition to the taking of censuses for raising
militia.^
Galvez' return to Mexico City in late January, 1766, weakened oppo
sition from the junta, and he was able to promote his plan to manufacture
puros and cigarros on monopoly account. Espinosa continued to oppose the
idea, as he had since Galvez purchased the paper in Jalapa, despite the
CO
visitor's insistence that it was in conformity with royal instructions.
Espinosa feared that Galvez' proposal was only the beginning of a long-
59
term effort to abolish all private tobacco shops in the viceroyalty.
The junta yielded to Galvez' wishes and the agreement was published in the
bando of March 17, 1766. Repeating the order of March 17, 1765, it de
clared that the Renta would manufacture labrados in the factoras. Only


194
as advising the workers of changes well beforehand, and with proper care
in administration of the factory, all dangers of demonstrations could be
avoided. The Tribunal concluded that the risk of losing royal revenues
was too great. To rectify the current situation, all that was needed was
improved discipline, better-quality labrados, less contraband and reduced
94
costs.
A third source of opposition to Vega's plan came from Miguel Valero,
contador of the Mexico City factory. Valero argued that abolishing the
factories "would open the door" to contraband both in and out of the tobacco
95 ,
shops. One of the chief sources of fraud, he warned, would be the utili
zation of granza and palos to make "legal" cigarros in the restored shops.
Currently, the factories produced 340,585 libras of palos, all of which
96
were burned to prevent its being used. Granza, of which 42,028 libras
were produced each year, was sold at one real per libra to the Indians for
97
chewing and to Europeans for smoking in pipes or for medicinal purposes.
The tobacco powder produced from the cernido process was flushed into the
canals. Valero explained that all three substances were normally used
by contrabandists in making illegal cigarros, and the restored shops would
do the same. Apart from damaging the quality of cigarros sold to the public,
the use of palos, granza and powder would reduce the monopoly's rama sales.
Overall, Valero calculated a 1,232,843-peso loss if the factories were
abolished, to which he added 1,500,000 pesos as the potential profits of
the monopoly if it were administered more efficiently. He believed the
monopoly to be capable of earning 4,500,000 to 5,000,000 pesos annually,
98
rather than the 3,515,000-peso average for 1789-1793.
Valero criticized the deceased director, Hierro, for his "disgust and
even obhorrence of the factories, and suggested that his attitude had en-


97
122.Espinosas report was dated April 24, 1770, AGN, Renta, vol. 8,
fols. 292-294v, and Hierro's was dated April 25, 1770, AGN, Renta, vol. 8,
fols, 294v-296,
123.Junta de Tabaco, April 26, 1770, AGN, Renta, vol. 8, fols.
296-297, According to Fonseca and Urrutia, vol. 2, 376, the Renta also
planted tobacco on its own account in Autlan and Tepic in the Bishopric
of Guadalajara. Despite the high yield of tobacco, planting in the area
was abolished by viceregal order of September 12, 1771,
124. Croix to Arriaga, April 30, 1770, AGN, CV, vol. 15, fol. 64.
125. Areche to Croix, June 16, 1770, AGN, Renta, vol. 8, fols.
305v-307v.
126.
311.
127.
128.
Galvez to Croix, June 26, 1770, AGN, Renta, vol. 8, fols. 307v-
/
Galvez, Informe, p, 53,
Galvez to Croix, June 26, 1770, AGN, Renta, vol. 8, fol. 310.
129,Croix to Hierro, Echeveste and Huarte, August 1, 1770, AGN,
Renta, vol. 47, fol, 360, and Croix to Espinosa and Frago, August 1, 1770,
AGN, Renta, vol, 8, fol, 361. Also, Arriaga to Bucareli, March 23, 1774,
AGN, Ramo, vol. 146, fols, 248-250.
130.Phelipe del Hierro, April 17, 1771, Estado del total consumo de
Tabacos, su valor entero, salarios, gastos y liquido que ha producido la
Renta del Tabaco en este Reyno de N.E. en el ano entero de 1770. . ,
BN, Tabacos, v. Nueva Espaa, Real Hacienda, 1785, vol. 1, ms. 19 (1332),
fols. 38-39v.
131. Silvestre Diaz de la Vega, April 20, 1785, Estado del total
consumo de tabacos, su valor entero, salarios, gastos y liquido que ha
producido la Renta del Tabaco en este Reyno de N.E. en el ano entero de
1784. , BN, Tabacos, v, Nueva Espaa, R.eal Hacienda, 1785, vol. 1,
ms. 19 (1332), fols. 400-401v.
132. Fonseca and Urrutia, vol. 2, 373.
133. Hierro and Huarte to Croix, December 17, 1766, AGN, Renta, vol.
33, fol. 41, noted the importance of the resguardo by referring to it as
the "key to the revenues" of the monopoly. Croix to Arriaga, September
26, 1766, AGN, CV, vol. 11, fols. 65-67, advised that Spain should not
expect the monopoly to produce revenues to the same extent as in the
peninsula because of the difficulty of effective resguardo in Mexico's
mountainous terrain.


189
usefully employed. The only disadvantage he mentioned concerning the hiring
of women in the factory was the resulting shortage of servants. He directed
his strongest attacks against the men. Work in the tobacco factories
was more appropriate for women, the director complained, but robust men
sought shelter in the factories from more demanding and useful occupations
in the trades, agriculture and the military. Lured by the promise of a
regular wage and the minimal effort required to learn to make cigarros,
fathers avoided apprenticing their sons, causing a chronic shortage of
artesans and the notoriously high prices of manufactured goods. Even more
sinister, Vega declared, was the dislocation effects of the factories.
Workers were in a state of "constant migration" between the factory cities,
and were abandoning their homes and families, "for no other reason than to
flee from justice or from their creditors, or to run away with women other
8 3
than their wives and with whom they lived illicitly."
Vega agreed that the employment of such a large number of workers
in the Mexico City factory 6,637 in 1795 posed a threat to public
security. Experience had proven them to be a "dangerous body" prone to
alborotos and "sedition." As evidence, Vega referred to the demonstrations
of 1780, 1782 and 1794. The 1782 alboroto had occurred on December 30
of that year, when the operarios were refused work because of the repeso,
or year-end inventory of rama. Gathering in gangs, the workers marched
to the home of the director, who refused to hear them, then to the viceregal
palace. Viceroy Mayorga, as a matter of prudence, elected to allow the
84
operarios to go to work. The three alborotos, Vega argued, strongly
suggested that the operarios would continue to use their large numbers
85
as an opportunity to cause disturbances.
Vega did not regard the relocation of the factory employees as an
obstacle to abolishing the factories. The maximum number of persons



PAGE 1

THE ROYAL TOBACCO MONOPOLY IN BOURBON MEXICO, 1764-1810 BY DAVID LORNE McWATTERS A DISSERTATION PRESENTED TO THE GRADUATE COUNCIL OF THE UNIVERSITY OF FLORIDA IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF DOCTOR OF PHILOSOPHY UT'^IVERSITY OF FLORIDA 1979

PAGE 2

Copyright 1979 by David Lorne McWatters

PAGE 3

Dedicated to my parents •^^^Mi.^>-
PAGE 4

ACKNOIJLEDGMENTS I am Indebted to many people for the successful completion of the dissertation. First and foremost, I must credit my parents with instilling a healthy respect for the importance of education and for always encouraging me to continue. They have enriched my life in ways too numerous to explain. Dr. Lyle N. McAlister guided me through the Ph.D. program and offered helpful advice on the writing and researching of the dissertation. I am particularly indebted to him for his warning to avoid the study of policy rather than reality, the oldest of the sins of Latin American historians. I owe a special thanks to Dr. Christen I. Archer, my M.A. supervisor at the University of Calgary. Dr. Archer introduced me to colonial history and suggested I explore the topic of the dissertation. I also wish to thank the members of my committee, Dr. William Woodruff. Dr. John Sommerville, Dr. Eldon Turner and Dr. George Winius, From Dr. Woodruff in particular I gained perspective on the broad movement of historical change and increased respect for cultural relativity. Dr. David Denslow and Dr. E. Ashby Hammond agreed to read the dissertation. Their help is greatly appreciated. Marjorie Summers did an excellent job of drawing the maps. I also wish to thank the Canada Council and the University of Florida for their all-important financial support for the doctoral program and dissertation research. I cannot adequately thank my wife, Linda Catherine Illingworth, for the support she has given me. Her assistance with editing and typing were invaluable, but most of all her unshakeable optimism was a constant source of encouragement. v

PAGE 5

CONTENTS ACKNOWLEDGMENTS iv ABSTRACT ,,,,... vi CHAPTER ONE SUBJECT, CONTEXT AND SOURCES 1 Notes 20 TT-JO THE PLANNING OF THE TOBACCO MONOPOLY 29 Notes 51 THREE THE GROWING SECTOR: LAS VILLAS 59 Notes 88 FOUR THE MANUFACTURING SECTOR: ABOLITION OF THE TOBACCO SHOPS 98 Notes 130 FIVE THE MANUFACTURING SECTOR: THE MEXICO CITY FACTORY ... 141 Notes 165 SIX THE MANUFACTURING SECTOR, 1780-1804: CONFLICT AND CHANGE 173 Notes 216 CONCLUSION 228 Notes 235 GLOSSARY 236 APPENDIX ..... 238 BIBLIOGRAPHY 278 BIOGRAPHICAL SKETCH 290

PAGE 6

ABSTRACT OF DISSERTATION PRESENTED TO THE GRADUATE COUNCIL OF THE UNIVERSITY' OF FLORIDA IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF DOCTOR OF PHILOSOPHY THE ROYAL TOBACCO MONOPOLY IN BOURBON MEXICO, 1764-1810 BY DAVID LORNE McWATTERS AUGUST 1979 Chairman: Lyle N. McAlister, Ph.D. Major Department: History The most extensive fiscal innovation of the Spanish Bourbons in New Spain was the creation of the royal tobacco monopoly. Its establishment was proclaimed by the viceroy on December 14, 1764, in compliance with a royal order of August 13, 1764. Within a few years the Crox-m created an elaborate bureaucratic organization to control the planting, manufacture and sale of all tobacco throughout the colony. The purpose of the monopoly was to produce revenues for the Spanish state and, judged in these terms, it was enormously successful. By the end of the eighteenth century the tobacco monopoly yielded revenues greater than any other single source. Between 1782 and 1809 revenues never fell below 3,000,000 pesos annually, reaching a high of 4,539,796 in 1789. Establishment of the monopoly involved the reorganization of the entire tobacco industry in New Spain. This included both the regulation of tobacco planting and the transfer of manufacture and sale of tobacco products from private to state ownership. Initially the monopoly took control vi .xt -'*.*„

PAGE 7

of only the growing and sale of leaf tobacco, leaving manufacture and sale of tobacco products in private hands. In 1765 the monopoly began to regulate all tobacco planting by requiring formal contracts with the planters and by limiting all growing to several areas in the modern-day state of Veracruz. Gradually, the Crown entered into competition with private tobacco shops by producing cigars and cigarettes in governmentadministered factories. The establishment of a large tobacco factory in Mexico City in 1769 was the key step in the development of a manufacturing sector. The opening of the factory accelerated the elimination of the private shops, as many owners and workers were drawn into factory employment. The remaining shops in Mexico City were abolished in 1775, and sale of cigars and cigarettes were permitted only from government-operated retail outlets. The dissertation examines the organization of the tobacco monopoly and traces its growth from 1764 to 1810. It is organized to reflect both the development and operation of the various sectors of the monopoly. From 1764 to 1768, progress was uneven, because of conflict among the principal officials responsible for its implementation. The part played by Joseph de Galvez, visitor-general from 1765 to 1771, was of particular importance to the monopoly in its earliest years. The growing sector from 1764 to 1781 is described, with attention given to the contract system, the determination of planting zones and the effects of a serious dispute within the administration over tobacco supplies. The dual process through which the monopoly organized the manufacturing sector in the 1770 's is analyzed by examining the creation of the monopoly retail shops and the establishment of the Mexico City factory. The study concludes with an assessment of vxx XWlliTBi t— I fi-: g^-HOK-'akt

PAGE 8

the social, economic, and political importance of the factory system and of the monopoly in general in late colonial Mexico, The central theme of the study is the emergence and operation of the manufacturing sector or, more precisely, of the system of factory production. Particular attention is given to the process by which the tobacco industry was transferred from private to state ownership and to the subsequent operation of the industry as a government enterprise. Because of the overriding importance of the factory in Mexico City, the monopoly tended to focus much of its attention on Mexico City and to assess progress and problems in relation to events in the capital, This study reflects that orientation by examining the organization and development of the manufacturing sector in Mexico City, Much of the economic data and most of the analysis of the socio-economic effects of the monopoly relate to the factory workers in Mexico City. The final chapter also offers some insights into the importance of the factories outside Mexico City. vxix

PAGE 9

CHAPTER ONE SUBJECT, CONTEXT AND SOURCES The most extensive fiscal innovation of the Spanish Bourbons in New Spain was the creation of a royal tobacco monopoly. Its establishment was proclaimed by the viceroy on December 14, 1764, in compliance with a royal order of August 13, 1764. Within a few years the Crown created an elaborate bureaucratic organization to control the growing, manufacture and sale of all tobacco throughout the colony. The purpose of the monopoly was to produce revenues for the Spanish state and, judged in these terms, it was enormously successful. By the end of the eighteenth century the tobacco monopoly yielded revenues greater than any other single source. Between 1782 and 1809 revenues never fell below 3,000,000 pesos annually and reached a high of 4,539,796 pesos in 1798. Establishment of the tobacco monopoly involved the reorganization of the entire tobacco industry in New Spain, including both the regulation of tobacco planting and the transfer of manufacture and sale of tobacco products from private to state ownership. Initially, the mono2 poly took control of only the growing and sale of leaf tobacco ( rama ) leaving manufacture and sale of tobacco products in private hands. Monopoly control of rama began in 1765 when the new tobacco monopoly, or Renta del Tabaco as it was called by its personnel, began to regulate all tobacco planting by requiring formal contracts with the planters ( cosecheros ) and by limiting all planting to several areas in the modernday state of Veracruz. Gradually, the Crown entered into competition 1

PAGE 10

with private tobacco shops (cigarrerias ) by producing cigars and cigarettes (puros and cigarros ) in government-administered factories. The establishment of a large tobacco factory in Mexico City in 1769 was the key step in the development of a manufacturing sector. The opening of the factory accelerated the elimination of the tobacco shops, because many owners and workers were drawn into factory employment. The remaining private shops in Mexico City were abolished in 1775 and sale of puros and cigarros was permitted only from government-operated retail outlets (estanquillos ) In its final form, the tobacco monopoly was a complex, bureaucratic organization. Modern-day economists would describe it as verticallyintegrated, since it controlled the tobacco industry in New Spain from planting through manufacture to retail sale in licensed shops. Also highlycentralized, it was administered from Mexico City by a corps of royal officials headed by a director general. The colony was divided into 3 fifteen administrative districts (see Figure 1) The largest and most populous was called the Administration General of Mexico and was administered from Mexico City. Ten of the remaining fourteen jurisdictions were referred to as factorias, not to be confused with the English "factories." The factorias. and the remaining four independent administrations ( administraciones sin agregacion) were governed from the major cities of the viceroyalty. Six factories, employing several thousands of workers and located in Mexico, Puebla, Oaxaca, Guadalajara, Queretaro and Orizaba, supplied tobacco to the entire kingdom, although a small quantity of snuff ( polvo) v/as imported from Havana. To protect against illegal planting, contraband and other forms of fraud, the monopoly created an extensive system of guards ( resguardo ) and inspectors, or "visitors" (visitadores)

PAGE 11

S 60 •H .-^c->--Mt'i--' ^1*'

PAGE 12

4 The purpose of this study is to describe the organization of the tobacco monopoly and to trace its development from 1764 until 1810, The central theme is the emergence and operation of the manufacturing sector of the monopoly or, more precisely, of the system of factory production. Particular attention is given to the process by which the tobacco industry was transferred from private to state ownership and to the subsequent operation of the industry as a government enterprise. To affect these changes, the monopoly was forced to eliminate all private shops in the colony and to relocate their owners and workers in monopoly estanquillos and factories. Because of the overriding importance of the factory in Mexico City, the monopoly tended to focus much of its attention on Mexico City and to assess the progress and problems of the Renta in relation to events in the capital. This study reflects that orientation by examining the organization and development of the manufacturing sector in Mexico City. Much of the economic data and most of the analysis of the socio-economic effects of the monopoly relate to the factory workers in Mexico City. Conditions in other parts of the colony, however, are not ignored, and Chapter Six in particular offers some insights into the importance of the factories outside Mexico City. Following introductory remarks on subject, context and sources, chapters are organized to reflect both the development and the operation of the various sectors of the monopoly. Chapter Two treats the first three years of the monopoly, from 1764 to 1768, a period of substantial conflict and uneven progress as officials in the colony attempted to define their responsibilities and to interpret royal orders. The part played by Joseph de Galvez visitor-general from 1765 to 1771, was of particular importance to the monopoly in its earliest years. The third chapter provides a description of the planting sector of the monopoly

PAGE 13

5 from 1764 to 1781, with attention given to the contract system, the determination of planting zones and the effects of a serious dispute within the administration over tobacco supplies. Chapters Four and Five examine two simultaneous processes through which the monopoly organized the manufacturing sector in the 1770' s. They offer a detailed analysis of both the creation of the estanquillos and the establishment and operation of the factory in Mexico City, including such aspects as labor, labor conditions and wages. Chapter Six assesses the social and economic importance of the monopoly by tracing the debate over the factory system which troubled the monopoly in the 1780 's and especially in the 1790 's. The decision to establish the tobacco monopoly in New Spain grew out of changes in economic policy and practice in Spain. The War of the Spanish Succession (1702-1713) and the arrival of Philip V (1701-1746) grandson of Louis XIV, represented a "watershed" in Spanish history because they marked the beginning of the transition from the Hapsburg "decline" 4 of the seventeenth century to the Bourbon "reform" of the eighteenth. Schooled at Versailles, and accompanied by a host of French advisors, the 5 new king launched a reform program which drew heavily upon French ideas. One of the principal features of French influence was its encouragement of the centralizing impulse which characterized the reign of Louis XIV in France, Spurred by Louis' successful example, the Bourbon monarchy implemented a series of changes in government, economy and religion designed to reduce the autonomy and privileges of all independent institutions, corporations or groups while enhancing the authority of the Crown. At the same time, the Spanish monarchy adopted a more activist role in the management of Spanish society, introducing new institutions and officials, such as the Intendants, to improve the efficiency and influence of

PAGE 14

government at all levels. Spaniards would receive not only more government, but also improved government. The immediate impetus to fiscal reform, first in Spain and later in the colonies, derived from two major influences: "Colbertian mercantilism" and war. The precise relationship between Colbert's ideas and Spanish practice has not been well-established, despite frequent references to Colbert's influence on important Spanish intellectuals such as Geronimo de Uztariz and Jose Campillo y Cosio. Yet mercantilism has become a useful "umbrella" term for historians to categorize the organization and rationale of the pre-industrial economies of the sixteenth through the eighteenth centuries. In practice, mercantilism was characterized by the intervention of the developing nation-states in economic life. More precisely, centralizing states proposed to reorganize the medieval economy based on overlapping municipal, religious, corporate and royal authorities by enhancing royal power. From the point of view of the Crown, medieval organization fragmented economic life by enforcing special privileges and exemptions and encouraging competition for special jurisdictions. A national economy required the subordination of autonomous economic power by concentrating it in the hands of the central government or its Q representatives. In many countries, and especially in Spain, faith in a market allocation of economic resources was not part of popular economic wisdom. Adam Smith was a product of the British empire, not of the Spanish. As William P. Glade explains, government "... became for all intents and purposes the agent responsible for the entire state of society and the chief source of economic initiative." The consequences of this activist and centralist approach to fiscal policy was a trend toward direct administration of government, that is royal, revenues. Rather than leasing the collection of revenues to tax '" 'a;.^ C-Ti,i..C'i^iai*g%^rgrtd'fc*3g—'.liii tUV^i^**^-. laJk>.~Uaiau
PAGE 15

7 farmers or corporations (municipalities, guilds), the Crown created a new financial bureaucracy of royal officials to operate the tax system. Good government was considered to be one which exercised greater control over the lives of its citizens. In Spain, direct administration was stimulated early in the eighteenth century by Philip V's French advisor, Jean Orry, through his reorganization of the fiscal system, and was greatly advanced later in the century by the Marques de Ensenada, Secretary of 12 Finance, War, Marine and the Indies (1746-1754). The second major impetus to fiscal reform was war and the resulting demand for increased revenues. So great was the Crown's need for additional funds, states one author, that "... for the Spanish government 13 the eighteenth century was one long fiscal crisis." The source of Spain's anxiety was the growing military power of her chief rival, England, both in Europe and in the New World. The extent of their competition is illustrated by the fact that in the 107 year period from 1702 to 1808, 14 Spain and England were at war for all or part of 47 years. The economic effects of almost continuous warfare, especially after 1763, have been examined by various writers. In Spain, the result was a series of financial manipulations; in the colonies it was an energetic pursuit of more revenues The reform movement accelerated in Spain during the reign of Charles III (1759-1788) and, for the first time, was extended on a large scale to the colonies. Historians agree that the stimulus to reform in the 1 f\ New World was Spain's loss of Havana to England in 1762. This defeat, it is stated, was "provocative and sobering," leading to a "national 18 reappraisal" of the colonial situation. The result was a "comprehensive 19 20 overhaul," a "defensive modernization" to forestall the obvious threat presented to the colonies by England.

PAGE 16

8 The reform program launched after 1763 was so comprehensive that it has been dubbed by D.A. Brading as the Bourbon "reconquest" of New Spain. In the name of "fiscal and strategic necessity," he asserts, the Crown attacked all the major bases of independent power in New Spain. In just a few years it implemented fiscal reform, restricted the authority 22 of the Church, expelled the Jesuits, reorganized the commercial system, reformed the military and introduced the intendants. As in Spain, fiscal reform in New Spain involved a general effort to eliminate leasing of revenues and to place collection and administration directly into the hands of royal officials. The program was initiated by Joseph de Galvez, who arrived in 1765 as visitor-general (1765-1771).^^ Among the fiscal reforms he introduced were direct administration of the monopolies of tobacco (1765) and playing cards (1768) and of the impor27 tant sales tax ( alcabalas ) Gunpowder and salt were other state monopolies administered by royal officials; snow, cockfighting and leather 28 were leased monopolies. The purpose of these innovations was to increase revenues by improving the administration of tax collection. As John Lynch explains: From the 1750 's greater efforts were made to increase imperial revenue. Two devices were particularly favoured: the extension of a state tobacco monopoly and the direct administration of the alcabala (sales tax), previously farmed out to private contractors. Brading echoes this statement: The principal innovation introduced by the Bourbons consisted in the establishment of Crown monopolies in tobacco, playing cards and gunpowder and in the utilization of salaried officials to administer these monopolies and to collect excise duties. The culmination of this movement was the introduction of the intendant 31 system in 1786. The branch of government responsible for deriving revenues from the colonies was the real hacienda Bernard Bobb cautions that the real

PAGE 17

hacienda not be regarded merely as a treasury, and offers instead the 32 expression "royal estate" to broaden its definition. In explaining the Spanish conception of the real hacienda as applied to the colonies, Herbert Priestly stresses its all-encompassing character: Real hacienda, then meant more than "treasury" or "exchequer"; it included all the royal possessions (haber) ; it touched every phase of private as well as public life; even religion itself was utilized to bring coin into the royal coffers. Real hacienda was the organic institutional expression of the raison d'etre of the Spanish colonial world. The real hacienda was made up of four major accounting divisions. The first, masa comun comprised 36 branches ( ramos ) including several of the more valuable sources of income such as silver and gold duties, alcabalas. Import and export duties and tribute. Revenues from masa comun were expended on the ordinary or regular costs of government in New Spain as well as on the subsidies ( situados) to the non-profitable colonies administered from New Spain, such as Cuba, Florida, Louisiana, Puerto Rico and the Phillipines. The second category, particulares included funds from such sources as tithes, fines and papal indulgences. As the name implies, these revenues were employed for specific purposes. The third division, agenos were funds not actually part of the royal patrimony, but disbursed by royal officials. Pension funds, for example, were part of agenos. The fourth category was referred to as estancos especiales or simply remisibles. These were revenues received from the royal monopolies of tobacco, playing cards and mercury. They were deposited in a separate treasury and remitted directly to Spain without being used to cover ordinary expenses. Regardless of the long-term consequences of the Bourbon reforms, the fiscal reforms instituted during and after Galvez visitation were enormously successful. By 1800 New Spain was paying not only the regular costs of government in the colony but also those of several other colonies. .*,;— CM>.U^.jLgtW'Jfy-^'J,.l.>i>.iM*|— I h>-*'— If ^

PAGE 18

10 35 as well as sending about 6,000,000 pesos to Spain each year. Alexander de Humboldt indicates that New Spain supplied about three-quarters of the 8,000,000 pesos sent from the American colonies to Spain each year. Studies of tobacco monopolies in Europe and in the other Spanish colonies provide a useful background to the monopoly in New Spain. The tobacco monopoly in Spain has been neglected almost entirely by researchers. Major works of economic history, such as those by M. Colmeiro, Jaime Carrera Pujal and Jaime Vicens Vives have almost nothing to say on the 37 subject; neither do the more general works by Antonio Ballesteros, Modesto Lafuente, Richard Herr, Jean Sarrailh, Henry Kamen or Antonio 38 Dominguez Ortiz. Available data reveals considerable confusion about the origin of the Spanish tobacco monopoly. The most commonly-cited date 39 for its establishment is 1636. John Lynch, however, suggests that Spain attempted to create the monopoly in 1621, but failed, while Antonio Domxnguez Ortiz refers to the leasing of five contracts of the estanco de tabaco from 1634 to 1563 and to the receipt of revenues from the "rents" from 1621 to 1640. Jose Perez Vidal cites a royal order of April 9, 1701 establishing the tobacco monopoly under direct administration rather than lease, with rigorous penalties against fraud. General Instructions for the monopoly, he states, were issued in 1740 and repeated 42 in 1767 and 1788. Henry Kamen reports that in 1711 Bartolome de Flon y 43 Morales purchased the tobacco farm by advancing money to the state. John P. Harrison argues that the tobacco monopoly was leased until 1702, when it was abolished for a time, again leased, and finally put under direct royal administration in 1740. Modesto Lafuente agrees that the 45 monopoly was placed under direct administration in 1740, which seems to indicate that by 1740, at least, the tobacco monopoly in Spain was securely 46 in the hands of the government.

PAGE 19

11 The monopolies in the Spanish colonies other than New Spain have been the subject of some research. Although the monopoly in Cuba dates from 1717, the idea of establishing monopolies in all the colonies appears to have originated with the Marques de Ensenada, Secretary of Finance, War, Marine and the Indies under Ferdinand VI (1746-1759), perhaps because of his success with the institution in Spain. '^^ According to Agnes Stapff Ensenada considered the Spanish tobacco monopoly to be "the most precious jewel" of the monarchy. If extended to the colonies, he expected royal revenues from the Americas to double. In Cuba, purchases of tobacco for sale by the state began in 1708 as part of a project initiated by Jean Orry.-^^ A formal monopoly was declared in 1717, followed by a violent resistance from the planters and even more violent repression by the government in 1717, 1720 and 1723. ^"'' After a period of leasing, the monopoly was turned over to the Royal Havana Company in 1740. In 1761 the Crown again formalized the monopoly, establishing restricted growing zones, setting prices and purchasing all 52 tobacco. The next colonial tobacco monopoly was established in Peru in 1752. Gulllermo Cespedes del Castillo, in an excellent article on the Peruvian monopoly, indicates that the state began leasing the collection of tobacco revenues as early as 1647; but not until 1745 did the viceroy receive the first royal order to create a monopoly. Initially, only the sale of rama was placed under the monopoly's jurisdiction, but in 1780 factories manufacturing puros and cigarros were opened in Lima and Trujillo. They were, however, abolished in 1791, leaving only rama under monopoly control. ^'^ The yield of the monopoly grew from 24,925 pesos (1752-1762 annual average) to 196,370 pesos in 1782 and reached 445,662 pesos in 1788.^^

PAGE 20

12 In 1753 Chile and La Plata were added to the Peruvian Jurisdiction. Agnes Stapf f reveals that the monopoly quickly became the "pillar" of the Chilean real hacienda. By 1788 It was producing over forty percent of all Chilean revenues, and by 1809 almost fifty percent, or a total of 388,012 pesos annually. La Plata, included within Peru's administration only until 1776, yielded from 9,000 to 20,000 pesos yearly until 1776. Herbert Klein offers a figure of 173,533 pesos as the average annual tobacco 58 monopoly profit for 1798 to 1802. The only major study of a colonial tobacco monopoly is Marco Antonio Fallas' La factoria de tabacos de Costa Rica which covers the period 1766 until 1813. The author's economic analysis is weak, since he chooses to focus on administrative development and problems. He notes, for example, the widespread resistance to the monopoly, as demonstrated by the extent of contraband and by the debate over abolition of the entire monopoly. Authority over the Costa Rican monopoly rested in the hands of officials in the Captaincy-general of Guatemala, where a tobacco monopoly was also 59 established in 1766. John P. Harrison and Luis Sierra both include the colonial monopoly as part of their studies on the tobacco industry in Colombia. According to Harrison, the monopoly was organized in 1778 along the same lines as in New Spain and was the major source of income in Colombia in the thirty years before independence. It was created strictly as a fiscal device to improve Crown revenues, but actually resulted in the economic destruction of certain regions. By 1805-1809 it was yielding a yearly average of 450,000 pesos. ^^ In Venezuela, the tobacco monopoly dates from 1779. Though not the subject of important articles or monographs, Eduardo Arcila Farias gave 64 it a chapter in his Economia colonial de Venezuela Organized with an

PAGE 21

13 eye to the export market, the Venezuelan monopoly produced revenues comparable to the combined income of those of Peru and Chile. By 1800 it yielded 825,344 pesos annually. The only comprehensive treatment of a tobacco monopoly anywhere is Jacob Price's superb France and the Chesapeake: A History of the French Tobacco Monopoly, 1674-1791 The French monopoly was created by Colbert as a source of revenues for ever-expanding war costs. France, Price asserts, followed the example of Spain and other countries in Europe in employing a state monopoly to provide revenues which could not be collected as duties or excise taxes. Many areas did not possess the administrative apparatus or legal power to impose such burdens, the result being a tendency to establish monopolies as a form of administering certain revenues. By the eighteenth century, all Europe except Britain, Ireland and the United Provinces used some type of tobacco monopoly. In France, the monopoly was not administered directly, as it was in Spain after 1740. Rather, it was leased to various individuals or companies and even abolished for a time. For most of its lifetime it was leased to the well-known United General Farms. Material on the tobacco monopoly in New Spain is available in various sources. The best information on the establishment of the monopoly and its development in the first few years of its existence is the report by visitor-general Joseph de Galvez (Marques de Sonora) to the new viceroy, Antonio Maria de Bucareli (1771-1779) Written in 1771 as Galvez was leaving the colony, it is entitled Informe general que en virtud de real orden instruyo y entrego el Exmo. Sr. Marques de Sonora siendo visitador general de este reyno al Exmo. Sr. Virrey Frey. D. Antonio Maria Bucareli y Ursua . The report actually treats the entire range of Galvez activities during the visitation. Its commentary on the tobacco monopoly

PAGE 22

14 is extremely useful because of Galvez important role in the early years of the monopoly. The most extensive contemporary source dealing with the monopoly is the Historia general de real hacienda completed in 1794 by Fabian de Fonseca and Carlos de Urrutia. Viceroy Conde de Revillagigedo (17891794) commissioned the authors in 1790 to prepare a study of the real hacienda in compliance with articles 109-115 of the Ordinance of Intendants (1786). It remained in manuscript form until 1845, when the Mexican government began publishing it in six volumes. The Historia general offers a detailed account of the history, current (1790) structure, and yield of all branches of the real hacienda in New Spain. The section on the tobacco monopoly deals with the period from 1764 to 1790 and includes a copy of the 1768 ordinances of the monopoly. A third contemporary account, less valuable but frequently utilized by historians, is Joaquin Maniau y Torquemada's Compendio de la historia de la real hacienda de Nueva Espana, escrito en el ano de 1794 '^'^ Maniau, who also assisted in the preparation of the Historia general was the head official (oficial mayor ) of the contaduria ^'^ of the tobacco monopoly, contador of the real hacienda pension fund ( monte pio de ministros) and the son of Francisco Maniau y Ortega, contador of the 72 tobacco monopoly. It is, however, merely a summary of the Historia general A fourth contemporary source is Revillagigedo 's Informe sobre las misiones, 1793, e Instruccion reservada al Marques de Branciforte, 1794 All viceroys prepared these reports to their succesors upon leaving office, and Revillagigedo 's is noted for being particularly thorough and thoughtful. Undoubtedly, the statistical data was drawn from materials prepared by Fonseca and Urrutia, Revillagigedo 's Instruccion treats a number of

PAGE 23

15 problems related to the tobacco monopoly, many of which arose during his term of office, A number of other contemporary sources are useful. The Gazetas de Mexico beginning in 1784, include commentary on such matters as factory production, imports, weather problems and paper supplies from Spain. Travellers accounts by Juan de Viera and Jose Gomez in 1777 discuss the presence of the tobacco monopoly in Mexico City. A brief critique of the monopoly is presented in the 1788 report by the Mexico City Consulado 76 to the King. Information may also be found in a report by Revillagigedo on the intendant system. The published Instrucciones reservadas of Viceroys Marques de Croix (1766-1771) and Miguel Jose de Azanza (1798-1800) 78 unfortunately have almost nothing to say on the subject. It is probably misleading to refer to Alexander de Humboldt's famous Political Essay on the Kingdom of New Spain (1811 ) as a contemporary source. Humboldt combined the observations of a traveller with statistical information collected in 1804, most of which had been prepared during 79 Revillagigedo s term of office. Despite the very limited information on the tobacco monopoly in the Political Essay the work has been a popular source among researchers. Humboldt's presentation of statistics and his general commentary on numerous features of New Spain are very useful in assisting historians to understand the atmosphere of late colonial Mexico. He was opposed to the tobacco monopoly, declaring abolition of the institution and of Indian tribute to be the two "most desireable" reforms 80 needed in the Mexican financial system. Among other nineteenth century sources treating the colonial tobacco monopoly is volume I of Lucas Alaman's Historia de Mexico Although his comments are brief, they are noteworthy for their sophisticated understanding of all aspects of the subject and for their accuracy. Alaman employed

PAGE 24

16 such sources as Revillaglgedo, Maniau, Galvez and Humboldt and included the useful document prepared in 1823 by the contador of the monopoly, Juan Antonio de Unzueta, entitled "Estado que manifiesta el valor entero, gastos y liquldo que produjo la renta del tabaco, desde 14 Febrero de 82 1765 en que fue establecida, hasta el de 1809." An anonjTHOus tract, entitled Resena historica de la renta del tabaco tomada desde la epoca del Exmo. Sr. Conde de Revillaglgedo (1850) offers a brief survey of the monopoly from about 1790 to 1850. Although it contains no footnotes, colonial statistics appear to have been drawn from Revillaglgedo s materials. Other relevant nineteenth century studies using primary sources include the works of Hubert H. Bancroft, Tadeo Ortiz de Ayala, Joel Poinsett and H.G. Ward. Jose Marxa Luis Mora, the famous liberal historian, offers nothing more than a tirade 85 against the evils of monopoly, without analysis or data. The first modern examination of the royal tobacco monopoly appeared in 1916 as part of an excellent study by Herbert I.Priestley, entitled Jose de Galvez, Visitor-General of New Spain, 1765-1771 Priestley bases his chapter on the monopoly on such sources as Galvez' Informe, Revillaglgedo 's Instruccion Maniau 's Compendio and various letters by Galvez to Spain, The latter correspondence provides a useful supplement to the Informe Curiously, he does not consider Fonseca and Urrutia's Historia general when writing about the monopoly. Rather, he cites the work in his chapter on real hacienda reforms. Several authors have written about the tobacco monopoly using archival sources such as Correspond encia de Virreyes, Reales Cedulas and Bandos in addition to printed documents. Brief but accurate comments are provided in the works of Clarence Haring, Jose" Maria Marroqui and Eduardo Arcila 87 Farias. Four volumes directed by Jose Antonio Calderon Quijano on New

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17 Spain during the reigns of Charles III (1759-1788) and Charles IV (17881808) offer considerable material drawn from records in the Archive Gen88 eral de Indias in Seville. These studies are a compilation of essays by various Spanish historians, and they provide by far the best single secondary source of information. The tobacco monopoly during the viceregency of Bucareli is treated in books by Bernard Bobb and Romulo Velasco Ceballos. Eduardo Baez Macxas includes a list of 133 cigarrerias operating in Mexico City in 1753, before the creation of the monopoly. ^"^ Historians have given little attention to the production of tobacco in Veracruz, despite the extensive system of contracts and the presence of a factory in Orizaba. For the most part, they have been content to present a few figures on tobacco planting or a few comments on the problem of contraband. The best sources are Manuel B. Trens, Historia de Veracruz and Luis Chavez Orozco and Enrique Florescano, Agricultura e industria textil de Veracruz, Siglo XIX ^ Additional comments can be found in the works of Joaquin Arroniz, Enrique Herrera Moreno, Ernesto Lemoine Villacana, Vicente Segura and Manuel Rivera Cambas.^^ A lack of systematic research on the economic history of EighteenthCentury Mexico limits our ability to understand the tobacco monopoly in the context of colonial economic history. Nevertheless, a few important works on the eighteenth-century economy should be mentioned. The best study of the organization of the real hacienda is Andres Lira Gonzalez' "Aspecto fiscal de la N.E. en la segunda mitad del siglo XVIII," a work which employs the Historia general of Fonseca and Urrutia.^"^ D.A. Brading, in Miners and Merchants in Bourbon Mexico, 1763-1810^ '^ offers a useful essay on the changes in government, including the real hacienda. Overviews of the colonial economy can be found in the works of Diego Lopez Rosado and Eduardo Arcila Farias, and economic data is also available in the more general studies of Lillian Fisher, Luis Chavez Orozco, Agustin

PAGE 26

18 95 Cue Canovas and Charles Cumberland, The best work to date on the eighteenth century economy, Enrique Florescano's Precios del Maxz y Crisis Agricolas en Mexico (1708-1810) examines the problems associated with 97 inflation in the late colonial period. Christon Archer's The Army in Bourbon Mexico, 1760-1810 provides useful social and economic data. The essential material for a study of the tobacco monopoly is located in Mexican archives, primarily in two documentary collections in the Archive General de la Nacion in Mexico City. The larger collection, called the Ramo de Tabaco is made up of 533 volumes (legajos) of completely unindexed documents. In sampling the Ramo it was not difficult to understand why historians have neglected the tobacco monopoly. The volumes are organized with no discernible attention to either chronological, thematic or geographical order. Although individual legajos often contain sections of related letters (expedientes ) the collection as a whole presented a formidable obstacle to research. With the assistance of a colleague, Eugene Weimers, I was able to prepare a general index to the 98 entire Ramo de Tabaco The documentation covers the years from roughly 1764 to 1856, although information on the period from about 1800 to 1821 is quite limited. To my knowledge, the only researchers who have worked with the Ramo de Tabaco are Maria Amparo Ros and Sonia Lombardo de Ruiz, both of the Seminario de Historia Urbana, Departamento de Investigaciones /• 99 Historicas, Institute de Antropologia e Historia (INAH) in Mexico City. The second, and smaller collection, the 75-volume Renta de Tabaco was the principal source for this study, mainly because of the readilyavailable data on the factory system. It was not until I located three of the legajos in the Biblioteca Nacional in Mexico City that I even became aware of the existence of this body of material. After discovering the remaining 72 volumes in the Archive General, I was again forced to prepare

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19 an index of the contents of the collection. I was unable to find any Indication then or since of historical research employing even a single volume from the Renta Unlike the ramo de tabaco the renta was organized with a rough chronological and thematic order. Most of the volumes are entitled "Varios expedientes correspondientes a la Renta del Tabaco de N.E.," or some variation of that title. These legajos treat all aspects of the monopoly, including planting in Veracruz, accounts, personnel, prices and contraband cases. The remaining material covers the guard system from 1790 to 1808, and the royal factories from 1765 to 1808. It is apparent that research on the tobacco monopoly in New Spain has not lagged because of inadequate documentation. Despite a certain amount of groundwork by researchers on monopolies in the other Spanish colonies, historians of New Spain for the most part have simply avoided working with the unpublished documentation, probably because it was unindexed. This study, for the first time, draws upon the enormous quantity of material available in the Ramo de Tabaco and Renta de Tabaco collections. In conducting my research for the dissertation, I determined that the most useful contribution I could make would be an overview of the organization and development of the monopoly up to the outbreak of the Hidalgo revolt in 1810. The study concentrates on the years from 1764 until 1780, the period during which the basic organization of the monopoly was developed. The volume of data makes a comprehensive overview of such a wide-ranging and complex institution impossible, and as is often the case, more questions are raised than answered. It is hoped, however, that the following analysis will provide an understanding of the characteristic features of the tobacco monopoly, of its development from 1765 to 1810 and of its importance to the colonial and metropolitan economies.

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20 NOTES sser1. Lucas Alaman, Historia de M exico (5 vols.: Mexico 1942") I 471-474. 2. Spanish words and phrases will be employed throughout the di tatlon. They will be underlined when first cited and, when possible, an English explanation or translation will be provided. The words will not be underlined in subsequent citations. 3. Figure 1 is compiled from the following sources: January 1, 1781, Relacion de los empleados que tiene la Renta del Tabaco, sueldos que gozan, importe de Tabacos, fletes de Mar de papel y de tierra, gastos ordinarios y extraordinarios de Administracion, sueldos manufactura y gastos de Fabricas, y otros que se pagaron en el ano entero de 1779. Archive General de la Nacio'n, Mexico (hereafter cited as AGN) Renta de Tabaco (hereafter cited as Renta), vol. 6, fols. 222-270vuelta (vuelta hereafter abbreviated as v) April 20, 1782, List of administrations of the Renta del Tabaco, AGN, Renta, vol. 3, fols. 182-185v. Peter Gerhard, A Guide to the Historical Geog raphy of New Spain (Cambridge, 1972). "^ ~ Philip Wayne Powell, Soldiers, Indians and Silver: the Northwestern Advance of New Spain, 1550-1600 (Berkeley, 1962). Joseph Antonio de Alzate y Ramirez, Nuevo mapa geographico de la America Septentrional perteneciente al virreynato de Mexico (1768) in Jorge Tamayo, Geografia General de Mexico (4 vols.; Mexico, 1962), 'l. 4. The famous seventeenth-century decline of Spain is discussed in J.H. Elliott, Imperial Spain, 1469-1716 (New York, 1963); J.H. Elliott, "The Decline of Spain," Past and Present vol. 20 (1961), 52-75; Earl J. Hamilton, War and Prices in Spain, 1651-1800 (Cambridge, 1947); Earl J. Hamilton, "The Decline of Spain," Economic History Review vol. 8 (1938), 168-179; Earl J. Hamilton, "Money and Economic Recovery in Spain Under the First Bourbon, 1701-1746," Journal of Modern History vol. 15 (1943), 192-206; Henry Kamen, The War of Succession in Spain, 1700-1715 (Bloomington, 1969); John Lynch, Spain Under the Hapsburgs, Vol. II: Spain and America, 1598-1700 (Oxford, 1969); Jaime Vicens Vives, An Economic History ^ ^P^^" (Princeton, 1969); Jaime Carrera Pujal, Historia de la economia espahola (2 vols.; Barcelona, 1943-1945). '~~ 5. Kamen, pp. 199-241, notes the importance especially of French ambassador Michel-Jean Amelot and financial advisors Jean Orry and Jean de Brouchovan. 6. It is not intended here to review the entire range of the reforms in Spain. The best overview of the eighteenth century in Spain is Richard Herr, The Eighteenth-Century Revolution in Spain (Princeton, 1958). On economic reform, see Vicens Vives, Economic History of Spain pp. 471-604.

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21 7. The works cited are Uztariz' Teorica y practica del comercio y de la marina (1724) and Campillo's Nuevo slstema de gobierno economico para la America (1740) Miguel Artola, "Campillo y las reformas de Carlos III," Revista de Indias vol. 12 (1952), 687, refers to the "extraordinary diffusion" of Colbert's though in Spain after Philip V's arrival; Herr, p. 4S states: "It was Colbert's mercantilism which first stirred Spanish economic thought to renewed activity in the eighteenth century." Earl J. Hamilton, "The Mercantilism of Geronimo de Uztariz," in Economics, Sociology and the Modern World, ed. by Norman E. Himes (Cambridge, 1935), p. 112, documents Colbert's influence on Uztariz. See also Vicens Vives, Economic History of Spain p. 526; Jose Munoz Perez, "Los proyectos sobre Espana e Indias en el siglo XVIII: el proyectismo como genero," Revista de estudios politicos vol. 81 (1955), 190; Eduardo Arcila Farias, Reformas economicas del siglo XVIII en Nueya Espana (2nd ed.; 2 vols.; Mexico, 1974), I, 9; Ricardo Levene, Investigaclones acerca de la historia economica del virreinato del Plata (2nd ed.; 2 vols.; Buenos Aires, 1952), I, 235-270. 8. Jan De Vries, Economy of Europe in an Age of Crisis, 1600-1750 (Cambridge, 1976), pp. 236-237. For a discussion of theories and practice of mercantilism see D.C. Coleman, ed.. Revisions in Mercantil ism (London, 1969). 9. William P. Glade, The Latin American Economies: A Study of their Institutional Evolution (New York, 1969), pp. 26-67. 10. Ibid ., p. 67. 11. Herbert I. Priestley, Jose" de Galvez Visitor General of New Spain (1765-1771) (Berkeley, 1916), p. 15. See also Alaman, I, 91-92. 12. Modesto Lafuente, Historia general de Espana, desde los tiempos primitivos hasta la muerte de Fernando VII (27 vols.; Barcelona, 1889), vol. 14, 46; Joseph Townsend, A Journey Through Spain in the Years 17861787 (2 vols.; Bath, 1814), I, 397. The Spanish fiscal system of the eighteenth century has not been the topic of much historical research. Major sources, such as Vicens Vives, Econo mic History of Spain were not helpful. 13. Robert J. Shafer, The Economic Societies in the Spanish World 1763-1821 (Syracuse, 1958), p. 7. 14. Spain and England were at war from 1702-1713, 1718-1720, 17271729, 1739-1748, 1762-1763, 1779-1783, 1796-1802 and 1804-1808. 15. Earl J. Hamilton, "Monetary Problems in Spain and Spanish America, 1751-1800," Journal of Economic History vol. 4 (1944), 21-48; Earl J. Hamilton, "War and Inflation in Spain, 1780-1800," Quarterly Journal of Economics vol. 59 (1944-1945), 36-77; Hamilton, War and Prices ; Herr, Revolution ; Vicens Vives, Econ omic History of Spain

PAGE 30

22 16. Christen I, Archer, Th e Army in Bourbon Mexico, 1760-1810 (Albuquerque, 1977); Lyle N. McAlister, The "Fuero Militar" in New Spain, 1764-1800 (Gainesville, 1957); Maria del Carmen Velazquez, El estado de guerra en Nueva Espana, 1760-1808 (Mexico, 1950); Richard Pares, War and Trade in the West Indies, 1739-1763 (London, 1963). 17. Stanley J. Stein and Barbara Stein, The Colonial Heritage of Latin America: Essays on Economic Development in Perspe ctive (New York, 1970), p. 97. 18. John Lynch, The Spanish American Revolutions, 18 08-1826 (New York, 1973), p, 5. ~~~ ~ 19. J.R. Fisher, Government and Society in Colonial Peru: The Intendant System, 1784-1814 (London, 1970), p. 1. 20. Stein, Colonial Heritage p. 88. 21. D.A. Brading, Miners and Merchants in Bourbon Mexico, 1763-1810 (London, 1971), p. 30. '. 22. N.M. Farris, Croxm and Clergy in Colonial Mexico, 1759-1821. The Crisis of Ecclesiastical Privilege (London, 1968). 23. Archer, Army in Bourbon Mexico 24. There is no major study of the intendant system in New Spain. For an overview of its operation in the New World, see Luis Navarro Garcia, Intendencias en Indias (Sevilla, 1959); for New Spain see Brading, Miners and Merchants pp. 33-92, and Brian Hamnett, Politics and Trade in Southern Mexico, 1750-1821 (Cambridge, 1971). For Peru, see J.R, Fisher, Govern ment and Society in Colonial Peru For Argentina, see John Lynch, Spanish Colonial Administration, 1782-1810: The Intendant System in the Viceroyalty of the Rio de la Plata (London, 1958). 25. The visita was a major inspection and reform in the colonies. The employment of the visita was called for in Jos^ Campillo's Nuevo sistema de govierno economico para la America (1740) Brading, Miners and Merchants p. 25 refers to Campillo's work as the "reformer's bible." See also J.R. Fisher, Government and Society in Colonial Peru p. 3; Mark A. Burkholder and D.S. Chandler, From Impotence to Authority: The Spanish Crown and the American Audiencias, 1687-1808 (Columbia, 1977), p. 84. 26. Marxa Angeles Cuello Martinell, "La Renta de los Naipes en Nueva Espana," Anuario de Estudios Americanos vol. 22 (1965), 245. 27. Brading, Miners and Merchants p. 29; Bernard Bobb, The Viceregency of Antonio Maria Bucareli in New Spain, 1771-1779 (Austin, 1962), p. 250 and Arcila Farias, Reformas economicas vol. 2, 170 indicate that the alcabala finally came under full direct administration on October 3, 1776; Robert S. Smith, "Sales Taxes in New Spain, 1575-1770," Hispanic American Historical Review, vol. 28 (1948), 36 notes the royal order of February 6, 1764 calling for direct administration of the alcabala as contracts expired. Galvez had the power to continue leases and he did so outside the major cities.

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23 28. Andres Lira Gonzalez, "Aspecto fiscal de la N.E. en la segunda mitad del siglo XVIII," Historla Mexicana vol, 17 (1968), 377. 29. Lynch, Spanish American Revolutions p. 11. 30. Brading, Miners and Merchants p. 29. 31. An explanation of the different techniques used to collect and administer Crown revenues can be found in Priestley, pp. 312-314 and in Guillermo Cespedes del Castillo, "Reorganizacion de la hacienda virreinal peruana en el siglo XVIIl,'^ Anuario de Historia de Derecho Espanol. vol. 23 (1953), 361. Administracion was direct administration by royal officials; arrendamiento was leasing to individuals; and encabezamiento was leasing to towns, guilds or other corporate entities. 32. Bobb, p. 205. 33. Priestley, p. 76. 34. Lira Gonzalez, 371-375; Manuel Yanez Ruiz, El problema fiscal en las d istintas etapas de nuestra organlz aclon politica (3 vols.Mexico 1958), vol. 1, 53-61. 35. Brading, Miners and Merchants p. 29. 36. Alexander von Humboldt, Political Essay on the Kingdom of New Spain, trans, by John Black (4 vols.; London, 1811), vol. 4, 240-242. 37. M. Colmeiro, Historia de la economia politica en Espana (2 vols.; Madrid, 1965); Carrera Pujal, Historia de la economia espanola ; Vicens Vives, Economic History of Spain 38. Antonio Ballesteros y Beretta, Historia de Espana y su influencia en la historia universal (12 vols.; Barcelona, 1958); Lafuente, Historia general de Espana; Herr, Revolution ; Jean Sarrailh, La EspaHa ilustrada en la segunda mitad d el siglo XVIII (Mexico, 1957); Kamen; Antonio Domfnguez Ortiz, La sociedad espanola en el siglo XVIII (Madrid, 1955). 39. Agnes Stapff, "La renta del tabaco en Chile de la epoca virreinal," Anuario de Estudios Americanos vol. 18 (1961), 2; Charles E. Kany, Life and Manners in Madrid, 1750-1800 (Berkeley, 1932), p. 225; Jacob M. Price, France and the Chesapeake: A History of the French Tobacco Monopoly, 16741791, and of its Relationship to the British and American Tobacco Trades (2 vols.; Ann Arbor, 1973), vol. 1, 17, offers 1636 as the date of the monopoly in Castile and Leon. 40. Lynch, Spain Under the Hapsburgs 195. 41. Antonio Domxnguez Ortiz, Politica y hacienda de Felipe IV (Madrid, I960), pp. 236, 337. 42. Jose Perez Vidal, Historia del cultivo del tabaco en Espana (Madrid, 1956), pp. 30-34. Ballesteros, vol. 9, 191 also gives 1701 as the date of the establishment of the monopoly.

PAGE 32

24 43. Kamen, p, 72. 44. John P. Harrison, "The Colombian Tobacco Industry from Government Monopoly to Free Trade, 1778-1876," Ph.D. Dissertation (University of California, 1951), pp. 64-65. 45. Lafuente, vol. 14, 46. 46. Although figures for the Spanish tobacco monopoly are sporadic, some indication of the growth of revenues from the monopoly in the eighteenth century can be given (figures are in reales) : 1702 6,861,679 1778 80,000,000 1713 14,223,432 1783 103,014,936 1722 14,778,030 1785 100,000,000 1750 69,000,000 1786 66,166,319 1768 66,866,319 1797 82,014,936 1774 68,960,885 1797 83,000,000 1775 63,469,108 Figures for 1702 and 1713 are from Kamen, pp. 208, 224; for 1722, 1768, 1774, 1778 and 1786 from Townsend, vol, 1, 408-409, 410; for 1750 and 1785 from Kany, p. 226; for 1775, 1783 and first 1797 from Ballesteros, vol. 9, 191; and for second 1797 from Vicens Vives, Economic History of Spain. p. 594. ^ ~ 47. Stapff, 3; Lafuente, vol. 14, 46 states that putting the monopoly under direct administration in 1740 led to immediate and significant increases in revenues. 48. Stapff, 3. 49. Lafuente, vol. 14, 46. 50. Heinrich Friedlander, Historia economica de Cuba (La Habana, 1944), pp. 63-72. ~~~ 51. For comments on the revolts of the vegueros (planters) and on the Cuban monopoly in general, see Jose Rivero Muniz, Tabaco: su historia g" ^^^^ (2 vols,; La Habana, 1964-1965); Philip Foner, A History of Cuba and its Relations with the United States (2 vols.; New York, 1962-1963); Julio Le Riverend, Economic History of Cuba (Havana, 1967); Fernando Ortiz, Cuban Counterpoint: Tobacco and Sugar (New York, 1947); Ramiro Guerra y Sanchez, ed. Historia de la nacion cubana (10 vols.; La Habana, 1952), vol. 3; Caspar Jorge Garcia Gallo, Biografia del tabaco Habano (La Habana, 1959). 52. Friedlander, p. 91. Tobacco monopoly administrations were established in Santo Domingo in 1763 and in Puerto Rico in 1785. For Santo Domingo, see Frank Moya Pons, Historia colonial de Santo Domingo (Santiago, 1974), pp. 308-309; for Puerto Rico, see Jesus Cambre Marino, "Puerto Rico bajo el reformismo ilustrado: despertar de la burguesia criolla," Revista de Historia de America vol. 73-74 (1972), 60, and Bibiano Torres Ramirez, La isla de Puerto Rico (1765-1800) (San Juan, 1968), p. 94.

PAGE 33

25 53. Guillermo Cespedes del Castillo, "La Renta de Tabaco en el Virreinato de Peru," Revlsta Historica vol. 21 (1954), 138-143. 54. Ibid ., 154, 158, 55. Ibid., 161. Manuel de Amat, Memoria de gobierno (1761-1776) (Sevilla, 1947), p. 573 provides figures for the first twenty years of the monopoly in Peru. See also J.R. Fisher, Governmen t and Society in Colonial Peru pp. 102-111, ~ 56. Stapff, 2; Cespedes del Castillo, "La Renta de Tabaco," 160-161 presents data on Chile until 1785 when the intendant system changed administrative organization. 57. Cespedes del Castillo, "La Renta de Tabaco," 160. 58. Herbert S. Klein, "Structure and Profitability of Royal Finance m the Viceroyalty of the Rio de la Plata in 1790," Hispanic Americ an Historical Review, vol. 53 (1973), 449; for comments on Argentina, see ^y^'^^' Spanish Colonial Administration and Levene; for brief comments on Paraguay, see Horacio William Bliss, Del virreinato a Rosas: ensayo de historia economica de Argentina, 1776-1829 (Tucuman, 1969), p. 75 and Julxo Cesar Chaves, Compendio de historia Paraguaya (Author, 1960), p. 103. 59. Marco Antonio Fallas, La factoria de tabacos de Costa Rica (San Jose, 1972); on^Guatemala see Valentin Solorzano Fernandez, Historia de la evolucion economica de Guatemala (Mexico, 1947). 60. Harrison, "Colombian Tobacco Industry"; Luis Sierra, El tabaco en la economia colombiano del siglo XIX (Bogota, 1971). 61. Harrison, "Colombian Tobacco Industry, "pp vii, 84. 62. Ibid pp. 21-26. 63. Luis Sierra, p. 34. 64. Eduardo Arcila Farias, Economia colonial de Venezuel a (Mexico, 1946) 65. Figures are from Harold A. Bierck, "Tobacco Marketing in Venezuela, 1798-1799: An Aspect of Spanish Mercantilist Revisionism," Business History Review, vol. 39 (1965), 492. Arcila Farias, Venezuela p. 332 shows a figure of 995,277 pesos for 1795; Federlco Brito Figueroa, La estructura economica de Venezuela colonial (Caracas, 1963), p. 234 shows 724,430 pesos for 1802. 66. Price, vol. 1, 21. 67. Price, vol. 1, xviii, 17 and vol. 2, 840. United General Farms leased the monopoly from 1680-1697 and from 1730 until its abolition in 1791.

PAGE 34

26 68. Informe general que en virtud de real orden instruyo y entrego el Exmo, Sr. Marques de Sonora siendo visitador general de este reyno al Exmo. Sr. Virrey Frey D. Antonio Bucarely y Ursua, con fecha de 31 de dlciembre de 1771 (Mexico, 1867). 69. Historia general de real hacienda, escrita por D. Fabian de Fonseca y D. Carlos de Urrutia, por orden del Virey, Conde de Revillagigedo (1794) (6 vols,; Mexico, 1845-1853), vol, 1, vi-vii. The viceroy also appointed Joaquin Maniau y Torquemada and Jose Ignacio Sierra to assist in preparation of the report, 70. Compendio de la historia de la real hacienda de Nueva Espana escrito en el ano de 1794 (Mexico, 1914). 71. The contaduria was the office of a fiscal official, the contador The contador was not strictly an accountant, because he also had administrative responsibilities, sometimes involving determination of policy, such as in the tobacco monopoly. 72. Priestley, p. 82, 73. Conde de Revillagigedo, Informe sobre las misiones, 1793, e Instruccion reservada al Marques de Branciforte, 1794 ed. by Jos^ Bravo Ugarte (Mexico, 1955). 74. Gazetas de Mexico. Compendio de noticias de Nueva Espana desde principios del ano de 1784 ed. by Manuel Antonio Valdes (16 vols.; Mexico, 1784-1809), 75. Juan de Viera, Compendiosa narracion de la ciudad de Mexico (1777) (Mexico, 1952); Jose Gomez, Diario curioso de Mexico (1777-1785) Vol. 8 of Documentos para la historia de Mexico (8 vols.; Mexico, 1854). 76. This report is entitled Cuadro de la situacion economica Novohispana en 1788 Vol. 2 of Documentos para la historia economica de Mexico ed. by Luis Chavez Orozco (13 vols.; Mexico, 1933-1936). 77 Dictamen del Virrey Revillagigedo sobre la ordenanza de intendentes de la Nueva Espana (1786) Vol. 4 of Documentos para la historia economica 78. Miguel Jose de Azanza, Instruccion reservada que dio el Virrey Don Miguel Jose de Azanza a su sucesor Don Felix Berenguer de Marquina prologo y notas de Ernesto de la Torre (Mexico, 1960); Marques de Croix, Instruccion del Virrey Marques de Croix que deja a su sucesor Antonio Marxa Bucareli prologo y notas de Norman F. Martin (Mexico, 1960). 79. Enrique Florescano and Isabel Gil, eds., Descripciones economicas generale s de Nueva Espana, 1784-1817 (Mexico, 1973), p. 128. 80. Humboldt, vol. 4, 211. 81. Previously cited.

PAGE 35

27 82. Alaman, vol. 1, 471-474, 83. Resena hlstorica de la renta del tabaco, tomada desde la epoca del Exmo. Sr. Conde de Revillagigedo (1850) (Mexico, 1850). 84. Hubert H. Bancroft, History of Mexico (6 vols.; San Francisco, 1883-1885), vol. 3; Tadeo Ortiz de Ayala, Resumen de la estadistica del Imperio Mexicano (1822) (Mexico, 1968); Joel R, Poinsett, Notas sobre Mexico (1822) (Mexico, 1950); H.G. X'Jard, Mexico in 1827 (2 vols.; London, 1828). 85. Jose Maria Luis Mora, Mexico y sus revoluciones (3 vols.; Mexico, 1950), vol. 1, 213-215. 86. Previously cited. 87. C.H. Haring, The Spanish Empire in America (New York, 1947); Jose Marxa Marroqui, La ciudad de Mexico (2nd ed.; 3 vols.; Mexico, 1969), vol. 2; Arcila Farias, Reformas economicas 88. Jose Antonio Calderon Quijano, Los virreyes de Nueva Espana en el reinado de Carlos III (2 vols.; Sevilla, 1967-1968) and Los virreyes de Nueva Espana en el reinado de Carlos IV (2 vols.; Sevilla, 1974). 89. Bobb previously cited. Romulo Velasco Ceballos, La administracio'n de D. Frey Antonio Maria de Bucareli y Ursua (2 vols.; Mexico, 1936). 90. Eduardo Baez Macias, "Pianos y censos de la ciudad de Mexico, 1753," Boletin del Archlvo General de la Nacion 2nd ser., vol. 7 (1966), 407-484 and vol. 7 (1967), 485-1156. 91. Manuel B. Trens Historia de Veracruz (6 vols.; Jalapa, 1948); Luis Chavez Orozco and Enrique Florescano, Agricultura e industria textil de Veracruz. Slglo XIX (Xalapa, 1965), 92. Joaquin Arroniz Ensayo de una historia de Orizaba (2 vols.; Mexico, 1959); Enrique Herrera Moreno, El canton de Cordoba: Apuntes de geografia, estadistica e historia (2 vols.; Mexico, 1959); Ernesto Lemoine Villacana, "Documentos y mapas para la geografia historica de Orizaba (1690-1800)," Boletin del Archivo General de la Nacion 2nd ser., vol. 3 (1962), 461-527; Vicente Segura, Apuntes para la estadistica del departamento de Orizaba (1826) (Jalapa, 1831); Manuel Rivera Cambas, Historia antigu a y mo derna de Jalapa y de sus revoluciones del estado de Veracruz (17 vols,; Mexico, 1959). 93. Previously cited. 94. Previously cited. 95. Diego Lopez Rosado, Ensayos sobre la historia economica de Mexico (Mexico, 1957); Curso de historia economica de Mexico (Mexico, 1963); Historia y pensamiento econdmico de Mexico: mineria, industria (Mexico, 1968) ; and Historia y pensamiento economico de Mexico: comunicaciones y

PAGE 36

28 transportes, relaciones de trabajo (Mexico, 1969). Arcila Farias, Reformas econ(5micas ; Lillian E. Fisher, The Background of the Revolution for Mexican Independence (Boston, 1934); Luis Chavez Orozco, Historia economica y social de Mexico (Mexico, 1938); Agustin Cue Canovas, Historia social y economica de Me'xico, 1521-1810 (Mexico, 1946); Charles C, Cumberland, Mexico: The Struggle for Modernity (London, 1968). 96. Enrique Florescano, Precios del maiz y crisis agricolas en Mexico (1708-1810) (Mexico, 1969). 97. Previously cited. 98. The Seminario de Historia Urbana, Departamento de Investigaciones Historicas, Instituto Nacional de Antropologia e Historia at the Castillo de Chapultepec and under the direction of Alexandra Moreno Toscano, has prepared an index of ninety of the 533 volumes. Since I was unable to obtain anything more than a list of the volumes indexed, I decided to include those ninety volumes in my own general index of the Ramo. 99. Maria Amparo Ros, "La real fabrica de tabaco: apuntes acerca de la organizacion del trabajo," Seminario de Historia Urbana, Investigaciones sobre la Historia de la Ciudad de Mexico, II (Mexico, 1976), pp. 97-103; Sonia Lombardo de Ruiz, La Ciudadela: Ideologia y estilo en la arquitectura del siglo XVIII (Mexico, 1976).

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CHAPTER TWO THE PLANNING OF THE TOBACCO MONOPOLY The first attempt by the Croxvm to establish a tobacco monopoly in New Spain came In 1747, two years after the royal order to organize one in Peru. The viceroy of New Spain, Conde de Revillagigedo the Elder, however, opposed the project because, he argued, planters and cigarmakers ( pureros) would not accept it. On July 23, 1761 the minister of the Indies, Julian de Arriaga, revived the project when he sent a royal order to Viceroy Marques de Cruillas (1760-1766) indicating that the Crown was modifying its approach to the creation of a monopoly. He noted, but did not specify, certain "obstacles" which had to be overcome in the colony. The new method was to order snuff from Havana and to sell it in a few stores in Mexico City on the account of the real hacienda. The explicit intention of the Crown was to undermine private snuff merchants by selling the product slightly below current prices. The competition would force them to gradually abandon their shops, leaving the King as the "only seller" of snuff. It was expected that this technique would "imperceptibly" conquer all resistance to a tobacco monopoly, although no mention was made at the time of monopolizing rama or of manufacturing puros and cigarros. Arriaga advised the viceroy that he had already arranged for delivery of snuff to New Spain and ordered him simply to 2 advise authorities in Havana which classes to send. The outbreak of war against England in 1762 delayed the execution of this order. On October 16, 1764, however, the snuff finally arrived 29

PAGE 38

30 xn Mexico City and Juan Jose de Echeveste was commissioned to oversee its sale. It was sold at twenty-five to thirty-three percent below current prices, depending upon its quality. The yield was relatively insignificant compared to the revenues the monopoly would produce in subsequent years. Snuff sales were absorbed into the monopoly at the end of Echeveste' s commission in March, 1765, at which time he delivered only 4,424 pesos to the director of the tobacco monopoly, Jacinto Diez de Espinosa, 3 who had arrived from Spain late in 1764. The actual decision to establish the tobacco monopoly in New Spain came in a royal order of August 13, 1764 and in an accompanying Instruccion of the same date. The order was a general statement advising the viceroy of the Crown's decision. The Instruccion outlined actual procedures to be followed. Both documents strongly emphasized that the purpose of the monopoly was to produce revenues to cover the increased costs of defending the Spanish Empire. Recent events, most notably the loss of Havana to England in the Seven Years War in 1762, had generated fears that the colonies were no longer secure against foreign invasion. In the ensuing debate in Spain, It was decided that military reform was essential in New 4 Spain to protect Veracruz against the same fate suffered by Havana. Because Spain was unable to pay the entire cost of defending the empire, the colonies had to share the burden. A secret defense committee drafted a plan for creating colonial armies in 1764, and in November of that year Lieutenant General Juan de Villalba y Angulo arrived in New Spain as comandante general and inspector general of the army to implement the reform program. The wording of both the royal order and the Instruccion of 1764 made abundantly clear the relationship between military reorganization and the monopoly. The "excessive costs" of raising regular and mxlxtia unxts xn the colonies, the Instruccion declared, made the

PAGE 39

31 imposition of some form of tax in the colonies absolutely imperative. Since "no Prince" was without a monopoly of tobacco, and since tobacco was a substance unnecessary to sustain human life, the creation of the monopoly was the best and least burdensome way of increasing revenues. No person was compelled to buy tobacco, the Instruccion noted, and the monopoly would not damage commerce in the colony because the tobacco industry was small and widely-distributed. The order advised the viceroy that only a director and a contador were being sent from Spain, to participate in preliminary planning. Both men were experienced in the monopoly in the peninsula, but were to follow the guidelines of the royal Instruccion for New Spain. Once the monopoly was in operation, a treasurer, two warehouse employees and three officials 6 to assist in the contaduria and treasury could be appointed in New Spain. Seventeen articles of the Instruccion outlined organizational procedures. Their provisions were to be implemented by a junta de tabaco made up of the viceroy as president and juez conservador of the monopoly; the visitor general; the senior criminal judge ( decano) of the audiencia; the alcalde del crimen of the audiencia, Sebastian Calvo; and the director of the monopoly. Only Calvo was mentioned by name. The junta was to meet to determine the actual feasability of the royal order and, if it were deemed workable, to decide upon the best method of complying with its provisions. The Crown urged the junta to be prompt but careful, in order to avoid provoking resistance. Fear of public disturbances was reflected in the authorization given the junta to forego any public announcement and to proceed cautiously. The Instruccion outlined both short and long term procedures for eliminating private growing, manufacture and sale of tobacco. From the outset, the Crown intended that the monopoly would be a large-scale,

PAGE 40

32 vertically-integrated economic institution. The junta was ordered to collect all rama, puros and cigarros from the merchants and the private shops. Sales of these products would be permitted only from governmentlicensed estanquillos. Prices were to be set by the junta, but only slightly higher than the current rate in order to avoid antagonizing consumers. The same was to be done for snuff, all of which was to be imported from Havana. As a temporary measure, private cigarro-makers (cigarreros ) could continue to produce puros and cigarros, known collectively as labrados by purchasing tobacco from the Renta. By examining previous methods used by the tobacco industry, the junta was to determine the number of 8 cigarros to be made by the cigarreros from each libra of rama, in order to prevent fraud against the monopoly and the public. Ultimately, however, all tobacco shops were to be abolished. "Little by little" the "excessive" number of shops was to be reduced, bringing the owners and workers into the Renta. Although the Instruccion did not specify the creation of factories, their establishment was implied by the abolition of the private shops. The planting of tobacco was restricted to certain areas in the modernday state of Veracruz. The King indicated that he had intended to abolish all planting in the colony, but his "royal clemency" inclined him to permit growing in the jurisdictions of Cordoba, Orizaba and Teusitlan. The viceroy ordered the junta to meet with representatives of the planters to determine the quantity and quality of tobacco and the prices the Renta would pay. Prices were to be set at a level which would assure profits to the planters in the growing and cultivation of tobacco, thereby encouraging them to improve techniques. All tobacco on hand was to be purchased and the junta was to guarantee an adequate supply for the 9 colony at all times.

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33 The first junta de tabaco met in Mexico City on December 11, 1764. Its members were Viceroy Cruillas, as president; Francisco Echavarri, as senior judge of the audiencia; Sebastian Calvo, as alcalde del crimen of the audiencia; and Espinosa, as director of the monopoly. The visitor general, Francisco de Armona, had died on the voyage from Spain, leaving that position vacant until the new visitor, Joseph de Galvez, arrived in 1765. The junta agreed to establish the monopoly throughout New Spain and published its decision on December 14, 1764. Monopolization of rama and snuff began with a viceregal order of January 18, 1765 ordering all producers of snuff and labrados, merchants, storekeepers or any others involved in the sale of tobacco in Mexico City to declare, under oath, and to deliver within eight days, all tobacco in 12 their possession. On February 21, the order was repeated, promising 13 prompt evaluation and payment for tobacco delivered. On April 22, the viceroy directed all justices in the colony to report the amount of rama in their jurisdictions, indicating separately the rama to be harvested that year. The justices were to determine owners, quality and value of the tobacco and to authorize no further planting outside the designated 14 zones. While these measures were being carried out, the monopoly also initiated procedures to determine who would be permitted to participate in the tobacco industry. Only "professional" cigarreros and pureros were to be allowed to continue producing labrados, and on a "temporary" basis. These persons were defined as those who were commonly regarded as professional tobacco craftsmen and who owned shops limited to only this business. The distinction was important because all other merchants were prohibited from engaging in the sale or purchase of tobacco in any form. Owners of stores ( pulperlas) were permitted, however, to purchase

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34 a "prudent" number of puros or cigarros for use in what was called "adeala," a variation of modern-day green stamps. From the outset, however, conflict developed over the method of establishing the tobacco monopoly. The first controversial issue arose in a debate between Espinosa and Sebastian Calvo over Espinosa's proposal to lease the monopoly, rather than place it under direct royal administration. Espinosa suggested leasing the monopoly by bishoprics, except for the archbishopric of Mexico, which would be administered directly by Renta officials. Calvo, as a member of the junta, vigorously opposed Espinosa's plan as a violation of royal orders. Galvez adopted the same point of view upon his arrival in Mexico several months later, as Indicated in his comment that in the April junta, Espinosa had pushed his plan for 18 renting the monopoly "with too much persistance. Meanwhile, Espinosa was able to convince the junta to rent the monopoly outside the archbishop19 ric, despite Calvo 's continued opposition. The agreement was formalized in an order of June 16 which outlined twenty conditions for leasing the monopoly to potential bidders. Espinosa intended to lease the Renta in the bishoprics of Puebla, Oaxaca, Guadalajara, Valladolid and Durango. Contractors were to purchase snuff called exquisito f ino and comun at 12, 8 and 4 reales per libra, respectively, and sell it to consumers at 20, 16 and 8 reales, respectively. They were to purchase rama supremo medio and inf imo at 4 reales per libra and sell it at 6 reales. All 20 tobacco would be purchased from the monopoly. The order made provisions for weighing tobacco and for settling losses during transport. It also included arrangements for collecting tobacco still outstanding, whether rama or snuff, and stated penalties against tardy individuals. The restriction of planting to Cordoba, Orizaba and Teusitlan was repeated. Leases were to last five or six years, with no overlapping of bishoprics. Final

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35 articles dealt with pajmients, accounting, prevention of contraband and 21 prosecution for fraud. Viceroy Cruillas approved Espinosa's decision in a letter of July 30, 1765, to his superiors in Spain. Cruillas stated that he wished to establish the Renta under direct administration throughout the kingdom, but slow communications and lack of trained personnel in the colony required him to accept the proposals of the director for leasing. The viceroy reported that the monopoly was progressing well, noting that he had employed 120,000 pesos from the treasury to pay part of the value of 22 tobacco collected so far. 23 Galvez who had arrived in Veracruz on July 18, 1765, disagreed with the viceroy's position. It was with the "greatest distress" he later noted in his 1771 Informe that he discovered that in Veracruz and throughout the viceroyalty tobacco was being traded freely. In Mexico City, moreover, there was a general uproar against the Renta because of serious 24 delays in paying for tobacco collected. Galvez was surprised by the situation, since he had expected his role in the monopoly to be only that of "perfecting" its organization in conformity with royal instructions. He understood that the King wished to establish tobacco monopolies throughout the American colonies, and therefore believed Espinosa's actions to 25 be an offense to royal authority and to "public faith." Galvez' attitude toward his role in the tobacco monopoly was largely determined by a special instruction of April 22, 1755) which he received from the Marques de Esquilache, minister of War and Hacienda, upon his arrival in New Spain. Although he was to take the place of the deceased visitor general, Francisco de Armona, on the junta, Esquilache 's order permitted him to claim special authority. Esquilache informed him

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36 that he was to look upon the tobacco monopoly as the "principal object of QiisJ commission," the establishment of which would be "one of the 27 most agreeable services rendered to the King. The powers granted him as visitor general with faculties of intendant authorized him to intervene 90 directly in all decisions made by the junta. 29 -' Upon arriving in Mexico City on August 26, Galvez noted that no juntas had met since June. After consulting the viceroy, he called a meeting for September 2. On this date and in a second junta of September 6, Galvez attacked the decision to lease the monopoly. He believed that Espinosa's insistence on renting was a violation of royal intentions. Moreover, the failure of the director to assure payments for delivered tobacco discredited the Renta, as indicated by the fact that no bidders had come forth since publication of the June 16 order calling for con30 tracts. Still worse, the monopoly had a serious deficit. From 1764 until August 31, 1765, its income, including 4,424 pesos of snuff revenues, was only 29,755 pesos, while costs were 35,534 pesos. This was a 5,788peso deficit, without including debts for salaries, tobacco collected or the value of the tobacco harvest. To Galvez, this indicated the neglect 31 of the tobacco monopoly by the junta. In a junta of September 6, the new officials admitted that the reason 32 for leasing the monopoly was because of a scarcity of funds. Galvez, however, overcame this obstacle by revealing that he had access to loans of over one million pesos from certain "subjects," to be used to establish 33 the monopoly under direct royal administration. With his promise of restoring the credit and credibility of the Renta, Galvez convinced the junta to yield ground on the leasing issue. In fact, the visitor produced 2,000,000 pesos to pay for tobacco collected and for other costs. The planters received 70,000 pesos from the contador of the monopoly,

PAGE 45

37 Antonio del Frago, to cover costs until Galvez visited the growing region in October, 1765,^^ An order of September 10, 1765, formalized the decision to establish the tobacco monopoly under direct royal administration. It declared that administrative districts (factorias) would be created in Puebla, Guadala35 jara, Oaxaca, Veracruz and Campeche, The monopoly had already established four factorias under administrators called factors ( factores ) in each of the four growing regions, which were Cordoba, Orizaba, Teusitlan and Jalapa, The order also repeated earlier demands for the delivery of tobacco, indicating that penalties for illegal planting would be enforced. Collection and sale of the tobacco was placed in the hands of the magistrates throughout the colony. In the bishopric of Durango, in part of the bishopric of Guadalajara and in the Provincias Internas, the tobacco industry was to continue as previously for one year, except that all tobacco had to be purchased from the monopoly. Orders of September 14 and 20 expanded and clarified procedures for collection, payment and sale of tobacco and cancelled the June 16 call for bidders. Magistrates received orders to establish outlets and hire personnel to receive and sell rama on monopoly account. To prevent illegal planting or trafficking in tobacco, the Renta outlined a system of denunciation in which persons exposing fraud would receive one-third of the value of any seized tobacco. Galvez' annoyance with Espinosa also led., to a number of significant changes in personnel during the month of September. He reinstated the treasurer of the monopoly, Juan Jose de Echeveste, whom Espinosa had forced to resign because of his inability to pay a bond, Galvez regarded Espinosa 's justification as a pretense, because the Renta actually owed Echeveste money. A second important change was the promotion of the

PAGE 46

38 contador, Antonio del Frago, to a position as co-director of the monopoly along with Espinosa, although at the same annual salary 2,000 pesos he earned as a contador. Espinosa received 4,000 pesos annually. This was a curious innovation, since Galvez later commented in his 1771 Informe that he had disapproved of the "absolute informality" and the "disorder and confusion" of the contaduria. Priestley suggests that the appointment of Frago as co-director was designed to reduce Espinosa 's power and 43 assure his obedience to royal instructions. Mathias de Armona, brother of the deceased visitor general, Francisco de Armona, replaced Frago as 44 ^ contador. Finally, Galvez replaced the warehousemen ( f ieles de almacenes ) appointed in Mexico City by Espinosa. He argued that they were not following proper procedures, partially the fault of Espinosa, despite clear instructions on their duties. He also complained that tobacco 45 monopoly offices generally operated without formal Spanish methods. Juntas of September 26 and October 9 completed the measures adopted by the monopoly while Galvez was present in Mexico City. They declared a final four-day amnesty for those who had not delivered their tobacco, 46 with a warning that houses and stores under suspicion would be searched. 47 The junta of October 9 charged the acordada a special judicial tribunal, with enforcing the laws against contraband, as had already been done with 48 various branches of the real hacienda. This decision was subsequently published in a viceregal order, in which the head of the acordada, Jacinto Martinez de Concha, was authorized to apprehend delinquents, prepare testimony and deliver prisoners and evidence to ordinary magistrates for trial. According to Priestley, Galvez was highly pleased with his work during the month of September. In a letter to Arrlaga, the visitor claimed that the tobacco monopoly had been established, in effect, by his actions in

PAGE 47

39 September, to the "applause" of the entire viceroyalty. The inhabitants of the colony, Galvez noted, understood that the monopoly would relieve them of more burdensome taxes, and that the residents of Mexico City alone were purchasing over 500 pesos of tobacco daily. Galvez was so enthusiastic about the prospects of the monopoly that he declared to Arriaga: "'Before two years have elapsed this will be one of the most considerable revenues of the vxceroyalty. Galvez does not appear quite so confident in his Informe He noted that when he left Mexico City on October 10 for Cordoba, Orizaba and Jalapa to deal with the planters, the "proponents of leasing" were once again working against his efforts to establish the Renta under direct administration. Their first move was to persuade his source of funds, whom he 51 referred to as the "Flotistas," to rescind their promise. They were unsuccessful, however, since Galvez was able to procure over 600,00 pesos in loans from residents in Mexico City and Veracruz. He actually employed a sum of 588,747 pesos to pay for collected tobacco and newlyharvested tobacco and to pay for 21,384 reams of paper at the Jalapa fair. The paper was to be used to manufacture cigarros on royal account, one of Galvez' principal plans for the tobacco monopoly. It is difficult to understand Galvez' complaints about the "proponents of leasing" during his absence. In ten juntas and in two orders between his departure in October, 1765, and his return in late January, 1766, no significant alterations were made in the monopoly. The issue of leasing, in fact, gave way to a second and much more important conflict between Galvez and the director, in which Espinosa was joined by Viceroy Cruillas. The issue was whether or not the tobacco monopoly should manufacture labrados. In a junta of December 11, 1765, Espinosa attacked Galvez' plans to manufacture puros and cigarros by blaming riots in Puebla on the visitor's

PAGE 48

40 efforts to establish a tobacco factory there, Cruillas, who had already clashed with Galvez over other matters, supported Espinosa's contention in letters to Arrlaga and Esquilache. In December, Espinosa ordered the abolition of tobacco manufacture by the Renta in Puebla and a return to privatE production only. Apparently, he was concerned with threats of serious social turmoil reflected in the appearance of posters with such statements as "Death to the King of Spain," "Death to Spain," and "Long Live the English." There were also threats to burn monopoly offices. In addition, Espinosa ordered suspension of Renta manufacturing in Veracruz, Guadalajara and Jalapa. A junta of December 17 considered a petition from the cigarreros of Mexico City. Indicating their fears that a factory would be established in Mexico City, they were assured by Espinosa that they would be heard before any such action were taken. The junta also decided to request a report from the Bishop of Puebla on the desireability of manufacturing by the Renta in Puebla. Galvez rejected Espinosa's arguments out of hand, declaring that the public disorder in Puebla was caused by opposition to the taking of censuses for raising militia. / Galvez' return to Mexico City in late January, 1766, weakened opposition from the junta, and he was able to promote his plan to manufacture puros and cigarros on monopoly account. Espinosa continued to oppose the idea, as he had since Galvez purchased the paper in Jalapa, despite the visitor's insistence that it was in conformity with royal instructions.^ Espinosa feared that Galvez' proposal was only the beginning of a longterm effort to abolish all private tobacco shops in the viceroyalty. The junta yielded to Galvez' wishes and the agreement was published in the bando of March 17, 1766. Repeating the order of March 17, 1765, it declared that the Renta would manufacture labrados in the factorias. Only

PAGE 49

41 professional cigarreros without any other means of livelihood would be permitted to continue producing labrados; all other merchants were strictly prohibited from dealing in tobacco of any kind, except to purchase a prudent number of puros and cigarros to be used in their shops for adeala. Manufacturing by the Renta began in some of the factorias after promulgation of the bando and the monopoly increased efforts to prohibit tobacco fil dealing by non-cigarreros. In 1766 the Crown unwittingly reopened the debate over manufacturing by altering the lines of authority for decision-making about the direction of the monopoly. In a royal order of January 2, 1756, the Crown approved the actions of the junta through July, 1765, including the decision to lease the monopoly. By the time the order was received in New Spain, the junta had already begun to put the monopoly under direct administration. Leasing, in fact, was not restored, and the issue did not disturb the monopoly any further. The January 2 order also advised the viceroy that the head of the Renta in Spain was to be the Marques de Esquilache, minister of War and Hacienda. In New Spain, the monopoly was to be under the jurisdiction of the junta and the director, without interference from any other royal officials or tribunals. The monopoly was to use the same methods and regulations as in Spain, and all necessary revenues were to be drawn from the royal treasury, to be repaid from monopoly funds when possible. On February 25, 1766, however, the Crown revised its previous order by reorganizing the junta, removing the viceroy from direct participation and greatly enhancing Galvez power. The new junta was to be composed of Galvez, two or three audiencia members selected by Galvez, and the two monopoly directors. The viceroy was to assist Galvez and the directors. Acknowledging the disputes between Galvez and the junta, and arguing that they would pass in time, Esquilache ordered close adherence to the visitor's

PAGE 50

orders. He appointed Galvez as subdelegado general of the Renta del tobaco in New Spain and endowed him with "personal jurisdiction" over the establishment and administration of the monopoly. The co-directors were urged to cooperate with Galvez, who was accountable only to Esquilache.^^ The revised order arrived in Mexico in May, 1766, and according to Priestley, revealed Esquilach's understanding that the junta had been obstructing Galvez' efforts to establish the monopoly. '^ It was not, however, the final word from Spain. On May 23, 1766, Arriaga took over the tobacco monopoly in his capacity as minister of the Indies and sent a new order of May 26, 1766, to New Spain, cancelling the order of February 25. The new order restored the viceroy to the junta, as superintendente general and added the fiscal of the audiencia, Juan Antonio Velarde. The other members would be the senior judge of the audiencia, Galvez, and the two directors. Arriaga also clarified, changed and added to previous instructions. The viceroy was to appoint all monopoly personnel from junta nominations. The monopoly was to keep separate accounts and to repay all outstanding debts owed to the treasury or to individuals. Although the viceroy was superintendente general the directors were allowed to report directly to the minister in Spain. They were ordered to submit reports on monopoly conditions, progress and changes and to send a list of all employees and their salaries, indicating if any additional personnel were needed. On Galvez' recommendation, Arriaga awarded special recognition to five persons, including treasurer Echeveste, for making loans to the monopoly. Finally, the junta was ordered to create a second junta composed of two judges of the audiencia and one inquisitor, to appoint persons to hear cases and to act as a court of appeal.

PAGE 51

43 The reason for the inclusion of the fiscal on the junta is unclear. Its effect, in the short run, was to reduce the power of Galvez, although this may have occurred only because the fiscal supported the position of the directors in the key dispute over manufacturing by the monopoly. Velarde's opposition to manufacturing re-opened the debate which appeared settled by the March 17, 1766 bando Although Galvez minimized the vigorous debate which erupted in late 1766 and most of 1767, his plan for the manufacture of labrados was overturned completely, and was not restored until he gained the backing of new monopoly officials from Sapin and from the new viceroy, Marques de Croix (1766-1771). Shortly after his arrival in Mexico in August, 1766, Croix adopted, although somewhat tenuously, the directors' views toward manufacturing by the monopoly. He refused to place blame on either Espinosa or Galvez for the confusion surrounding the Renta, explaining that each man saw himself vested with authority and both wished to see the monopoly succeed. ^^ Only a few days later, however, he did claim that Galvez' orders for manufacturing, which would require consumers to purchase labrados from the monopoly, was the major stumbling-block in an otherwise general acceptance of the new institution. He reported that it had been decided to moderate regulations in Mexico City, and surplus cigarros had been shipped to administrations outside the city. The same displeasure greeted monopoly manufacture and sale in these areas, leaving the Renta in danger of losing these supplies and opening the door to contraband. Croix stated flatly that the idea of manufacturing cigarros would not work, as the reaction of consumers had shown. Without criticizing Galvez' good intentions in any way, the viceroy advised Arriaga that the tobacco monopoly in New Spain could not expect the same success as in Spain, because of the impossibility of guarding against contraband in Mexico's rough terrain. The only

PAGE 52

44 guarantee of success, he argued, was to satisfy the growers and the con/T Q sumers, who together assured the profits of the monopoly. Croix's position on manufacturing did not settle the issue. In the juntas of October 16 and December 11, 1766, the matter was brought up once again. On October 16 the junta agreed to submit various materials to the fiscal in view of numerous complaints against the monopoly from such places as Oaxaca, Puebla and Guanajuato. In the junta of December 11, Velarde presented his arguments against monopoly manufacturing. Although the Crown had declared that production of labrados was to be part of the tobacco monopoly, he noted, it also wanted the monopoly to be established without inconvenience or harm to the public. If necessary, the Renta should compromise with the cigarreros. Velarde reflected on the misery which would be suffered by the many families who maintained themselves in tobacco work should the monopoly eliminate private manufacturing. This could not be justified, even if revenues greatly increased. Velarde proposed the free manufacture and sale of puros and cigarros, with harsh penalties against those who used or sold non-monopoly tobacco. No resolution was taken in the junta because Galvez requested an opportunity to present his own proposal. In the junta of January 5, 1767, he outlined a plan which he had proposed to the Crown in 1766 and which 72 had been approved in principle. The junta passed this to the fiscal, along with new complaints from. the to^m council ( cabildo ) and merchants of Durango, the town council of Zacatecas, the alcalde mayor of San Luis 73 de la Paz, and others. The petitions indicated a "general repugnance" to the abolition of free manufacture of tobacco in the viceroyalty. Writing in 1795 as director of the monopoly, Silvestre Diaz de la Vega suggested that these complaints and "popular movements" in Puebla and 7 S and Guanajuato especially influenced Velarde's thinking. Arcila Farias,

PAGE 53

45 citing a letter of July 26, 1766 from Cruillas to Spain, reports that the viceroy blamed the monopoly for disturbances of July 26, 1766 in Guanajuato. About 30,000 men had occupied the city on July 17, threatening to burn tobacco monopoly outlets and offices and demanding a return to the monopolization of only the sale of rama. Arcila Farias believes that Cruillas exaggerated the incident to discredit Galvez. Despite Galvez' proposal, the fiscal remained attached to his posi77 tion. In the junta of February 14, 1767, he agreed that Galvez' plan would undoubtedly increase revenues but indicated that the Crown did not desire revenues at the expense of a "notable vexation and resentment" by the public, perhaps leading to disturbances or riots. The Crown greatly favored the establishment of the monopoly, and as quickly as possible, but only on a sound foundation of peace and order. Irregardless of the bando of March 17, 1766, the fiscal considered the general clamor in all areas where manufacturing had been established as ample evidence against Galvez' ideas. He again proposed private manufacturing and sale of labrados, with prohibitions against non-cigarreros; merchants would be allowed to sell labrados purchased from the tobacco shops. Also, he proposed that the monopoly continue to manufacture in Veracruz because there had ... 78 never been cigarreros xn that city. Except for Galvez, the other members of the junta agreed with Velarde. Espinosa and Frago cited the same reasons as the fiscal, and expressed 79 concern over the degree of resistance from the public. Francisco Echavarri argued that the junta could use its discretion on the matter. He opposed manufacture by the monopoly on practical grounds, pointing out that there were about 1,000 tobacco shops and perhaps 4,000 workers, both men and women, who would have to be absorbed by the monopoly in Mexico City alone. Although he recognized that the monopoly could manufacture

PAGE 54

46 labrados, either by controlling the industry through Crown-operated factories or by providing tobacco and paper to the workers in their homes and shops, he believed the cost to be prohibitively high. Galvez adamantly opposed the views of the other junta members. He argued that the decision to manufacture should stand because it was in accordance with royal instructions. The purpose of the monopoly, he reminded them, was to produce revenues to help pay the defense costs of the colony. Monopoly factories would increase revenues by fifty percent, as verified by the accounts available at the time. By December, 1766, total monopoly income was 1,200,000 pesos; to alter the system would be a serious threat to future progress of the Renta. Referring to the nonexistence of manufacturing in Mexico City and Valladolid, and to orders 81 to halt it in other areas, he suggested that the junta was not giving adequate time or effort to determining the true value of monopoly production. He was especially opposed to any changes in Durango, which supplied the Provincias Internas, and in Veracruz, where the public was content with the monopoly, as reported by the factor of Veracruz. ^^ Galvez also used the opportunity to defend himself against certain charges. First, he denied that the riots in Puebla in 1765 had been caused by the creation of the tobacco factory. As he would do in his 1771 Informe he insisted that there was good evidence to prove that the disturbances were caused by resistance to the taking of a census for raising militias. Second, he argued that the "movement" in Guanajuato had the same causes, compounded by changes in alcabala duties on certain mining equipment. Attacks against the tobacco monopoly were only "incidents" in the general disturbances. Third, he suggested that complaints in Oaxaca were exaggerated by the secretary of the bishopric, who was selling both tobacco and playing cards illegally under cover of ecclesias-

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47 83 tical immunity. The undeniable fact, he concluded, was that tobacco monopoly revenues increased significantly only after the bando of March 17, 1766 eliminated non-professional merchants from the tobacco trade. Apparently as a compromise, he voted to continue suspension of manufacturing by the Renta, except in the factorias of Veracruz and Durango, and demanded confirmation of prohibitions against non-cigarrero merchants. The junta of February 14, 1767 voted to return to the private production and sale of puros and cigarros. In this and a subsequent meeting of March 5, only storekeepers were singled out in the prohibition against manufacture and sale, although they would be permitted to purchase labrados for their shops from the tobacco shops or from the monopoly. Veracruz 85 would be excluded from the decision. Arrangements were made to sell stocks of monopoly labrados and to sell paper which Galvez had purchased in Jalapa, Echeveste, director of the playing-card monopoly as well as treasurer of the tobacco monopoly, received most of the paper in Mexico y 86 City and Galvez was reimbursed. Orders were sent out to abolish all manufacturing by the monopoly, but the junta agreed to postpone any public announcement until existing 87 stocks could be sold. The issue, however, was still not settled. On June 3, 1767 the new administrator general of the Administration General of Mexico, Simon de Huarte, wrote to the viceroy expressing serious misgivings about the recent decisions by the junta. Having been informed by the directors that all merchants could manufacture and sell puros and cigarros, he wrote the viceroy declaring that it was a well-known fact that the success of the tobacco monopoly in Spain depended on the absolute restrictions against private trading in tobacco. The March 17, 1766 bando had enacted restrictions in New Spain somewhat along these lines, excepting only professional cigarreros, but the new regulations were even

PAGE 56

48 broader, allowing anyone to produce and sell, Huarte believed this would lead to a great deal of fraud because the monopoly could not guard against 89 such widespread freedom. In response to this representation, and after / 90 consulting Galvez and the new contador of the monopoly, Phelipe del Hierro, Croix issued a decree on June 4, 1767 prohibiting production and sale of tobacco by all merchants except professional cigarreros. In effect, Croix was suspending the junta decisions and returning to the provisions of the bando of March 17, 1756, Croix then advised Spain of his actions. The order which would have been issued once labrado stocks were sold by 91 the monopoly was never sent out. The Crown's response to the viceroy's suspension of the junta's decision was emphatic. In the key order of October 24, 1767, it strongly disapproved of the junta's actions in February and March. "With expres92 ^ sions of noteable displeasure," as Galvez commented, the order accused the junta members and the monopoly directors of favoring personal concerns over the progress of the Renta. The Crown, the order declared, had already expressed its desire to establish the monopoly under direct administration. By working skillfully and with close attention to the satisfaction of consumers, officials would soon accustom the inhabitants to commercial transactions in a monopolized product. With an argument similar to that used by Galvez, the Crown criticized the junta's decisions as totally contradictory to the bando of March 17, 1766, which had been the basis 93 of the favorable results achieved by the monopoly thus far. To settle the issue permanently, the Crown ordered a return to the March 17, 1766 bando and spelled out its wishes. Except for the monopoly itself, only professional cigarreros were to be allowed to manufacture puros and cigarros. They could produce labrados and sell them in their shops, or sell them to the Renta and be paid for their work. All other

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49 merchants were strictly prohibited from dealing in tobacco, except to purchase a prudent number of puros and cigarros for adeala in their shops. In addition, the directors were to issue no new licenses for tobacco shops because "little by little" the private shops were to be abolished and replaced by monopoly outlets. To avoid fraud, tobacco shops would be Inspected and all purchases of rama would be carefully accounted for in formal registers. The wishes of consumers were to be considered at all times by assuring an adequate supply of labrados or rama. The order also changed the powers of the junta. In the future, the Junta would have jurisdiction in only monopoly litigation. Because the Crown regarded the junta as the cause of delays in tobacco monopoly resolutions, it was excluded from any authority in economic or administrative decisions. Finally, to make clear its absolute opposition to leasing the monopoly, the Crown warned that Espinosa would be removed if he continued to push the idea. In fact, 94 Croix was authorized to relieve Espinosa if he thought it necessary. Croix published the order on February 12, 1768. For a third time, it was declared that only the Renta and professional cigarreros would be 95 allowed to produce and sell puros and cigarros in New Spain. The royal order of October 24, 1767 proved to be a definitive statement on the leasing of the monopoly. Although it did not resolve the issue of manufacturing, as will be seen in subsequent chapters, the order did overturn efforts to prohibit manufacturing by the monopoly and cleared the way for the abolitions of the tobacco shops and the establishment of monopoly factories. It is difficult to account entirely for the pendulum-like swings in decision-making during the first three or four years of the monopoly's existence. Espinosa' s preference for leasing, despite royal orders and current practice in Spain, appears to have been influenced by lack of

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50 access to funds. Exactly why he was unable to obtain loans in the same manner as Galvez is not clear. Viceroy Cruillas was influenced in his behavior by animosity toxjard Galvez in dealings unrelated to the tobacco monopoly. In addition, he may have felt that Espinosa deserved his support because of the director's experience in the tobacco monopoly in Spain. Both individuals were concerned about threats to social stability revealed in petitions against the monopoly and in the disturbances in Puebla, Guanajuato and Oaxaca. Galvez' role, despite the royal order of April 22, 1765, was somewhat ambiguous. The force of his personality and his powers as visitor general assured that his presence would be extremely important, if not decisive. Yet his point of view, always closely attuned to the royal Instruccion of 1764, met with unguarded hostility. Similarly, the actual powers of the junta were not clearly defined. It is not surprising, for example, that Francisco Echavarri could argue in 1767 that the organization of the monopoly was at the discretion of the junta, since the 1764 instruction did provide for alternative approaches to establishment of the Renta. Changes in the organization of the junta, and the addition of the fiscal in 1766, had no long-lasting effects. When the Crown was forced to determine exactly what it wanted in the colony, it simply reduced the junta's powers and returned to its original 1764 orders. Faced with the resistance of most of its major officers to the junta's decisions of early 1767, the Crown took decisive action. Since these individuals generally supported the Instruccio^n of 1764, it is not surprising that the Crown supported their position. Galvez was vindicated because his ideas were representative of the eighteenth-century trend toward direct royal administration of revenues and greater involvement by royal officials in certain areas of economic life. The positions he had adopted.

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51 were consistent with the broad aims of Crown policy and with the specific aims of the 1764 Instruccion Moreover, as Galvez commented in 1767, the results of the monopoly under the conditions of the March 17, 1766 bando had not been unimpressive. By the end of 1766 the monopoly showed a profit 96 of 239,098 pesos. Most debts had either been paid, including the 120,000 pesos borrowed from the treasury and part of the 588,747 pesos provided 97 by Galvez, or were covered by funds on hand. Income in 1767 increased 98 over 1765-1766, yielding a profit of 416,201 pesos. On March 15, 1768 the Ordinances of the royal tobacco monopoly in 99 New Spain were published in Mexico City. Together with the viceregal order of February 12, 1768, they defined the basic organization of the monopoly. It must be noted, however, that many aspects of the monopoly remained to be settled, such as administrative organization, pay scales, establishment of factories and abolition of the tobacco shops. In the growing regions, the monopoly had determined its fundamental approach to the contracting system by 1768, but a major dispute over the growing of tobacco for the Renta would soon produce the first crisis in the monopoly. NOTES 1. Arcila Farias, Reformas economicas vol. 2, 114. Galvez, Inf orme p. 19, noted that the first proposal for a tobacco monopoly came from Viceroy Juan de Palafox in 1642 when he suggested to his successor, Conde de Salvatierra, the creation of a monopoly to raise revenues for the armada de barlovento, a special naval force. 2. Julian de Arriaga to Marque's de Cruillas, July 23, 1761, AGN, Renta, vol. 47, fols. 154-154v. 3. Fonseca and Urrutia, vol. 2, 354; Galvez, Inf orme p. 20. Arcila Farias, Reformas economicas vol. 2, 114 notes that the alcalde del crimen of the audiencia, Sebastian Calvo, sent a plan to Spain in 1762 for establishment of a monopoly in New Spain, and actually went to Spain to discuss it.

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52 4. Archer, Army in Bourbon Mexico pp. 3-4, 10. 5. The Real Instruccion expressed these points explicitly, stating: "Los excesivos gastos que se han aumentado en ese Reyno, con motivo de la Tropa, y Milicias, que se han de establecer, para su conservacion, y defenza, y los que al mismo tiempo es preciso hacer en otras Yslas, Plazas y mis Dominios, a fin de ponerlos a cubierto de toda imbasion enemiga, y que mis Vasallos logren del reposo, y seguridad que les deseo en sus Labrazas, tratos y comerclos: me han obligado a premeditar algunos medios en que sin gravamen del vasallo, contribuyen a soportar los gastos acrecentados. Y teniendo presente que no ay Principe que no tenga en sus Dominios estancado el tabaco por ser fruto no necesario a la vida humana, y que pendiendo el tomarlo del arvitrio de cada uno, sufraga su consumo para atender a las urgenclas de la Corona, sin gravamen del Vasallo en general, ni del Comercio, por no ser parte principal de el, sine es un pequeno ramo, que distribuido entre muchos, no se hace sencible su falta. ..." Real Instruccio'n, August 13, 1764, AGN, Renta, vol. 47, fol. 155. See also Royal Order, August 13, 1764, AGN, Renta, vol, 47, fols. 164v-165. 6. Royal order, August 13, 1764, AGN, Renta, vol. 47, fols. 164v-166, 7. Hereafter referred to as the junta, without underlining. 8. A libra was equal to 0.46025 kilograms, or 16 onzas Manuel Carrera Stampa, "El sistema de pesos y medidas colonial," Memorias de la Academia Mexicana de Historia vol. 26 (1967), 16. 9. Real Instruccion, August 13, 1764, AGN, Renta, vol. 47, fols. 155-159. 10. The three reformers, Espinosa, Arraona and Vlllalba all came to New Spain on the same voyage in November, 1764. Armona, however, died on the voyage. Priestley, pp. 135-136; Archer, Army in Bourbon Mexico p. 10; Galvez, Informe p. 20. 11. Bando, Cruillas December 14, 1764, AGN, Bandos, vol. 5, fol. 99. 12. Francisco Fuertes, appointed secretary of the junta on December 15, 1764, was put in charge of tobacco collections. He was also secretary of the viceroyalty. Fonseca and Urrutia, vol. 2, 355. 13. Fonseca and Urrutia, vol. 2, 356; Galvez, Informe p. 23. 14. Phelipe del Hierro, April 27, 1771, AGN, Ramo de Tabaco (hereafter cited as Ramo), vol. 463, fols. 40-40v.

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53 15. Bando, Cruillas, March 17, 1765, AGN, Bandos, vol. 6, fol. 9. The bando used the term "pureros y cigarreros de profesion" and the common expression "por ahora," an indefinite "for now" or "temporarily." 16. Bando, Cruillas, March 17, 1765, AGN, Bandos, vol. 6, fol. 9. The merchants were referred to as "tratantes, mercaderes y comerciantes," terms apparently intended to cover all types of merchants who might be dealing in tobacco. 17. Bando, Cruillas, March 17, 1765, AGN, Bandos, vol. 6, fol. 9. The modern spelling of "adeala" is "adahala." The bando refers to "adeala, pilon o galita" used by the storekeepers to promote sales. Customers apparently received puros and cigarros if they purchased a certain value of goods, or perhaps as change. 18. Galvez, Informe p. 23. 19. Fonseca and Urrutia, vol. 2, 356; Galvez, Informe p. 24. 20. Galvez, Informe pp. 16-21, and Priestley, p. 146 state that contractors were promised a profit of 150 percent. 21. Bando, Cruillas, June 16, 1765, AGN, Bandos, vol. 6, fol. 15. 22. Cruillas to Marques de Esquilache and Arriaga, July 30, 1765, AGN, Correspondencia de Virreyes (hereafter cited as CV) vol. 10, fols. 236-237. 23. Fonseca and Urrutia, vol. 2, 357. 24. Galvez, Informe p. 26. 25. Ibid. 357, 26. Ibid ; Priestley, pp. 146-147; Fonseca and Urrutia, vol. 2, 27. Quoted in Galvez, Informe p. 26. 28 Galvez Informe p 26 29. Fonseca and Urrutia, vol, 2, 357, 30. Galvez, Informe p. 27, 31. Ibid. 32. Ibid. 33. Ibid.

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54 34. Ibid i pp, 27-28, Fonseca and Urrutia, vol, 2, 359, state that Galvez received the 200,000 pesos from the treasury of New Spain, to be repaid from monopoly revenues when possible, Galvez indicates that 100,000 pesos were from the treasury but is unclear about the second 100,000. Priestley, pp. 146-147, notes only 100,000 pesos available at the time, borrowed from the Consulado of Cadiz, but with a promise of unlimited funds. Galvez, Informe, pp. 32-33, states that Spanish commerce he refers to the "Flotistas" promised the one million or more pesos. Available accounts do not include anything about this 200,000 pesos. They show only the 120,000 pesos borrowed by Cruillas and 588,747 pesos which Galvez obtained in October. See Phelipe del Hierro, April 23, 1768, Estado del total consume de tabacos, su valor entero, salaries, gastos y liquido haver que ha producido la Renta del Tabaco desde su establecimiento hasta fin de Diciembre del ano pasado de 1766. Biblioteca Nacional de Mexico (hereafter cited as BN) Tabacos, v. Nueva Espana, Real Hacienda, 1785, vol. 1, ms. 19 (1332), fols. llv-12, 35. Bando, Cruillas, September 10, 1765, AGN, Bandos, vol. 6, fol. 18. 36. The dates for the creation of the four factorias were as follows: Orizaba, June 1, 1765; Teusitlan, June 26, 1765; Cordoba, July 1, 1765; and Jalapa, September 4, 1765. Silvestre Diaz de la Vega to Marques de Branciforte, August 23, 1797, AGN, Ramo, vol. 44. 37. Bando, Cruillas, September 10, 1765, AGN, Bandos, vol. 6, fol. 18; Galvez, Informe p. 28. Fonseca and Urrutia, vol. 2, 358, state that this order also included a provision against use of the ecclesiastical fuero (exemption) as a shield for breaking tobacco monopoly laws. 38. Hierro, April 27, 1771, AGN, Ramo, vol. 463, fols. 41-41v. 39. Bando, Cruillas, September 14, 1765, AGN, Bandos, vol. 6, fol. 20. Fonseca and Urrutia, vol. 2, 359, note that the September 14 order also arranged for provisional appointments of f ieles monopoly officials subordinate to the f actores (factors) of the factorias. The bando does not actually refer to these persons as fiels but mentions appointments of individuals to receive, pay for and sell tobacco on tobacco monopoly account. 40. Fonseca and Urrutia, vol. 2, 355; Cruillas to Esquilache, August 22, 1765, AGN, CV, vol. 9, fol. 825. 41. Galvez, Informe p. 27. 42. Ibid pp. 27, 29. 43. Priestley, p. 147. 44. Galvez, Informe p. 29. 45. Ibid ., pp. 27, 31. 46. Fonseca and Urrutia, vol. 2, 359.

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55 47. For a description of the acordada and its operations, see Colin M. MacLachlan, Criiginal Justice in Eighteenth Century Mexico : A Study of the Tribunal of the Acordada (Berkeley, 1974) 48. Galvez Informe, p. 33. 49. Bando, Cruillas, November 12, 1765, AGN, Bandos, vol. 6, fol. 23. 50. Quoted in Priestley, p. 148. 51. Priestley, p. 149, states that they were deputies of the Consulado, or merchants' guild, of Cadiz. 52. Galvez, Informe pp. 31-32. Galvez, Informe p. 33, states that he paid for tobacco with drafts issued by agents of the Cinco Gremios Mayores de Madrid. 53. Cruillas to Arriaga, March 14, 1766, AGN, CV, vol. 10, fol. 317; Cruillas to Arriaga and Esquilache, April 23, 1766, AGN, CV, vol. 9, fol. 921. For an analysis of Galvez' relationship with Cruillas, see Priestley, pp. 135-171 and Calderon Quijano, Carlos III vol. 1, 143-150. For Galvez' general opposition to the role and powers of the viceroys and his promotion of the intendant system, see Brading, Miners and Merchants pp. 44-51. 54. Sebastian Diaz de la Vega to Marque's de Branciforte, July 10, 1795, AGN, Ramo, vol. 495, fols. 58-59v. Vega, who was director of the monopoly in 1795, issued this report as background to the manufacture of labrados by the monopoly. 55. Vega to Branciforte, July 10, 1795, AGN, Ramo, vol. 495, fol. 59v, 56. Vega to Branciforte, July 10, 1795, AGN, Ramo, vol. 495, fol. 59v, / 57. Galvez, Informe p, 34, 58. Ibid ., pp. 34-35. 59. Ibid p. 33. 60. Bando, Cruillas, March 17, 1766, AGN, Bandos, vol. 6, fol. 30. 61. Galvez, Informe p. 35. 62. Royal order, January 2, 1766, AGN, Renta, vol. 47, fols. 229-230. 63. Royal order, February 25, 1766, AGN, Renta, vol. 47, fols. 209-210. 64. Priestley, p. 150.

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56 65. Note added to copy of royal order of January 2, 1766, AGN, Renta, vol. 47, fol, 230, 66. Royal order. May 26, 1766, AGN, Renta, vol, 47, fols. 212-212v. Also quoted in Fonseca and Urrutia, vol. 2, 361-363. Before this royal order was received in New Spain, Cruillas had written to Arriaga complaining that the February 25 order changing the junta was a public rebuff of his authority since he was president of the junta and juez conservador of the Renta. He pointed out that his moderation was the reason for acceptance of the monopoly in the colony. Cruillas to Arriaga, June 19, 1766, AGN, CV, vol. 9, fol. 950. 67. Royal order, May 26, 1766, AGN, Renta, vol. 47, fols. 212-212v. 68. Marques de Croix to Arriaga, September 22, 1766, AGN, CV, vol. 11, fols. 63-64. 69. Croix to Arriaga, September 26, 1766, AGN, CV, vol. 11, fols. 65-67. 70. Vega to Branciforte, July 10, 1795, AGN, Ramo, vol. 495, fol. 63. 71. Vega to Branciforte, July 10, 1795, AGN, Ramo, vol. 495, fols. 62V-65. 72. Vega to Branciforte, July 10, 1795, AGN, Ramo, vol. 495, fols. 65-66. Vega did not elaborate on the plan. 73. Vega to Branciforte, July 10, 1795, AGN, Ramo, vol. 495, fols. 65-66. 74. Vega to Branciforte, July 10, 1795, AGN, Ramo, vol. 495, fols. 65-66. 75. Vega to Branciforte, July 10, 1795, AGN, Ramo, vol. 495, fol. 66. 76. Arcila Farias, Reformas economicas vol. 2, 121. 77. His report was probably dated February 5, 1767. In a letter from Croix to Arriaga, March 29, 1767, AGN, CV, vol. 11, fol. 276, Croix mentions the fiscal 's statement of February 5, 78. Vega to Branciforte, July 10, 1795, AGN, Ramo, vol. 495, fols. 66v-68v. 79. Vega to Branciforte, July 10, 1795, AGN, Ramo, vol. 495, fols. 68v-69v. 80. Vega to Branciforte, July 10, 1795, AGN, Ramo, vol. 495, fols. 69v-72v. 81. I did not encounter this order.

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57 82. Vega to Branciforte, July 10, 1795, AGN, Ramo, vol. 495, fols. 74-76V, 83. Vega to Branciforte, July 10, 1795, AGN, Ramo, vol. 495, fols. 76v-77v. 84. Vega to Branciforte, July 10, 1795, AGN, Ramo, vol. 495, fols. 78-78V. 85. Croix to Espinosa and Frago, March 11, 1767, AGN, Renta, vol. 47, fols. 236-237V enclosing copy of decisions of February 14, 1767 junta. 86. Croix to Espinosa and Frago, March 11, 1767, AGN, Renta, vol. 47, fols. 237-240v enclosing copy of decisions of March 5, 1767 junta. 87. Vega to Branciforte, July 10, 1795, AGN, Ramo, vol. 495, fol. 80. 88. Huarte was appointed in Spain and took office in Mexico City by the viceregal decree of September 13, 1766. Fonseca and Urrutia, vol. 2, 361, Huarte headed the Administration General of Mexico (see Figure 1, Chapter One) 89. Vega to Branciforte, July 10, 1795, AGN, Ramo, vol. 495, fols. 81-81V. 90. Hierro was appointed in Spain and took office in Mexico City by the viceregal decree of September 13, 1766. The oficial mayor of the contaduria, Jose' de la Riva, and the oficial segundo, Jose' Martin Florencia, also took office on September 13. Fonseca and Urrutia, vol. 2, 361. 91. Vega to Branciforte, July 10, 1795, AGN, Ramo, vol. 495, fols. 82-82v. Galvez, Informe p. 36, states that Croix advised Spain of his actions on May 24 and July 7, 1767. He does not mention the June 4 decree or the June 3 letter to Croix from Huarte, but notes that Croix made the decision to suspend the junta's new regulations after consulting with him and with Huarte and Hierro. 92. Galvez, Informe, p. 36. 93. Vega to Branciforte, July 10, 1795, AGN, Ramo, vol. 495, fols. 82v-85. 94. Vega to Branciforte, July 10, 1795, AGN, Ramo, vol. 495, fols. 82v-85; Galvez, Informe pp. 36-37; Fonseca and Urrutia, vol. 2, 365-366. 95. Bando, Croix, February 12, 1768, AGN, Bandos, vol. 7, fol. 3.

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58 96. Phelipe del Hierro, November 5, 1771, Estado del valor entero, salaries, gastos y liquido que ha rendido la Renta del Tabaco desde su establecimiento hasta fin de Diciembre de 1770. in Galvez Informe, Appendix 5; Hierro, April 23, 1768, Estado .'l766, BN, Tabacos v. Nueva Espana, Real Hacienda, 1785, vol. 1, ms. 19 (1332), fols. ll-12v shows a profit of 228,362 pesos. The 1771 figure is undoubtedly a revision. ^97. Hierro, April 23, 1768, Estado 1766, BN, Tabacos, v. Nueva Espana, Real Hacienda, 1785, vol. 1, ms. 19 (1332), fols. ll-12v. 98. Hierro, November 5, 1771, Estado 1770, in Galvez, Informe, Appendix 5. 99. March 15, 1768, Ordenanzas de la Real Renta del Tabaco, AGN Renta, vol. 47, fols. 265-309; also published in Fonseca and Urrutia vol, 2, 439-486.

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CHAPTER THREE THE GROWING SECTOR; LAS VILLAS The divergence of opinion about manufacturing by the tobacco monopoly should not obscure the fact that the Renta was Initially organized to generate its income only from the purchase and resale of rama, or leaf tobacco. Furthermore, although the Crown's 1767 order to manufacture puros and cigarros eliminated the need to produce profits strictly from rama sales, assuring a regular and adequate supply of the leaf continued to be a principal responsibility of monopoly officials throughout the history of the monopoly. The device chosen for organizing the growing sector was the tobacco contract, an arrangement with planters to supply specified quantities of rama at negotiated prices. By employing contracts, the monopoly rejected direct participation in favor of regulating the planters who were already producing tobacco in the colony. Insofar as possible, the contracts were designed to control quality, quantity, prices and planting locations. To assure a regular profit, the monopoly sold rama to consumers at a price well above the monopoly's costs for purchasing, transporting, storing and selling tobacco. No person or group was permitted to purchase rama outside the monopoly. Organizing the growing sector required that officials deal with three distinct but related problems: how, where and how much to produce. These issues did not arise together, nor were they settled together; but as they were resolved, the mature form of the growing sector emerged. This chapter assesses the development of the growing sector in terms of these three issues. It examines, first, the historical evolution of the tobacco contracts; second, the determination of planting areas; and third, the unsettling effects of an impending tobacco shortage in 1771. 59

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60 Immediately following the establishment of the monopoly in 1764, Viceroy Marques de Cruillas ordered the growers of Cordoba and Orizaba to elect deputies to be sent to Mexico City to negotiate tobacco contracts. Each of the two areas sent two deputies. Lieutenant Miguel de Leiba Esparragoz and Captain Felix de Gandara from Cordoba, and regidores Juan Antonio de Cora and Manuel de Montes Arguelles from Orizaba. All four men were growers. Terms for the initial contract were agreed upon without serious resistance from the deputies, and the first contract was approved by the viceroy on February 21, 1765. The terms of the agreement established the basic guidelines for all future contracts. As much as possible, the Renta accepted the traditional growing and pricing systems, but made efforts to simplify and standardize procedures. The twenty-one classes of leaf tobacco currently available were reduced to three, called supremo mediano and infimo or, alternatively, primera segunda and tercera A fourth class, usually called punta was made up of the waste and small pieces collected during the processing of 2 the leaves. The price paid by the monopoly was determined by the class of leaf. Prices were set at 3 1/4 reales per libra of primera, 2 1/2 reales for 3 segunda and 1 real for tercera. Punta was purchased by the arroba, at 3 pesos (24 reales) per arroba. Other terms of the contract dealt with weighing, weight losses and delivery. Tobacco was bundled and shipped in the form of tercios each tercio being made up of 80 or 100 smaller 4 bundles of tobacco leaves known as manojos Tercxos, xn turn, were bundles using mats and cords of palm or other materials. To account for the weight of these bundling materials, the monopoly determined the weight of each tercio by subtracting thirty libras for the mats and cords. In addition, the monopoly subtracted two libras from the tercio gross weight

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61 for error in weighing and deducted ten percent of gross weight for weight loss from drying or other causes. The tobacco monopoly used this procedure to determ^ine a net weight for each tercio and then paid the established price per libra according to class. The contract included anumber of other arrangements. All tobacco was to be delivered within thirty days of being formed into tercios. Special marks were to be placed on each manojo, to indicate class. Upon delivery, formal inspections were to be conducted by the deputies, Renta officials and the local alcalde mayor or corregidor. The monopoly agreed to pay half the value of the tobacco in cash at the time of delivery and the balance four months later. To regulate the quantity of tobacco grown, the deputies and monopoly officials were to prepare a register of all planters and to assign the number of plants ( matas ) each could plant each Q year. The duration of the contract was to be three years. The Instruccion of 1764 ordered that Teusitlan be included with Cordoba and Orizaba as part of the growing area. The junta permitted Teusitlan to sign a contract on the same terms as Cordoba and Orizaba, but with certain adjustments. Because Teusitlan tobacco was considered to be of inferior quality, it set prices below those of Cordoba and Orizaba, at 2 1/2 reales, 1 1/4 reales, 3/4 real and 20 reales for primera, segunda, tercera and punta, respectively. In addition, it raised the deductions 9 for weight loss from ten to thirteen percent. Finally, in the event of a surplus, Teusitlan was to reduce planting by one-half to one-third. Despite the royal order limiting planting to Cordoba, Orizaba and 11 Teusitlan, the junta decided to add Jalapa to the growing area. It was probably prompted by Viceroy Cruillas' support for petitions from the alcalde mayor of Jalapa, Antonio Primo de Rivera, and from the local merchants. Tobacco, they informed the viceroy, had been grown in Jalapa

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62 "from time Immemorial" and was its only significant agricultural product. Jalapa was well-situated for transport of tobacco to Mexico City and had personnel and buildings available for the use of the monopoly. Cruillas supported the petitions, arguing that the exclusion of Jalapa was unjust. He suggested that the Teusitlan factoria be transferred to Jalapa or that Jalapa be granted a factoria on the same terms and with the same contract 12 as Teusitlan. Jalapa was added to the growing region under the same 13 terms as Teusitlan, although no contract was actually signed. The creation of the factoria of Jalapa on September 4, 1765 brought to four 14 the total number in the planting area. The ease with which the first contract was signed temporarily obscured an underlying conflict between the monopoly and the planters. As Fonseca and Urrutia were later to admit, this conflict was built into the contract negotiations because the Renta sought the lowest possible prices and the planters the highest. Curiously, however, this difficulty did not emerge at first, either because the planters were not certain of their needs or because they were content with the essential guidelines and prices. Certain monopoly officials had no doubts about the terms of the contract. While contracts were still under discussion, Sebastian Calvo, Espinosa's opponent in the matter of leasing, argued that proposed prices were too high. Although he was outvoted in the junta's final decision, his point of view gained the support of Galvez when the visitor arrived later in 1765. In the Important September juntas, Galvez proclaimed the contract prices to be absurdly high, and that those in the Cordoba and Orizaba contracts were the highest paid for tobacco anywhere in the world. Prices in the Teusitlan contract, he suggested, were more reasonable. Unable to change the terms of the 1765 contract, Galvez simply ignored them. He was commissioned to go to the growing areas in October to survey

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63 the situation and to make payments for tobacco already collected or recently harvested. Using drafts provided by agents of the Gremios Mayores de Madrid who were present at the Jalapa fair, Galvez paid out 588,747 pesos for the tobacco. He noted, however, that the sum paid for the harvest, over 400,000 pesos, was actually 22,474 pesos less than the price agreed 17 to in the contracts. The planters protested this action and, although they gained the support of the fiscal, Velarde, and of the junta, Galvez was able to convince Viceroy Croix to accept his position. Croix ordered -1 Q the planters to maintain "perpetual silence" on the matter. Galvez' commission also authorized him to name a person to supervise planting all year long and to negotiate contracts on behalf of the monopoly. To carry out these duties, he appointed a personal friend, Francisco del Real. Galvez regarded Real's appointment as an important step in the development of the monopoly, describing him as not only "loyal" and "in19 corruptible" but also as "the principal axis" of the monopoly. Real was awarded the title of Reconocedor General de Tabacos or Inspector General of the Tobacco Monopoly. His duties are best understood by referring to his own assessment of his job as he reported it to Galvez in 1771. The report also serves as a general outline of growing procedures. In early May of each year. Real ordered the planters to prepare their land for seeding. From August through September the plants would be transplanted in accordance with the register of all planters which assigned the number of matas each could plant. The registers were prepared in late June, and assignments were based on the capacity of each planter in relation to the number of tercios the directors wished to harvest. Real noted the importance of this procedure because the Renta had to coordinate planting to assure an adequate supply of tobacco for the consumers.

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64 In December, Real began a general survey of all tobacco fields to inspect plants and detect any abuses or problems. From this inspection he prepared a preliminary report on the size and quality of the harvest. Since the inspection took about sixty days, changes in weather or the appearance of pests could cause drastic alterations in any estimate. Harvesting began in mid-February and the planters were required to report their yields. The tobacco leaves were sent to the towns where they were subjected to a process known as the beneficio essentially a curing and drying process, in one of the 200 houses in the growing regions. Real was responsible for inspecting every building. The planters were again required to report to Real the amount and class of tobacco processed. After being packed into tercios, all tobacco was to be delivered to the 20 monopoly within sixty days. The monopoly usually began to receive tobacco from mid-to-late June and Real was responsible for registering all deliveries. This was an extremely laborious procedure, he noted, because of possible fraud in forming the manojos and tercios. He also commented that it was unhealthy, causing his lieutenant to resign after two years 21 of service. The appointment of Real completed the formalization of contract procedures but did not assure tranquility in contract negotiations. Serious conflict, however, did not surface until 1767, when the two sides 22 began to meet to discuss the next contract. On May 8, the deputies from Cordoba and Orizaba petitioned for changes in the terms of the 1765 contract, Referring obliquely to Galvez opposition to contract prices, the deputies declared bluntly that the 1765 prices did not permit them to earn a decent profit. Prices, they argued, had been set without adequate consideration of the effects of the ten percent deduction and the actual weight of mats and cords and without assessment of the new costs of registration and

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65 delivery of tobacco to the monopoly. The deputies traced the economic results of the harvests of 1765, 1766 and 1767 to illustrate losses suffered because of disease, insects, a 1756 hurricane and 1767 hail. Poor returns, they suggested, discouraged serious application to production. The deputies offered a number of proposals to Improve the next contract, They wished to raise the price of primera by 1/4 real per libra and the price of punta by 4 reales per arroba. They suggested a decrease in the deduction of ten percent for weight losses and in the deduction for the weight of mats and cords. Other proposals focused on changes in procedures 23 from planting to delivery. The petition caught the monopoly officials off guard. In their response to the deputies, directors Espinosa and Frago revealed that they possessed an incomplete understanding of costs and profits in the growing process. Indicating that prices had been established more or less according to custom, they Informed the viceroy that they had no detailed study of tobacco growing or of the contracts and hence had no clear rules to follow. They referred to "opinions" that the growers earned "more than moderate profits" and suggested that the planters improve their proposals with a more exact indication of their costs, using 100,000 matas planted as the base. Meanwhile the directors had ordered Real and the factoria officials in Cordoba and Orizaba to 25 report on the matter. Croix passed these materials to the fiscal, Velarde, for an opinion. Velarde recommended a detailed accounting of the economics of growing and suggested a method which monopoly officials could follow. The result of these actions was to translate the contract negotiations into a paper war, each side attempting to prove itself a victim. In a very detailed analysis of the costs of planting 100,000 matas of tobacco, the deputies claimed a profit of only 168 pesos. This sum, they indicated.

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66 27 was completely inadequate and provided no cushion against a bad year. The directors, initially without documentation, adopted a hard line toward the planters' complaints. In June they suggested an increase in the deduction for mats and cords from thirty to thirty-five libras per tercio, despite reports from the factors of Orizaba and Cordoba placing 28 the actual weight at twenty-eight to thirty and one-half libras. In July, the junta supported the directors' point of view. A report made up of several proposals for the terms of the new contract rejected the deputies' arguments and stated that the planters had earned "higher than normal" profits because the 1765 contract prices were excessive. The junta recoinmended lower prices for primera, segunda and punta, a deduction of thirty-five libras for the weight of mats and cords and a higher percentage deduction fifteen percent rather than ten percent for weight losses. They also suggested tobacco be delivered sixty days, rather than thirty, after being formed into tercios, and added a few provisions concerning inspections and prevention of fraud. To the planters' advantage, they proposed lowering the deduction for punta from thirty to twenty-two 29 libras and improving the payment of advances to cover planting costs. The junta's report was supplemented a few days later by a detailed attack by the directors against the deputies' accounting of the costs of growing 100,000 matas. Rejecting the figure of 168 pesos profit on 100,000 matas, the directors argued that the figure was actually 585 pesos, or sixty percent profit. More important than the numbers, however, was a revealing opinion of Espinosa and Frago on the priorities of the tobacco monopoly. The first concern of the Renta, they indicated, was to increase the income of the royal treasury. A second was to assure an adequate supply of good quality tobacco at fair prices to consumers. Third, the

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67 monopoly intended to protect the well-being of the planters and other workers in the tobacco industry. Under the current conditions of the 30 contract, they concluded, these priorities were being served. The deputies presented an extremely detailed rejection of the monopoly's position. Although admitting that current contract conditions permitted a moderate profit, they accused the directors and the junta of wishing to worsen contract terms. They defended the accuracy of their calculations on the cost of growing tobacco and accused the directors of being misinformed. They complained of inadequate advances and delayed payments, excessive concern for perfect bundling of the three classes of tobacco and lack of participation in preparation of the yearly register. The legitimate weight of mats and cords was about twenty-eight libras, they argued, not thirty and much less, not the thirty-five the Renta was proposing. Requiring sixty days rather than thirty for delivery of tobacco after bundling the terclos, they pointed out, not only delayed payments 31 but also caused the tobacco to lose weight from extra drying. The debate revealed a significant difference of opinion about the effects of the first contract. Unfortunately, there is no evidence as to the attitude or role of Real as Reconocedor in the negotiations. The decisive action on the issue came from Viceroy Croix, when on September 1, 1767 he ordered the directors to settle the contract. Expressing impatience with Espinosa and Frago for setting prices too low, Croix commissioned contador Mathias de Armona to prepare a list of prices for tobacco covering the five years before the establishment of the monopoly. He then suggested prices higher than these. The planters of Orizaba agreed to Croix's offer but those from Cordoba delayed. When the viceroy asked the Cordoba deputies if they preferred the prices recommended by Sebastian -, 32 Calvo several years earlier, Cordoba agreed to settle.

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68 33 On September 15, the deputies and the directors reported agreement 34 on a new contract which was to run for two years. The terms revealed that the planters had lost ground from the 1765 settlement. Prices were lowered from 3 1/4 reales to 3 reales per libra of primera and from 2 1/2 to 2 reales of segunda, while they remained at 1 real for tercera. The price of punta declined from 24 reales per arroba to 20 reales and the planters were required to deliver tobacco sixty days after bundling the tercios rather than thirty. Deductions for weight losses remained at ten percent and for mats and cords at thirty libras per tercio. The only "victories" for the planters were the reduction of the deduction for mats and cords for punta from thirty to twenty-two libras per tercio and a 35 promise of more prompt payment for tobacco deliveries. The contract was reported to Croix on September 26 as a "compromise." Contracts for Teusitlan and Jalapa were settled in October. Negotiations for the third and fourth contracts were free of disputes. Contract number three, a one-year extension of the 1767 agreement, OQ was signed in 1769. In 1770 the fourth contract was signed, a four-year settlement which raised the price of tercera from 1 to 1 1/8 reales per libra and the price of punta from 20 to 25 reales per arroba. It also 39 added a class called punta f ina at 2 reales per libra. Conflict in negotiations, however, again surfaced in 1773. Although Viceroy Bucareli finally accepted contract number five on the same conditions as number four, he refused to set a terminal date and indicated he would decide when the contract should expire. In 1777 Bucareli issued an order abolishing the gremio or comun de cosecheros thereby eliminating the election of deputies to negotiate contracts on behalf of the planters, a system which had been employed since 1765. The viceroy informed the planters that the current contract would expire with the 1778 harvest and

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69 future contracts would be arranged on an Individual basis. The planters, supported by their town councils ( ayuntamientos ) resisted this change, and expressed considerable hostility against Reconocedor Real. They petitioned for the reestablishment of the deputies and continuation of the previous contract. The monopoly, however, rejected all petitions, informed the growers that tobacco supplies were excessive and threatened to import tobacco from Louisiana. To back up its position, the Renta began planting 42 in Cordoba on its own account. A two-year contract was signed in which the monopoly assigned two different sets of prices to individual planters. Both sets reduced the prices of the previous contract. Primera was reduced from 3 reales per libra to 2 5/8 or 2 4/8; segunda from 2 reales to 1 3/4 or 1 5/8; tercera from 1 1/8 to 1 real for all planters; and punta from 43 22 reales per arroba to 20 reales. Negotiations for the seventh contract, in 1780, witnessed the development of serious conflict. In March, 1780, the new Viceroy Martin de Mayorga (1779-1783) ordered Real to arrange individual two-year contracts. At the same time, he directed Real to assign tobacco plantings on monopoly account for only one more year, to lower costs and to assure careful accounting to enable determination of the value of growing to the monopoly. Because of delays, however, the viceroy was forced to increase monopoly planting in May and to have Real assign to the ayuntamientos Immediately the number of matas the growers were to plant. According to Fonseca and Urrutla, "various 44 incidents" led to the separation of Real from the negotiations and his responsibilities were assumed by his lieutenant, Antonio Sobrevilla. Mayorga, however, decided to send the secretary of the viceroyalty, Pedro Antonio de Cossio, to negotiate the contract. Cossio was successful in arranging 45 a one-year settlement which raised the prices of primera, segunda and punta.

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7.0 A royal order of October 17, 1781 approved the 1780 contract and ordered discontinuation of tobacco planting on monopoly account because it was not profitable. More importantly, the Crown ordered the immediate reinstatement of Real, with the full powers of his position. Before the royal order was received in New Spain, however, the viceroy had sent Phelipe del Hierro, now director of the monopoly, to the growing areas to negotiate the eighth contract. Hierro objected to his commission, pointing out to Mayorga that he was the person most resistant to the planters' demands and therfore least likely to achieve a settlement. Mayorga accepted Hierro 's position and again appointed Cossio to go to the growing areas to negotiate the contract. Contract number eight, a five-year settlement, was signed on June 20, 1781. Prices were raised to 3 reales per libra, 2 reales and 1 real for primera, segunda and tercera, respectively, and to 22 reales per arroba for punta. A royal order of March 1, 1782 rejected the five-year term of the contract, stating that it would be left to the discretion of the Crown. The order also overturned one of the articles of the contract, a provision which would have excluded Real from tobacco inspections. The article was declared 49 ^ offensive to royal authority. According to Calderon Quijano, this article resulted from the influence of Cossio on the planters. The planters resisted the royal order with petitions to annul the 1781 contract. Hierro, the fiscal Ramon de Posada and the viceroy rejected the petition, and 51 they were supported in the royal order of July 10, 1783. The 1781 contract remained in effect until 1786. The growers were permitted to send deputies to negotiate a new contract, but their efforts were unsuccessful. Viceroy Conde de Galvez (1785-1787) ordered individual five-year contracts, and the prices he ordered marked the beginning of a stable price arrangement which would survive until the economic breakdown

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71 following the 1810 rebellion. Some of the planters signed for two years, CO ending with the 1788 harvest. Others signed for five years, to 1791. Prices were set at 3 reales per libra, 2 reales and 1 real for primera, 53 segunda and tercera, respectively, and at 24 reales per arroba for punta. In 1788 disputes arose over reduction of plantings for the Cordoba and Orizaba planters whose contracts expired that year. Before any settlement could be achieved, Real died on February 18, 1789. The director, Hierro, then recommended the abolition of Real's position and the viceroy agreed in March. The factors of Cordoba and Orizaba took over Real's 54 functions. New contracts, based on 1786 prices, were signed in 1790, 1791,^^ 1794, 1796, 1801 and 1807.^^ Contract negotiations in 1806 witnessed planter demands for a restoration of the 1755 prices because of the inflation caused by war. The monopoly refused, planted tobacco on its own account and saved 55,580 pesos. In 1807 the planters agreed to the 1786 prices. The second major problem confronting the tobacco monopoly in its efforts to organize the growing sector was to determine in what regions to plant tobacco. When the monopoly expanded the 1764 royal order by adding Jalapa to Cordoba, Orizaba and Teusitlan as part of the legal growing region in New Spain, the establishment of Jalapa as a factoria indicated a degree of permanence in the decision. At the same time that the factor las were being created, however, Espinosa was already proposing changes in the growing regions. His point of view, supported by Real, revealed the importance which would be placed on the organization of the monopoly's resguardo or guard system, in determining where tobacco should be groi;m.^ At the request of the junta de tabaco, Espinosa and Sebastian Calvo journeyed to Cordoba, Orizaba and Teusitlan in May, 1765, to survey the

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72 59 region and to determine the needs of a resguardo system. Their subsequent report to Viceroy Croix revealed Espinosa's concern with organizing the growing area in accordance with the capacity of the resguardo to prevent contraband. In describing the geographical layout of the region, Espinosa and Calvo noted that the mountainous terrain of Cordoba and Orizaba provided an easily-guarded enclave. Teusitlan and Jalapa, by contrast, were open territory, difficult and expensive to guard, even with a mobile police force (ronda volante) If Cordoba and Orizaba could supply the colony, they suggested, it would be prudent and economical to prohibit -,-, 60 planting m all other areas. The deputies elected by the growers of Teusitlan, Agustin Mallol and Joaquin Martinez, did not share the director's attitude. In February, 1765 they had submitted a petition to Spain and to the viceroy and junta in New Spain complaining of efforts by the deputies from Cordoba and Orizaba to denigrate tobacco from Teusitlan, probably in an effort to push their own prices up. The Teusitlan deputies requested the appointment of experts to inspect and compare tobacco from Teusitlan, Cordoba and Orizaba and to report their findings to the King. Admitting that the best tobacco from Cordoba and Orizaba was superior to Teusitlan tobacco, they argued that tobacco from Huatusco and Coscomatepec in Cordoba and from Songolica in Orizaba was of the same quality as Teusitlan 's leaf. The 1765 contract, however, awarded higher prices to all planting regions in Cordoba and 61 Orizaba. In their representation to Spain, the deputies stressed the poverty of Teusitlan and the importance of tobacco planting to their economic well-being. Arriaga sent the petition to Espinosa, ordering a response. Espinosa, noting that he had received the same petition, flatly rejected the deputies on several grounds. Teusitlan tobacco was inferior to the Cordoba

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73 and Orizaba product, a fact well-recognized by established experts, Tobaccogrowing in Teusitlan was a recent development, partly explaining its lesser quality. The King's orders explicitly demanded the best quality tobacco to be grown for the monopoly, to guarantee the satisfaction of consumers. Referring to his May visit to the growing regions, Espinosa again pointed to the difficulty of guarding against contraband in Teusitlan. The same was true for Jalapa, an area whose production was meagre and of poor quality. He recommended abolition of planting in Jalapa when the current contract expired. In general, he argued, growing should be disallowed in those areas producing inferior tobacco and difficult to guard. Cordoba and Orizaba, including the Songolica region, could provide an adequate supply of tobacco for the colony and experts agreed that it was the best 64 tobacco in New Spain. The Teusitlan issue was not raised seriously again until the negotiations for the 1767 contract. In June, the fiscal, Velarde, gave an opinion recommending the complete abolition of planting in Teusitlan and Jalapa. The junta, however, decided upon only a partial restriction and agreed to allow tobacco growing in Jobo in Teusitlan and Coatepec in Jalapa 6 S for the duration of the 1767 contract (see Figure 2) Espinosa noted that the junta had opposed planting in Teusitlan from the beginning of the monopoly and had actually proposed its elimination several times. Only the protests of the planters had convinced the junta to continue planting in the two areas in 1765 and, again in 1767, when only Jobo and Coatepec were permitted to plant. Espinosa continued his opposition to tobacco growing outside Cordoba and Orizaba. By 1769 reports of contraband had convinced him of the necessity of limiting the growing zone. Despite the presence of guards

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74 117 W\ ROWING REGION 1769 Source: Calderdn Quijano, Carlos HI I / in 01 Ml •H

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75 In Teusitlan and Jalapa, contraband was rampant, causing monopoly Income to decline or remain low in the bishoprics of Oaxaca, Puebla and Veracruz. This evidence, he declared, made abolition of planting in Jobo and Coatepec 67 imperative. By 1769, however, Espinosa was prepared to limit growing even further than in 1767. Using reports from Real, he argued that planting in Huatusco and Coscomatepec in the factoria of Cordoba should also be prohibited. These areas could not be guarded effectively because of their distance from the major guardposts. Moreover, the fields were open and the people displayed a "propensity" for contraband. These lands should be converted to corn, beans and other vital crops. Songolica, in the jurisdiction of Orizaba, could produce the tobacco currently provided by Coscomatepec and Huatusco. Croix agreed with Espinosa and elected to extend the 1767 contract for one year, to permit time for gradual change and for consultation with Spam. In preparation for the 1770 contract negotiations Espinosa, actively supported by Real, again raised the issue of abolishing planting in Jobo and Coatepec. Repeating his earlier arguemnts, he declared that contraband, combined with the low yields of Jobo and Coatepec, continued to lower the monopoly's income. Real supported Espinosa' s reasoning on the entire matter. Jobo and Coatepec, he pointed out, cost too much to guard in relation to their yield. Huatusco and Coscomatepec, although in the jurisdiction of Cordoba, were too distant for effective control. The planters in these four areas, and particularly in Jobo and Coatepec, were notorious contrabandists, causing a decline In monopoly revenues in Puebla and Oaxaca. Referring to the large volume of seizures in Veracruz, Puebla and other areas. Real declared Jobo and Coatepec to be impossible to guard. The guards, moreover, lived "in the hands of death" in the

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76 areas, fearing for their lives to the extent that they could not carry cut their responsibilities properly. Since tobacco was a recent crop in the area the argument that the growers had no other means of livelihood was not valid. The best solution, he concluded, was to abolish all planting in Jobo, Coatepec, Huatusco and Coscomatepec. The directors offered other reasons for their opposition to planting / 72 xn Teusitlan and Jalapa. They complained that the high costs of maintaining two factorias, with their respective officials and guards, were not compensated by their output. Some growers could convert to corn, beans and other crops, while others could go to Cordoba and Orizaba to 73 continue as planters. Real was also unsympathetic to the position taken by representatives of the areas outside Cordoba and Orizaba, as revealed in his response to a petition from the alcalde mayor of Teusitlan. The restriction of planting in Teusitlan to only Jobo, the alcalde mayor argued, caused a general decline in the area, leading to shortages, decreased Income and deterioration of the farms. The changes in tobacco planting, Real countered, had nothing to do with the economic decline. Any problems were the consequences of the residents' lack of application to crops other than tobacco, as indicated in their serious application to contraband. The income of the Renta declined in Puebla and Oaxaca as a result of their activities. The cause of Teusitlan' s economic difficulties was the "idleness, vagrancy and iniquitous behavior" of the inhabitants. Croix was convinced by the monopoly's arguments. On May 15, 1770 he ordered the abolition of all planting in Jobo and Coatepec in Teusitlan and Jalapa and in Huatusco and Coscomatepec in Cordoba. Planters in Huatusco and Coscomatepec were permitted to consult with Real concerning permission to grow tobacco in other parts of Cordoba. Teusitlan and

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77 Jalapa were placed under the same restrictions as other prohibited 75 areas. To complete the change in growing regions, the monopoly also adjusted the administrative and resguardo systems. The factoria of Puebla absorbed the factorias of Jalapa and Teusitlan, changing them to administrations under Puebla 's jurisdiction. The administration of San Juan de los Llanos was separated from Jalapa 's immediate jurisdiction and placed under the control of Puebla. The factor of Jalapa, Antonio Primo de Rivera, became administrator of the new administration of Jalapa. The contador of Jalapa, Francisco Maniau y Ortega, was appointed oficial mayor of the contaduria in the factoria of Puebla, The factor of Teusitlan, Francisco Sabariego, became visitador of one of the two resguardo rondas into which the resguardo of Teusitlan was to be dividied. The contador of Teusitlan, 7 f\ Josef Reyes, became administrator of the administration of Teusitlan. The monopoly also altered the resguardo in the growing areas to conform to the new administrative system. In Teusitlan the resguardo was divided into two units, one headed by the former factor, Francisco Sabariego, as visitador with four guards and the other by teniente Miguel Rodriguez, with three guards, Jalapa continued with five resguardo personnel, headed by teniente Josef Joaquin de Acosta. No changes were made in Puebla, although the resguardo from that factoria were given some powers in Teusitlan and Jalapa, Reconocedor Real, who doubled as jef e de resguardo in the growing areas, continued his jurisdiction over Teusitlan and Jalapa as well as over Cordoba and Orizaba. Shortly after Croix's order to abolish growing in Teusitlan and Jalapa, he awarded Real a formal title outlining his powers and responsibilities as Reconocedor and as commander of the resguardo. As commander. Real was authorized to nominate all his subordinates

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to the directors of the monopoly and to hear all cases involving crimes 70 by his resguardo, in and out of duty. The factors of Cordoba and Orizaba were required to obtain Real's approval in any decisions related to resguardo or Reconocedor jurisdiction. Real received broad powers to police contraband activities in any of the real hacienda branches, although the tobacco monopoly was his major responsibility. He was authorized to inspect the tobacco fields, stores, warehouses and processing buildings, and with viceregal approval he could also exercise his powers outside 79 Cordoba and Orizaba, Finally, he was allowed to carry firearms. The directors were pleased with the immediate savings from the change in growing areas. The monopoly saved 850 pesos in Jalapa and 1,423 in Teusitlan. Increased resguardo costs of 1,100 pesos, however, reduced total annual savings to 1,173 pesos, without considering the economic 80 benefits which would result from the improved resguardo system. The planters of Teusitlan and Jalapa petitioned against the decision to abolish growing in their areas, but the directors informed them that all actions .. -, 81 were fxnal. The 1770 changes were not the final settlement of the acceptable planting zone. On August 31, 1772 the fiscal, apparently in response to a petition from Huatusco, recommended that Huatusco be permitted to grow tobacco. The viceroy agreed to consider the matter, and the directors requested a delay while Francisco Diaz, the factor of Cordoba, studied the petition more carefully. Diaz prepared a map of the area and reported that it could grow eight or nine million matas without inordinately high resguardo costs. The directors agreed with Diaz and recommended to 84 Bucareli that the petition be accepted. Real concurred, suggesting a minimum planting of four million matas to offset resguardo costs and re85 questing assurances of tobacco quality generally equal to that of Cordoba.

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79 Bucareli approved of the decision and ordered Huatusco's inclusion in the next contract, On October 12, 1773, Cordoba, Orizaba, Songolica and Huatusco signed a tobacco contract, thereby establishing, after nine years, the Cuatro Villas often reported in secondary sources on the tobacco monopoly. These four districts, named after their principal towns and 88 referred to by monopoly officials as the Villas, continued to make up 89 the growing zone until the end of the colonial period (see Figure 3) In addition to domestic supplies, the tobacco monopoly received tobacco from Louisiana. As early as 1771 Galvez had noted the favorable disposition of consumers toward Louisiana tobacco and had commented on its 90 lower price compared to tobacco from the Villas, Havana or Caracas. He 91 recommended that the monopoly import tobacco from Louisiana regularly. In 1776 the Crown ordered the tobacco monopoly to begin importing tobacco from Louisiana for the purpose of encouraging economic development in 92 that colony. The monopoly also sent experts from Cordoba and Orizaba to teach tobacco growing, processing and packing techniques to the Louisi93 ana planters. In 1785 the audiencia of Mexico reported to Spain that consumers disliked Louisiana tobacco and that the monopoly suffered great losses in the transport and storage of the leaf. Viceroy Manuel Antonio Florez (17871789) made a similar report in 1788 when he learned of the plans of Natchez planters to send tobacco in barrels, which would increase costs of removing the rolls ( andullos ) Acting on complaints from the directors, in 1789 the viceroy ordered the immediate suspension of tobacco imports from Louisiana, until the King could be consulted. Officials had received a report on tobacco imports from 1778 to 1788 indicating an average loss of 95 twenty-six percent from spoilage and from losses during transport. In 96 1790 the governor of Louisiana suspended tobacco exports to New Spam.

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80 QUATRO VILLAS 0) S-i 60 •H Source. AGN, Renta,vol. 43

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81 A royal order In 1790 indicated that the monopoly would purchase the 1790 harvest and from January 1, 1791 only 40,000 libras would be purchased each year, for export to Spain, Another royal order of 1791, however, ordered that tobacco exports from Louisiana cease altogether as of January 97 1, 1792. The purchase and sale of Havana snuff was also part of the tobacco monopoly's operation. First-class snuff, called esquisito was purchased 98 at 6 reales per libra and sold at 20. Second-class snuff, called fino was prepared in Mexico by mixing Mexican tobacco with esquisito from Havana, Its similarity to first-class Havana snuff, however, facilitated fraud, and fino was abolished in 1775. Third-class snuff, called comun 99 was prepared from deteriorated tobacco in Mexico. In 1784 Francisco Casasola agreed to pay 2,000 pesos a year for the right to produce a new class of snuff, referred to as superior de nueva fabrica using some esquisito from Havana. Its price was higher than the Havana import, sales were low and the monopoly suffered losses. Sales of Casasola 's snuff appear for the last time in the monopoly accounts of 1797, The third major problem concerning the establishment of the growing sector was the determination of how much tobacco to produce and how much to keep on hand. Maintaining adequate supplies was regarded as one of the most vital responsibilities of the directors, because the success of the monopoly depended upon meeting consumer demand. A dispute among the top officials of the monopoly over tobacco supplies began in 1766. The contador, Phelipe del Hierro, wished to increase tobacco plantings from the expected annual yield of 10,000 to 11,000 tercios because he regarded this quantity as inadequate to supply the monopoly. The directors, on the other hand, favored a reduction in plantings because they

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82 102 wished to avoid a tobacco surplus. Despite warnings and the presentation of Hierro's accounts, the directors reduced plantings in 1161 1768, 104 and again on April 26, 1769, to only 6,000 tercios. The matter came to a head on November 3, 1769, when Hierro reported an impending tobacco shortage to the viceroy. Responding to Francisco del Real's recent reports of a small harvest expected in the Villas, Hierro informed Croix that it was his duty to bring the matter to his attention. In taking this action, Hierro exposed the long-running dispute between himself and the directors and provided new ammunition for attacks against the directors of the monopoly. Hierro had not responded immediately to the April, 1769 order to plant only 6,000 tercios, he explained, because it was a clear statement that he had been unable to convince the directors of his point of view. In issuing the order they had not even requested a simple report of supplies on hand, indicating what Hierro referred to as a "permanent state of mind" on the matter of supplies. In October, however, Hierro decided to act. He submitted an account to the directors reporting that tobacco stocks would be depleted by mid-1771, leaving none for July through September of that year. The recent opening of the Mexico City factory, moreover, would probably exacerbate the shortage. He advised strongly that the 106 directors increase plantings. Although Espinosa responded to Hierro's report by agreeing to increase plantings to 13,000 to 14,000 tercios in Cordoba and Orizaba, he also requested additional documentation in order to prove that Hierro was in 1 oft error about tobacco supplies. On October 23, however, Real reported that the 13,000 to 14,000 tercios could not be harvested because the order 109 for the increase arrived too late in the year. It was shortly after receiving this letter that Hierro submitted his November 3 letter to the

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83 viceroy. Hlerro, refusing to accept responsibility for any shortages, traced the background of his disagreement with the directors and explained 110 his frustration at having his reports rejected. Croix passed his correspondence to the fiscal, Jose Antonio Areche. Unable to ascertain the validity of Hierro's arguments, Areche recommended that Croix prepare .. Ill for a shortage and immediately obtain a report from the directors. The directors refused to accept Hierro's assessment of the situation. Offering his own figures, Espinosa explained his concern for avoiding excessive supplies which might spoil in the warehouses. The April, 1769 decision to reduce plantings to 6,000 tercios, he noted, was based on Real's reports of an expected higher than normal harvest. When Hierro wrote to him in October, six months later, he had responded by immediately increasing 112 plantings to avoid the shortage Hlerro predicted for 1771. Co-director Frago, in a separate letter, indicated his agreement with Espinosa on the need to avoid surpluses that might spoil. He believed, however, that Espinosa had erred in the April, 1769 order to decrease plantings. Espinosa had ordered the reduction during Frago 's absence, and he did not become aware of the change until Hierro sent his report in October. Frago argued that Hierro should have acted sooner, to avoid having to trouble the viceroy. He did not accept the statements made in Hierro's November 3 letter to Croix, believing that Hierro's fears were unjustified and Indicated "panic," because there would be no shortage of supplies. Frago also suggested that Hierro was merely conjecturing, since he did not know the 113 yield of the current harvest. After receiving documentation from Espinosa on earlier orders con114 cerning planting, Croix again consulted Areche. Areche requested additional information from the monopoly. Frago then reported that Espinosa 's error in ordering only 6,000 tercios resulted from his belief

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84 that the harvest would be larger than actually occurred, presumably based on Real's reports.'''''" A little later, in March, 1770, Hierro accused Espinosa of misusing his accounts and supplied a new set of figures to Indicate supplies would run out by October, 1771. Part of his argument was based on a recent report from Real that the current harvest would be 117 no more than 8,000 tercios. Areche was impressed by Hierro 's figures. They provided, he noted, a "clear demonstration of the serious damage 118 threatening the Renta and the Kingdom." The arguments of Espinosa and Frago did not conform to the facts, the fiscal declared, and it was imperative that the directors and Hierro offer proposals on how to best avoid the shortage. After offering his own suggestions, Areche recommended that Croix order the directors to be more vigilant by obtaining proper data from the contador when determining yearly plantings. To clear Croix of any responsibility in this matter, he also urged the viceroy to order Espinosa and Frago to send personal accounts to Spain to explain the 119 causes of the shortage. In response to Areche' s recommendation, Hierro proposed that the monopoly purchase tobacco from Havana, Guatemala, Santo Domingo, Caracas or Louisiana. Frustrated by Espinosa' s continued intransigence, but pleased with Frago 's acceptance of the impending shortage, Hierro noted that Real's latest report indicated an even smaller harvest for the current year, 6,000 tercios rather than 8,000. Espinosa, he continued, had to be convinced of the seriousness of the situation. The monopoly was going to have to purchase about 1,500,000 libras of leaf tobacco, and the shipments 120 would have to begin arriving by November of the current year. Upon receiving Hierro 's letter, Croix called a junta of the principal tobacco monopoly officials, the fiscal, the asesor of the monopoly, and

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85 Galvez' subdelegate,''"^'^ Both Hierro and Espinosa presented their views on the matter/^ and the junta agreed, with the exception of Espinosa, that Hierro 's warnings of a 1771 shortage were valid. The junta recommended three courses of action. First, the monopoly would not wait sixty days for delivery of tobacco after it was formed into tercios ^j^Second, the Renta would use the poorer quality tobacco, known as zacate Third, tobacco would be purchased from outside New Spain, 500,000 libras from Havana and, if necessary, Santo Domingo, and 500,000 libras from Caracas, The tobacco 123 should be received in Veracruz by November, 1770. Although the immediate problem was resolved by the junta, the higher officials in the colony did not regard the matter as completely settled. First Croix, then Areche and Galvez, called for the removal of Espinosa and Frago as directors of the monopoly. Almost immediately, Croix wrote to Arriaga to notify him of the junta's decisions. He accused the directors of disobeying previous orders from himself and the junta concerning rama supplies to be maintained on hand, of giving orders without his authorization, and of disregarding Hierro 's accounts. The documentation on this issue, Croix argued, should convince the minister of the need to remove the directors; otherwise, the monopoly would be risking continued mismanagement. Croix advised Arriaga that he would have removed Espinosa and Frago if he had alternative employment for them, since he was extremely perturbed by their "pernicious system" of disobeying his orders. Until other measures 124 could be taken, he concluded, he would act as the director of the monopoly. Areche noted how Frago 's acceptance, and Espinosa 's denial, of the shortage were "another" example of the inability of the two men to work together. They were always disagreeing, and since neither was able to

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86 do a competent job alone, the monopoly was not progressing as it should. The shortage was unnecessary, resulting from lack of foresight and disregard for Hierro's warnings. Areche expressed "little confidence" in the directors because of their "continuous discords." Unless they were 125 removed, the tobacco monopoly would not advance. Galvez also advised that the directors be dismissed and gave his reasons. When he arrived in 1765, not only was the monopoly in disarray but Espinosa had violated royal orders by leasing the monopoly. Only by imposing his authority had the monopoly been established on a sound footing. It had been agreed that it was necessary to maintain a two-year supply of rama on hand, to offset losses from bad years, usually one in five, and to allow for the large distances to deliver the crop after June or July each year. Mentioning only delays in sending tobacco to the Provincias Internas, Galvez declared that he and the viceroy, often with the fiscal, had made repeated orders to improve the monopoly. The directors, however, had resisted, and in doing so had attempted to "destroy the Renta, or at least to ,,126 delay its rapid progress. y Although not mentioned in this letter to Croix, Galvez expanded on the list of grievances against the directors in his 1771 Informe to Bucareli. He complained of the excessive prices of the 1765 contract, when Espinosa was director and Frago contador. He noted their "constant and ostentatious" opposition to the factory, which had earned profits of fifty percent. Their decisions to reduce snuff prices in Durango and the Provincias Internas, without authorization, and to reduce the duty on snuff in Veracruz from 20 to 12 reales had both damaged monopoly income, The latter action had opened the door to private imports of snuff, thereby 127 limiting monopoly sales, The tobacco shortage, however, was by far the most serious error committed by the directors. Like Croix, Galvez

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87 declared that they had abused their authority and exposed the monopoly to a total loss of income. Like Areche, he regarded the "scandalous" discord of the directors as inimical to the progress of the monopoly. Their continued presence, Galvez argued, would impede efforts to establish the monopoly under royal administration, since their record indicated they were opposed to administration. Because he saw no hope for improvement in the future, Galvez recommended they be removed and replaced by the contador, Hierro, the treasurer, Echeveste, and the administrator 1 7R general, Huarte. On August 1, 1770, Croix appointed Hierro, Echeveste and Huarte as co-directors with Espinosa and Frago. The three men continued to exercise their offices as contador, treasurer and administrator general, respectively, but all decisions by Espinosa and Frago were to be cleared through them. Croix explained his decision as a temporary arrangement, until he could 129 receive further instructions from Spain. The conflict over the establishment of the growing sector in the early years of the monopoly dissipated in the 1770' s and all but disappeared in the 1780' s, as rama sales declined in proportion to the growth of production of labrados. In 1770, for example, the monopoly sold 2,012,750 130 -'-^^ libras of rama to consumers; by 1784 sales were only 276,811 libras, because labrados had replaced rama in the sales figures of the monopoly. The significance of contract negotiations, however, should not be ignored, even though price stability was achieved by the 1780' s. Tobacco contracts were always one of the key cost factors to be considered by the monopoly in its continual struggle to expand revenues in the latter eighteenth century. Fonseca and Urrutia referred to the planting and contract negotiations as the "cement" of the monopoly's progress. In the same sense

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that a business enterprise attempted to minimize costs, they pointed out, 132 the monopoly attempted to keep tobacco prices low in the contracts. Although as a monopoly the Renta could determine price levels to a considerable extent, it was limited somewhat by traditional practices. The single most important limitation, and certainly a traditional practice, was the ever-present possibility of contraband. If the price of rama were set too high in relation to the price at which it could be sold by planters, both contraband planting and purchasing became more attractive. As the manufacturing sector expanded, moreover, the monopoly was forced to consider the possibility that consumers would turn from monopoly labrados to rama if the price of labrados became too high. The monopoly was aware of the economic reality of its position. Galvez desire to develop the factories was undoubtedly affected by his recognition of the lim.itations 133 of earnings from rama sales alone. The issue of rama versus labrados, apparently resolved by the royal order of October 24, 1767, did not die with the establishment of the factories under monopoly administration. The context of the problem, however, was altered by developments in the last decades of the eighteenth century. NOTES 1. February 21, 1765, Testimonio de contrata de las villas de Cordova y Orizava para las cosechas de tavacos de los anos de 1765, 1766 y 1767, AGN, Renta, vol. 8, fols. 2-5. 2. February 21, 1765, Testimonio de contrata 1767, AGN, Renta, vol. 8, fols. 5v-6. 3. An arroba is equal to 25 libras.

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89 4. The weight of a tercio varied according to the class of tobacco and the number of manojos, 1767 calculations indicated the average weight of a tercio of primera class rama weighed 187.5 libras gross; segunda weighed 162.5 libras gross; and tercera weighed 137.5 libras gross. Deputies of Cordoba and Orizaba to Croix, May 26, 1767, AGN, Renta, vol. 8, fols. 22v-25. 5. Referred to as "buen peso o caida." 6. Referred to as "mermas y enjugo." 7. February 21, 1765, Testimonio de contrata 1767, AGN, Renta, vol. 8, fols. 6~6v. 8. February 21, 1765, Testimonio de contrata 1767, AGN, Renta, vol, 8, fols. 6-7. 9. February 21, 1765, Testimonio de contrata 1767, AGN, Renta, vol. 8, fol. 7. 10. February 21, 1765, Testimonio de contrata 1767, AGN, Renta, vol. 8, fol. 7, 11. Galvez Inf orme p. 23. 12. Cruillas to Arriaga, July 18, 1765, AGN, Renta, vol. 8, fols. 16-17, 13. Hierro to Croix, August 20, 1767, AGN, Renta, vol. 8, fols. 6162; Fonseca and Urrutia, vol. 2, 369. 14. See Chapter Two, note 36. 15. Fonseca and Urrutia, vol. 2, 373. 16. Galvez, Inf orme pp. 22, 29. 17. Ibid., pp. 33, 43. 18. Croix to Arriaga, February 28, 1768, AGN, CV, vol. 15, fol. 31; Galvez, Inf orme p. 43, notes that a royal order of June 22, 1768 approved Croix's decision. 19. Galvez, Inf orme p. 29. 20. The first contract (1765) provided for thirty days. 21. Francisco del Real to Galvez, December 2, 1771, in Galvez, Inf orme Appendix 1, pp. 161-165. 22. Croix to Arriaga, September 22, 1766, AGN, CV, vol. 11, fols. 63-64, mentioned that the planters complained of low prices.

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90 23, Deputies of Cordoba and Orizaba to Croix, May 8, 1767, AGN, Renta, vol, 8, fols. 18-21, 24, Espinosa and Frago to Croix, May 14, 1767, AGN, Renta, vol. 8, fols. 21-21V. 25, Espinosa and Frago to Croix, May 14, 1767, AGN, Renta, vol. 8, fols, 21-21V, 26, Juan Antonio Velarde to Croix, May 19, 1767, AGN, Renta, vol. 8, fols. 21v-22v. 27, Deputies of Cordoba and Orizaba to Croix, May 26, 1767, AGN, Renta, vol. 8, fols. 22v-25. 28, Espinosa and Frago to Croix, June 11, 1767, AGN, Renta, vol. 8, fols. 25v-26. The factor of Orizaba, Bernardo Maria de Mendiola, to Croix, June 5, 1767, AGN, Renta, vol. 8, fols. 26-28, and factor of Cordoba, Francisco Diaz, to Croix, June 4, 1767, AGN, Renta, vol, 8, fols. 28-28v, Espinosa and Frago may not have seen the reports. Galvez Informe, p. 22 in 1771, however, stated that a weight of thirty libras was too low for mats and cords but added that the 1765 contract did not consider weight loss from the deveining of tobacco leaves. 29, Junta to Croix, July 14, 1767, AGN, Renta, vol. 8, fols. 34-35. 30, Espinosa and Frago to Croix, July 18, 1767, AGN, Renta, vol. 8, fols, 36-39. 31, Deputies of Cordoba and Orizaba to Croix, July 24, 1767, AGN, Renta, vol. 8, fols. 39v-48. 32, Calderon Quijano, Carlos III vol. 1, 336. Croix to Directors, September 1, 1767, AGN, Renta, vol. 8, fol. 70, ordered settlement of the contract and mentioned a "plan," probably the price proposals referred to by Calderon Quijano. 33, Espinosa, Frago and the Deputies of Cordoba and Orizaba to Croix, September 15, 1767, AGN, Renta, vol. 8, fols. 57v-59, 71-72. 34, Croix to Directors, September 16, 1767, AGN, Renta, vol. 8, fol. 59, 35, Espinosa, Frago and the Deputies of Cordoba and Orizaba to Croix, September 15, 1767, AGN, Renta, vol. 8, fols. 57v-59, 71-72. 36, Espinosa, Frago and the Deputies of Cordoba and Orizaba to Croix, September 15, 1767, AGN, Renta, vol. 8, fols. 59v-60. Fonseca and Urrutia, vol. 2, 374, offer September 22, 1767 as the date of the contract. 37, Teusitlan and Jalapa will be discussed below.

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91 38. Bernardo Ma,ria de Mendiola and Rafael Garcia, November 16, 1803, Pliego que cont.tene la recopilacion, o resumen de las Contratas, que la Real Renta del Tabaco de N,E. ha celebrado con los Cosecheros de este fruto de la Jurisdiccion de esta Villa de Orlzava, desde su ereccion que fue el ano pasado de 1765, hasta el de 1801, AGN, Ramo, vol. 88, fol, 12 6v. 39. Mendiola and Garcia, November, 16, 1803, Pliego, AGN, Ramo, vol. 88, fols. 126V-127. 40. Mendiola and Garcia, November 16, 1803, Pliego, AGN, Ramo, vol. 88, fol. 127. Fonseca and Urrutia, vol. 2, 377. 41. Calderon Quijano, Carlos III vol. 2, 152; Arcila Farias, Reformas economicas vol. 1, 126-127; Fonseca and Urrutia, vol. 2, 377378, I did not encounter documentation on the source of discontent with Real, 42. Ibid ; Mendiola and Garcia, November 16, 1803, Pliego, AGN, Ramo, vol. 88, fol. 127. 43. Mendiola and Garcia, November 16, 1803, Pliego, AGN, Ramo, vol. 88, fol. 127. 44. Fonseca and Urrutia, vol, 2, 378-380; Calderoli Quijano, Carlos III vol, 2, 152-153, refers to "conflict" but offers no reasons for Real s removal 45. Mendiola and Garcia, November 16, 1803, Pliego, AGN, Ramo, vol. 88, fol. 127v; Fonseca and Urrutia, vol. 2, 378-380. Cossio was appointed by Galvez as secretary of the viceroyalty and intendant with supervisory powers over all revenue affairs. Galvez was using Cossio in an experiment, He had planned to create a special superintendent of real hacienda affairs independent of the viceroy once he could appoint his brother, Matias, as viceroy, Bucareli, however, died in office and was replaced by Mayorga, who came from Guatemala. Galvez then appointed Cossio on August 14, 1779, removing certain real hacienda powers from Mayorga. Cossio served in his special position until March, 1782, greatly disrupting real hacienda affairs and provoking resentment among numerous officials. Brading, Miners and Merchants pp. 61-63. 46. Mendiola and Garcia, November 16, 1803, Pliego, AGN, Ramo, vol. 88, fol, 129. The monopoly planted on its own account in 1778, 1779 and 1780. 47. Calderon Quijano, Carlos III vol. 2, 152-155. 48. Fonseca and Urrutia, vol. 2, 380-382, Mendiola and Garcia, November 16, 1803, Pliego, AGN, Ramo, vol, 88, fol. 127v, give June 7, 1781 as the date of the Orizaba contract. 49. Fonseca and Urrutia, vol. 2, 380-382.

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92 50. Calderon Quijano, Carlos III vol, 2, 156, 51. Fonseca and Urrutia, vol. 2, 380-382. 52. Ibid 382-383; Mendiola and Garcia, November 16, 1803, Pliego, AGN, Ramo, vol. 88, fol. 128. 53. Mendiola and Garcia, November 16, 1803, Pliego, AGN, Ramo, vol. 88, fol. 128v, note that these contracts added primera and segunda roto (broken) at 2 7/8 and 1 7/8 reales per libra, respectively. In 1790 punta fina was added, at 1 1/2 reales per libra. 54. Fonseca and Urrutia, vol. 2, 383, 386. The royal order of July 10, 1790 approved of the viceroy's action, 55. Ibid 384; Mendiola and Garcia, November 16, 1803, Pliego, AGN, Ramo, vol. 88, fols. 127v-128. 56. Mendiola and Garcia, November 16, 1803, Pliego, AGN, Ramo, vol. 88, fol, 128v; Calderon Quijano, Carlos IV vol. 2, 251. 57. Calderon Quijano, Carlos IV vol, 2, 251. 58. The establishment of the monopoly required abolition of tobacco planting in certain areas of the colony. Fonseca and Urrutia, vol. 2, 368-369, and Espinosa to Croix, February 28, 1769, AGN, Renta, vol. 8, fol. 85, both mention Tepic, Compostela, Tehuacan, San Juan de los Llanos, Huachinango and "others." Humboldt, vol. 3, 39, mentions important areas in the Intendancy of Guadalajara. In a letter from Croix to Arriaga, June 20, 1768, AGN, CV, vol. 12, fol. 210, Croix notes that he rejected petitions from the Bishop of Guadalajara to grow tobacco in the Costa del Sur, where tobacco had been grown before the monopoly was created. 59. Fonseca and Urrutia, vol, 2, 368-369; Galvez Inform e, p. 24. 60. Espinosa and Calvo to Croix, June 10, 1765, AGN, Renta, vol. 8, fols. 13-14. 61. Mallol and Martinez to Croix and Junta, February 11, 1765, AGN, Renta, vol. 8, fols. 78-78v. 62. Mallol and Martinez to King, February 11, 1765, AGN, Renta, vol. 8, fol. 78, 63. Arriaga to Espinosa, September 1, 1765, AGN, Renta, vol. 8, fol. 78. 64. Espinosa to Arriaga, April 7, 1766, AGN, Renta, vol. 8, fols. 79-79v. Ernesto Lemoine Villacana, estudio preliminar, notas y apendice, "Documentos y mapas para la geografia historica de Orizaba (1690-1800)," Boletin del Archivo General de la Naclon 2nd ser. vol. 3 (1962), 466-470, states that Orizaba became, after 1728, a major center of tobacco production in New Spain. The Jalapa fair was moved to Orizaba from 1724 to 1728,

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93 but was moved hack to Jalapa because of protests from the Consulado of Mexico, Tobacco developed after the fair moved back to Jalapa, and slowly replaced sugar as the principal agricultural activity in the Orizaba area, 65. Extracto de los antecedentes que han occurido sobre la extincion de siembras de los partidos de Teusitlan y Xalapa, AGN, Renta, vol. 8, fols. 148-148V. (No author or date). 66. Espinosa to Croix, February 28, 1769, AGN, Renta, vol. 8, fols. 85-86; Fonseca and Urrutia, vol. 2, 369, support this statement by Espinosa. 67. Espinosa to Croix, February 28, 1769, AGN, Renta, vol. 8, fols. 85-87. Fonseca and Urrutia, vol. 2, 370, state that Espinosa also considered supplies as being excessive. 68. Espinosa to Croix, February 28, 1769, AGN, Renta, vol. 8, fols. 87v-88. The issue of Huatusco, Coscomatepec and Songolica had been raised in 1767. Croix to Directors, September 16, 1767, AGN, Renta, vol. 8, fol. 59, had indicated that he wished to defer his decision on abolishing planting in these three areas. 69. Croix to Directors, March 8, 1769, AGN, Renta, vol. 8, fols. 89v-90v. Fonseca and Urrutia, vol, 2, 371-372, indicate that there was a great deal of confusion surrounding the Jalapa contract, and none was signed, 70. Espinosa to Croix, January 27, 1770, AGN, Renta, vol, 8, fols, 97-99. Fonseca and Urrutia, vol. 2, 372, note that the directors also opposed the expenditure of over 30,000 pesos annually on administration and resguardo costs. 71. Real to Croix, March 3, 1770, AGN, Renta, vol. 8, fols. 102105, Real repeated his arguments to Croix on April 4, 1770, AGN, Renta, vol, 8, fol, 154. Espinosa had rejected the petition from Coatepec in 1769 when the Jalapa deputies opposed a one-year contract. He stated that Coatepec tobacco was as good as tobacco from Cordoba and Orizaba, but the resguardo was too costly. Espinosa to Croix, April 22, 1769, AGN, Renta, vol. 8, fols. 92-96, 72. Frago to Croix, February 6, 1770, AGN, Renta, vol. 8, fol. 153v, stated he was opposed to planting in Teusitlan and Jalapa because contraband damaged the Renta 's income. Until this date, only Espinosa had been signing the letters from the directorship. 73. Directors to Croix, April 25, 1770, AGN, Renta, vol. 8, fols. 106-108. 74. Real to Croix, May 4, 1770, AGN, Renta, vol. 8, fols, 109-114.

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94 75. Croix to Directors, May 15, 1770, AGN, Renta, vol, 8, fols, 117-117V. 76. Directors to Croix, September 14, 1770, AGN, Renta, vol, 8, fols. 125-127V. 77. Directors to Croix, September 14, 1770, AGN, Renta, vol. 8, fols. 128-130. 78. The resguardo in the growing regions received the fuero in 1768, by a viceregal order of March 20. It was approved in a royal order of October 22, 1768. Croix, Letra de Titulo, May 26, 1770, AGN, Renta, vol. 47, fols. 354v-355, and Fonseca and Urrutia, vol. 2, 405. Bucareli defined the fuero in 1772 as applying only to crimes committed while on duty. He also referred to an "order" of November 24, 1766 granting the fuero, Bucareli to Directors, August 15, 1772, AGN, Renta, vol. 47, fol, 392. 79. Croix, Letra de Titulo, May 26, 1770, AGN, Renta, vol. 47, fols. 354-357. Real's official title was Comandante del Resguardo, Veedor, y Reconocedor de Tabacos en las Villas de Cordoba y Orizaba y demas Jurisdicciones Contratadas. Real describes his duties in his December 2, 1771 letter to Galvez, printed in Galvez Informe pp. 165-167. He notes that he established guardposts, resguardos in Cordoba and Orizaba and planting boundaries. 80. Directors to Croix, September 14, 1770, AGN, Renta, vol. 8, fols. 125-130. 81. Directors to Croix, September 26, 1770, AGN, Renta, vol. 8, fols. 131-132. 82. Directors to Bucareli, October 5, 1772, AGN, Renta, vol. 8, fols. 136-137v. The directors did not specify dates. 83. Directors to Bucareli, October 5, 1772, AGN, Renta, vol. 8, fols. 136-137V. 84. Directors to Bucareli, December 11, 1772, AGN, Renta, vol. 8, fols. 138-140. 85. Directors to Bucareli, April 15, 1773, AGN, Renta, vol. 8, fols. 142-143. 86. Bucareli to Directors, April 30, 1773, AGN, Renta, vol. 8, fol. 44. Bucareli ordered planting of a minimum four million matas for a yield of 800,000 to 900,000 tercios. 87. Fonseca and Urrutia, vol. 2, 372. 88. The growing area will be referred to hereafter as the Villas the term used by Renta officials.

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95 89. Tobacco was also grown in Yucatan, for the factoria of Merida. Galvez, Informe pp. 45-46, coinments on the early development of the monopoly in Yucatan, noting a royal order of January 24, 1768 approving establishment of the tobacco monopoly in the area, 90. The receipt of tobacco from Havana and Caracas will be discussed below, 91. Galvez, Informe p, 46. 92. Caldero'n Quijano, Carlos III vol. 1, 510. The royal order was dated May 21, 1776. 93. Fonseca and Urrutia, vol, 2, 387. 94. Revillagigedo, Instruccion p, 322. 95. The viceregal order was dated October 27, 1789. The report was from the contador to the viceroy, September 30, 1789, AGN, Renta, vol. 15, fols. 199-203. See Fonseca and Urrutia, vol. 2, 388, and Revillagigedo, Instruccion p. 322. Figures in Fonseca and Urrutia are the same as those in the report, and Revillagigedo 's slightly higher. The report indicates imports of 5,664,916 libras from 1778 to 1788, or 514,992 libras per year. The monopoly paid 834,677 pesos for this tobacco, an average of 75,879 pesos annually, or an average of 1.2 reales per libra. Revillagigedo, Instruccion p. 323, offers an average annual cost of 105,000 pesos. I have no explanation for the difference in figures. 96. Revillagigedo, Instruccion p. 323, The order was dated January 28, 1790. See also, Resena p. 4. 97. Revillagigedo, Instruccion p. 323. / 98. Fonseca and Urrutia, vol. 2, 389; Galvez, Informe p. 51. Galvez wanted a price of 4 pesos (32 reales) per libra. 99. Fonseca and Urrutia, vol. 2, 390. 100. Ibid 101. Francisco Maniau y Ortega, July 18, 1798, Estado del total consumo de tabaco su valor entero, salarios, gastos y llquido que ha producido la Renta del Tabaco del Reyno de Nueva Espana en el ano entero de 1797, AGN, Ramo, vol. 509. Only sixty-five libras of Casasola's snuff were sold in 1797. 102. Hierro to Directors, October 11, 1769, AGN, Renta, vol. 8, fol. 218v. 103. The 1767 and 1768 correspondence between the directors and Real is in the form of copies, many without dates. This documentation confirms Hierro's assertions. See AGN, Renta, vol. 8, fols, 242-249v,

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96 104. Directors to Real, April 26, 1769, AGN, Renta, vol. 8, fol. 236. 105. Hierro to Croix, November 3, 1769, AGN, Renta, vol. 8, fol. 215. 106. Hierro to Directors, October 11, 1769, AGN, Renta, vol. 8, fols, 218-220V, 107. Espinosa to Hierro, October 17, 1769, AGN, Renta, vol. 8, fol. 223. Espinosa to Bernardo Maria de Mendiola and Juan de Arias, October 18, 1769, AGN, Renta, vol. 8, fols. 237-237v. Espinosa ordered meetings with Real and the factor of Cordoba, Francisco Diaz, to determine increases in planting in Cordoba and Orizaba. 108. Espinosa to Hierro, October 17, 1769, AGN, Renta, vol. 8, fol. 223. 109. Real to Espinosa, October 23, 1769, AGN, Renta, vol. 8, fols. 250-251. 110. Hierro to Croix, November 3, 1769, AGN, Renta, vol. 8, fols. 217-217V. 111. Areche to Croix, November 23, 1769, AGN, Renta, vol. 8, fol, 218. 112. Espinosa to Croix, December 14, 1769, AGN, Renta, vol. 8, fols. 238-241V, 113. Frago to Croix, December 14, 1769, AGN, Renta, vol. 8, fols. 230-233. 114. Espinosa to Croix, December 24, 1769, AGN, Renta, vol. 8, fol. 251v, and Croix, decree, December 27, 1769, AGN, Renta, vol. 8, fol. 252. 115. Areche to Croix, January 18, 1770, AGN, Renta, vol. 8, fols. 252V-253. 116. Frago to Croix, February 6, 1770, AGN, Renta, vol. 8, fol. 253v. 117. Real to Hierro, March 5, 1770, AGN, Renta, vol. 8, fols. 274-274V, and Hierro to Croix, March 12, 1770, AGN, Renta, vol. 8, fols. 256-271, 274v-277v. 118. Areche to Croix, April 4, 1770, AGN, Renta, vol. 8, fol. 277v. 119. Areche to Croix, April 4, 1770, AGN, Renta, vol. 8, fols. 277v-279v. 120. Hierro to Croix, April 23, 1770, AGN, Renta, vol. 8, fols. 279V-291, and Real to Hierro, April 17, 1770, AGN, Renta, vol. 8, fol. 291. 121. Croix decree, April 25, 1770, AGN, Renta, vol. 8, fol. 292.

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97 122. Espinosa's report was dated April 24, 1770, AGN, Renta, vol. 8, fols. 292-294V, and Hlerro's was dated April 25, 1770, AGN, Renta, vol. 8, fols, 294V-296. 123. Junta de Tabaco, April 26, 1770, AGN, Renta, vol. 8, fols. 295-297, According to Fonseca and Urrutia, vol. 2, 375, the Renta also planted tobacco on its own account in Autlan and Tepic in the Bishopric of Guadalajara. Despite the high yield of tobacco, planting in the area was abolished by viceregal order of September 12, 1771, 124. Croix to Arrlaga, April 30, 1770, AGN, CV, vol. 15, fol. 54. 125. Areche to Croix, June 16, 1770, AGN, Renta, vol. 8, fols. 305v-307v. 311. 125. Galvez to Croix, June 26, 1770, AGN, Renta, vol. 8, fols. 307v127. Galvez, Informe, p, 53. 128. Galvez to Croix, June 25, 1770, AGN, Renta, vol. 8, fol. 310. 129. Croix to Hierro, Echeveste and Huarte, August 1, 1770, AGN, Renta, vol. 47, fol, 350, and Croix to Espinosa and Frago, August 1, 1770, AGN, Renta, vol. 8, fol, 351, Also, Arriaga to Bucareli, March 23, 1774, AGN, Ramo, vol. 146, fols, 248-250. 130. Phelipe del Hierro, April 17, 1771, Estado del total consumo de Tabacos, su valor entero, salaries, gastos y liquido que ha producido la Renta del Tabaco en este Reyno de N.E. en el ano entero de 1770. BN, Tabacos, v. Nueva Espana, Real Hacienda, 1785, vol. 1, ms. 19 (1332), fols. 38-39V. 131. Silvestre Diaz de la Vega, April 20, 1785, Estado del total consumo de tabacos, su valor entero, salarios, gastos y liquido que ha producido la Renta del Tabaco en este Reyno de N.E. en el ano entero de 1784. BN, Tabacos, v, Nueva Espana, R.eal Hacienda, 1785, vol. 1, ms. 19 (1332), fols. 400-401v. 132. Fonseca and Urrutia, vol. 2, 373. 133, Hierro and Huarte to Croix, December 17, 1766, AGN, Renta, vol. 33, fol, 41, noted the importance of the resguardo by referring to it as the "key to the revenues" of the monopoly. Croix to Arriaga, September 26, 1766, AGN, CV, vol. 11, fols. 65-67, advised that Spain should not expect the monopoly to produce revenues to the same extent as in the peninsula because of the difficulty of effective resguardo in Mexico's mountainous terrain.

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CHAPTER FOUR THE MANUFACTURING SECTOR: ABOLITION OF THE TOBACCO SHOPS While tobacco monopoly officials wrestled with the problems of the growing sector, they also had to establish a manufacturing sector in compliance with the Instruccion of 1764 and the order of October 24, 1767 calling for the gradual elimination of all private manufacture and sale of tobacco and tobacco products in the colony. These provided no timetable. "Little by little" all private shops were to be abolished, and their producing and marketing functions replaced by the monopoly's factories and estanquillos. This policy imposed a drastic change on the organization of the tobacco industry in New Spain, nothing less than the complete transferral of manufacturing and sale from private to state control. For officials in the colony, the problem at hand was to determine the best means for effecting this change, without causing serious dislocations in production or employment. Beginning early in 1768, Viceroy Croix initiated two simultaneous processes for creating the manufacturing sector: abolition of the tobacco shops and establishment of monopoly factories ( fabricas ) This chapter examines in detail the procedures through which the monopoly eliminated the shops in Mexico City, replacing them with the factory and the estanquillos,. and locating alternative employment for shop ox\mers and workers. Some attention is also given to the abolition of tobacco shops outside Mexico City. The organization and operation of the factory in Mexico City will be explored in detail in Chapter Five. 98

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99 A series of viceregal orders in February and March, 1768, outlined the general approach the monopoly would take in developing the manufacturing sector. Croix declared all existing shops as interim and nontransf errable through sale or other means. Because of "abuses," presumably contraband, the continued operation of the shops was regarded as prejudicial to the growth of monopoly income, Croix also ordered officials to prepare exact registers of all tobacco shops to permit proper licensing and of all professional cigarreros in each factoria. On February 12 the viceroy formally proclaimed that only professional cigarreros and the monopoly could manufacture and sell tobacco in any 2 '' form. An Instruccion of March 9 outlined the regulations for the monopoly factories and indicated that there was to be one factory in each factoria. The most important provision of this Instruccion was its statement that the monopoly would attempt to undercut the remaining shops by offering more cigarros for 1/2 real than the private shops, thus inducing consumers to prefer the monopoly product. Finally, the General Ordinances ( Ordenanzas ) of March 15, 1768 established procedures for inspection of the shops and their books. The ordinances also repeated the important provisions of the previous orders. In 1768 manufacturing by the Renta was re-established throughout the colony. Although the factories in Durango and Veracruz had continued to operate, the fate of the other factories in 1767 is unclear. As of November, 1768, however, the monopoly was administering eight factories in New Spain, located in Veracruz, Cordova, Orizava, Jalapa, Puebla, Q Oaxaca, Guadalajara and Durango. Until 1769, Mexico City did not manufacture labrados outside the tobacco shops. After preliminary consultations with the directors in March of that year, Viceroy Croix commissioned the treasurer of the monopoly,

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100 Juan Josef de Echeveste, to oversee the establishment of a new factory in Mexico City. He was assisted by one of the officials of the monopoly's contaduria general, Ysidro Romana, who was appointed contador of the factory. Echeveste quickly prepared a building for the new manufactures, and on June 27, 1769 the Mexico City factory opened on the Calle de Cadena with 360 male workers. The addition of the Mexico City factory brought the total in New Spain to nine. In September, 1769, however, the directors proposed to Croix that five of the factories be abolished and the Mexico City factory be enlarged. The factories suggested for elimination in Jalapa, Cordoba, Orizaba, Durango and Guadalajara were producing only small amounts of 11 labrados and making low profits, unlike the Mexico City factory. The Mexico City factory was too small and because of the close quarters, offi12 cials feared an epidemic such as the one which had occurred in Puebla. The directors notified Croix of the availability of a building oxroed by Jose Angel de Aguirre, with adequate room to triple the size of the work places. An expanded factory, they recommended, could provide labrados to the areas previously supplied by Guadalajara and Durango, including the Provincias Internas. Before the establishment of the Renta, Mexico City had supplied the so-called "tierra adentro," or nothern areas, anyway. The directors indicated that the Puebla factory could replace the factories in Jalapa, Cordoba, and Orizaba in supplying those factorias, as well as Its own factoria. The factories in Veracruz and Oaxaca would • • J. .13 continue to supply their own jurisdictions. Croix approved the director's requests in December, 1769, but the new arrangement was shortlived. Annoyed by widespread contraband in Veracruz, Croix commissioned Francisco del Real to reestablish the Orizaba factory to provide labrados for Veracruz, Cordoba and Orizaba.

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101 At the same time, he ordered the abolition of the Veracruz factory and the discontinuation of sale of rama in the entire Veracruz f actor ia. Only labrados, manufactured by the monopoly, could be sold in Veracruz in the future, thereby making possession of rama illegal. With the opening of the Orizaba factory in December, 1770, the monopoly was operating four factories in the colony. Mexico City supplied the Administration General of Mexico and the factorias of Guadalajara and Durango, including the Provincias Internas, Orizaba supplied the factorias of Orizaba, Cordoba, and Veracruz; Puebla and Oaxaca supplied their own factorias. On March 14, 1770 Echeveste reported the completion of his commission. In the first month of operation, the factory had earned sixty-seven 18 percent profits, and the corresponding profit figure for all of 1769 was fifty percent. Echeveste noted that the factory had been enlarged by renting Aguirre's building in January and that it currently employed 900 workers. He proposed Romana as administrator of the factory and 20 nominated the other factory officials. On June 9 Croix relieved Echeveste of his commission, appointed Romana as adminstrator and approved all of the other nominations. On the same date, Croix issued the Reglamento de Penas a set of instructions to regulate the behavior of workers 21 in the factory. The more comprehensive Ordinances for the factory, outlining the duties of all personnel, were published a few days later, on June 15, 1770.^^ The success of the Mexico City factory encouraged the directors to promote the abolition of the private shops. In doing so, they recognized the necessity of assuring adequate replacement labrados for sale from the monopoly's stores, the estanquillos. In a letter to the viceroy, they outlined the economic advantages of the manufacture and sale of labrados over the sale of rama alone. Part of the gain to the Renta derived from

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102 reduced costs of transportation, because the labrados weighed less than the rama from which they were produced. In addition, less movement of rama would reduce weight loss. The directors also noted that the overwhelming majority of smokers purchased their tobacco in manufactured form, either from the monopoly or from the private shops. Few actually produced their own labrados, and even fewer chewed the raw leaf or used 23 pipes. The directors encouraged Croix to abolish the shops as quickly as possible. The Crown's approach, they noted, was to eliminate the shops through attrition, "gently and with ingenuity," by refusing new licenses, by disallowing sale or other transfers of ownership, or by competing with the shops. The latter method, that of offering more and superior labrados for the same price as the private shops, they regarded as particularly slow. The complete abolition of the shops, they argued, was essential to the "perfection" of the monopoly. As long as the private shops continued 24 to exist, the potential income of the Rental would not be realized. Croix, after consulting with Joseph de Galvez ordered the immediate 25 enlargement of the Mexico City factory. A few days later he advised the directors of the availability of new buildings, located on the Esquina llamado de la Pulqueria de las Papas, and he ordered that they be rented and prepared for work. Several months later, on February 28, 1771, 27 Croix ordered the factory enlarged again to permit inclusion of women. When women were admitted in late April or early May, the factory was reorganized to provide separate entrances, exits and workplaces for men and women. Men entered the factory on the south side, from a street called the Calle de la Fabrica de los Hombres. The street with the women s entrance, on the north side, became the Calle de la Fabrica de las oo Mugeres, In April Croix also exempted those workers not already enlisted, 29 from militia service while working in the Mexico City factory.

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103 Croix also called upon the administrator general and the factors to prepare a register of all cigarreros in the colony who owned shops. The purpose of his edict was to determine the changes which had occurred since the establishment of the monopoly, thereby permitting the monopoly to prepare a priority listing of tobacco shops based on their legal status and their seniority. The order also called for the "total abolition" 30 of all the shops. Concerted action to eliminate the private shops, however, had to await the initiative of the new Viceroy, Bucareli. On December 6, 1771 Bucareli and Galvez visited the Mexico City factory because, as Bucareli noted, of the continuing disagreement among the directors over 31 the value of the factories. Bucareli responded to the factory very favorably, and was particularly impressed with the fifty percent profits and the 6,500 persons employed. He was also encouraged by the factory's potential as a source of employment for the poor, referring to it as "the 32 most appropriate remedy for the nudity and misery of the lower groups." He believed the factory could triple its size, employing more of the city's 33 poor and reducing the responsibility of the government to care for them. Because of his great faith in the potential of the factory, the Viceroy also stressed the importance of abolishing the private shops. He did not, however, advise any radical measures at that time; rather, he urged caution and promised that the elimination of the shops would receive his 34 careful attention. By late 1771 Bucareli would have been aware of the arguments being expressed in favor of abolishing the private shops, at least those being presented by contador Hierro and by Galvez. In his accounts on the Mexico 35 City factory for 1769, 1770 and 1771, Hierro had restated the advantages of monopoly manufacturing over continuation of the private shops. To begin with, profits in 1769 and 1770 had been fifty percent and forty — '! I .-b

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104 respectively. The monopoly could Increase its profits, however, by using two methods. The first was to reduce costs. Abolition of private production and a corresponding increase in Renta manufacturing, Hierro noted, would reduce consumption of rama in the Administration General and in the factorias of Valladolid, Guadalajara and Durango, thereby obviating the transport of tobacco to these more distant areas. The monopoly would save considerably, not only because of reduced transport costs but also because of less weight loss during transport. The second means of increasing profits was to expand sales. Monopoly officials such as Hierro were preoccupied with catering to the convenience of consumers because they regarded consumer satisfaction as the key to the success of the monopoly. The first advantage of monopoly production for consumers would be their opportunity to purchase labrados of high and even quality, made from mixtures of tobacco tailored to consumer tastes. Second, reduction of rama consumption would reduce the opportunity for monopoly officials to cheat 37 consumers by selling tobacco which was damp, adulterated or underweight. Third, tobacco in the form of labrados could be sent throughout the colony, even to the most remote areas. Rama sales in inaccessible areas were hindered by weight loss, spoilage and other problems, often preventing anyone from being willing to engage in the tobacco trade, even as a monopoly employee. Finally, abolition of the tobacco shops would eliminate the frequent abuses by cigarreros who mixed non-tobacco substances into their labrados, notably toasted peppers, veins of tobacco leaves, strong herbs, chile sediments and other "noxious mixtures" dangerous to the health. Galvez echoed many of Hierro 's arguments favoring monopoly production. The public, he noted, generally preferred cigarros and puros from the royal factories because they were not adulterated with substances such as toasted 39 pepper. In fact, he explained, the public wished to see the monopoly

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105 expanded throughout the colony so that labrados would become available in even the most remote regions. The only impediment to the success of the monopoly, Galvez concluded, was the continued existence of the private shops. Their abolition would be to the "mutual benefit of the public and the Renta." Although no formal program had been devised to abolish the shops, some attention had been given to reducing their numbers before Bucareli's visit to the factory. In October, 1765 Galvez had commissioned contador Mathias de Armona to prepare a register of all the private shops in Mexico 41 City. Armona counted over 500. Galvez declared that Espinosa and Frago had suppressed Armona 's report and had spread the rumor that over 3,000 tobacco shops operated in Mexico City. The visitor general also informed Bucareli that the directors had continued to license private shops, thereby delaying the progress of the monopoly by increasing the number of shops 42 and the burden of eliminating them. Despite Galvez assertions, a detailed account of 1768 indicated a decline in the number of tobacco shops in Mexico City, from 543 to 441 between 1765 and 1768. The report also provided data on the tobacco shops in other parts of the viceroyalty. Excluding the factorias of Puebla and 43 44 Durgango, the report listed 3,275 shops, distributed as follows: Administration General of Mexico 1,569 Mexico City 441 Outside Areas 1,128 Factoria of Valladolid 1,019 Valladolid (City) 192 Outside Areas 827 Factoria of Guadalajara 659 Guadalajara (City) 176 Outside Areas 483

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106 Factoria of Jalapa 21 Jalapa (City) 14 Outside Areas 7 Factoria of Oaxaca (Outside Areas) 7_ 3,275 if The faetorias of Veracruz, Orizaba, Cordoba and Teusitlan had no tobacco 45 shops in 1768. A second report in 1772 indicated that from 1768 to 1772 the number of shops in New Spain declined by over fifty percent, from 3,275 to 1,505. Their distribution in 1772 was as follows: Administration General of Mexico 739 Mexico City 286 Outside Areas 453 Factoria of Valladolid 204 Valladolid (City) 23 Outside Areas 181 Factoria of Guadalajara 386 Guadalajara (City) 124 Outside Areas 262 Factoria of Durango 104 Durango (City) 21 Outside Areas 83 Factoria of Puebla 72 Puebla (City) 33 Outside Areas 39 1,505 Viceroy Bucareli responded to this report by ordering the total 48 abolition of all remaining tobacco shops. The monopoly, he argued, would not be "perfected" until the resale or negotiation in tobacco was 49 completely eliminated. According to one historian, Bucareli 's decision

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107 to adopt a stronger line against the private shops was spurred by a royal order responding to Bucareli's report on his visit to the factory in 1771. The order had called upon the viceroy to take whatever measures necessary to encourage the development of the tobacco monopoly. Bucareli, therefore, ordered the directors to prepare a new register of all the tobacco shops in New Spain. The new list was to include the number of persons of both sexes owning shops, their names, ages, families, quality (calidad) and aptitude; it was also to indicate the number of workers of both sexes in the shops, specifying which ones operated with and without workers from outside the owners' families. Bucareli also requested figures on the amount of rama consumed by each shop, to enable the renta to calculate the exact earnings of the individual establishments, and ordered the collection of information on the types or classes of cigarros and puros sold by the private shops. Finally, the viceroy ordered the administrator general and the factors to present their views on the best means to abolish the tobacco shops, with careful attention to relocating displaced owners and workers in monopoly or other positions. Reports were to be submitted annually, to enable the viceroy to monitor the Renta 's progress in elim51 mating the shops. Bucareli commissioned the administrator general and co-director of the monopoly, Jose de la Riva, to carry out this operation in Mexico City 52 and in the Administration General. On December 1, 1773 Riva presented the other directors with an extremely thorough and detailed assessment of the tobacco shops in Mexico City and urged prompt action to carry out the 53 royal and viceregal orders for their "total abolition." Riva reported that since early 1772 the number of shops in the Administracion General and in Mexico City had been reduced significantly, from 739 to 236. The 54 changes were indicated as follows: -^ T I J AOilk&IW* .^

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108 Year Mexico City Outside Areas Total 1772 286 453 739 1773 146 90 236 Riva noted that he had suspended further action against the ninety shops in those parts of the Administration General outside Mexico City until the shops in the city were eliminated. Twenty-nine of the ninety shops were located in Queretaro, where he wished to be certain of a regular supply of labrados before taking the final steps. Riva's list of 146 tobacco shops in Mexico City indicated the location, name of owner, and number of workers of both sexes in each one. Nearly half of the shops 72 were owned by women, and women made up about thirty percent of the 691 workers in the 146 shops. Riva also pointed out that there were large numbers of workers in illegal shops. He offered no figures for 1773, but referred to the 816 men and 446 women, a total of 1,262, in both legal and illegal shops in 1772. The largest shop in 1773 employed 31 men, and several employed 17 or 18 persons, usually 58 Including members of both sexes. Riva's report also presented proposals for the establishment of the estanquillos which would replace the private shops. He recommended reducing the shops to eighty estanquillos, located conveniently throughout Mexico City. Until experience with actual sales could allow fixing salaries for the estanqueros or estanquillo operators, they should receive ten percent of sales, not to exceed 2 pesos (16 reales) daily. Riva suggested that the estanquillos be permitted to sell playing cards and gunpowder, 59 at five percent of sales, as was done in the monopoly stores established so far. He also favored allowing the estanquillos to sell non-tobacco items, provided accounts were strictly separated. Riva suggested further that the monopoly continue to sell cigarros in Mexico City in accordance with the system already adopted. The monopoly

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109 sold five sizes, or cortes of cigarros, referred to as numbers 10, 11, 12, 13, and 14. Number 10 cigarros were the thickest and number 14 the thinnest; the other three sizes ranged between the two. For 1/2 real consumers received 3 1/2 dozen (number 10), 4 dozen (numbers 11, 13, and 14) or 4 1/2 dozen (number 12) cigarros in packs, called caxillas, plus 6 loose cigarros. The monopoly had also adopted the tobacco shops' practice of selling cigarros for tlacos. Poor consumers not wishing to purchase an entire pack for 1/2 real could buy loose number 12 cigarros by paying 1/2 real for 12 cigarros and receiving 4 tlacos in change. Number 12 cigarros were sold in packs of 54 (4 1/2 dozen) plus 6 loose cigarros, so the total of 60 cigarros could be divided readily into five units of 12 cigarros for 1 tlaco each. Riva recommended that the monopoly continue this practice. Riva also proposed the monopoly permit the estanqueros to give consumers tinder or pieces of flint, as a substitute for loose cigarros offered as adeala. This was a common practice in the city. Finally, Riva advised that the monopoly sell only four classes of puros, called numbers 6, 8, 12, and 16, with number 6 being the thickest and number 16 the thinnest. Puros were sold in packs, called papeles of 6, 8, 12 and 16.^^ Riva regarded eighty estanquillos as too many for Mexico City. To assure positions for all shop owners, however, he believed it prudent to begin with a larger number than necessary. Women were particularly wellsuited to operate the stores, he stated, and should be preferred in future vacancies, Renta employees who became incapacitated while in service of the monopoly should also receive preference, to avoid paying pensions to individuals who could be used in different positions. Riva was very concerned about employing three categories of persons in the monopoly stores; widows, daughters of shop owners and incapacitated individuals.

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110 He planned to survey the shops to determine abilities, ages, family sizes and other demographic information. Those owners with the largest families would be preferred in awarding estanquillos; those owners in excess of eighty would receive positions in the factory, or alternative emplo3rment. No legitimate owners, their widows, or daughters would be excluded from the Renta. Riva believed that the estanquillos would be economically advantageous to the owners. Most of them, he noted, had incomes of 4, 5 or 6 reales a day, and many earned substantially less. Operating an estanquillo, moreover, would reduce their responsibility for administering their shops and supervising their workers. Riva was also concerned that the workers from the cigarrerias receive alternative employment, since the transfer from private to monopoly control was not to cause any dislocations. He advised the directors of his plan to collect data on the workers from the shop owners and to send the information to the factory administrator for use in hiring factory personnel. Some of the owners going to work in the factory, Riva noted, would probably wish to take their workers with them. Workers from the Mexico city shops were to have priority in all factory vacancies, and these same workers would be used to manufacture labrados for the city. The other directors of the monopoly agreed with Riva's proposals. Although Frago produced a detailed critique of Riva's plan, he did not oppose the basic aim of eliminating the private shops. Except for certain minor qualifications, the other directors found no faults in Riva's recommendations, Echeveste, in a separate letter on the plan, criticized Frago for dalying procedures without good reasons. He argued that they could not expect to agree on every detail, and the "confusion of opinions" hindered action. The time had arrived, he believed, not only to remove

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Ill trading in tobacco from private hands but to do so quickly to avoid a reduction of labrado supplies as the number of private shops declined. The monopoly did not want consumers to seek tobacco outside the city or to begin making their own labrados, thereby defeating the very purpose of the factories. Echeveste suggested the establishment of 120 estanquillos from the 146 shops and, because of fire hazard, the sale of gunpowder from only four of six estanquillos to be established on the edges of the city. Otherwise, he recommended that Riva be granted the same authority to establish the estanquillos he had received when he organized the Mexico 69 City factory in 1769. Several months later directors Espinosa, Hierro, and Echeveste, in consultation with the asesor of the monopoly, Cristobal de Torrescano, sent their report on the procedures for abolishing the private shops. In general, they praised Riva's plan but requested a number of changes in his recommendations. Approving the temporary payment of ten percent of sales, they advised a maximum daily salary of 16 reales (2 pesos) and a minimum of 6 reales, depending on the earnings of the tobacco shop at the time of its abolition. They suggested 100 estanquillos, rather than 120, each having a coat of arms at Renta expense. They agreed to allow the sale of non-tobacco items from the estanquillos but wished to delay any decisions concerning sale of playing cards and gunpowder. To improve the appeal of monopoly cigarros to consumers, the directors suggested offering six additional cigarros for 1/2 real. To make their monopoly product even more appealing, they proposed to eliminate the practice of giving loose cigarros and to incorporate them into the packs selling for 1/2 real. This change would also standardize the number of cigarros sold for 1/2 real throughout the city, thereby avoiding confusion

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112 in distribution and preventing illegal practices by the estanqueros. They rejected a Frago proposal that the monopoly should sell only two classes of cigarros and advised sale of all classes consumers normally used. They also favored the sale of all classes of puros used by consumers. The directors agreed with Riva's system of priorities for the granting of estanquillos. Preference should be given to xd.dows, daughters of shop owners or older monopoly employees, and persons incapacitated while in monopoly service. In case of death of an estanquero, the vacancy should be filled by the widow or children, otherwise by widows or other Renta employees or by incapacitated employees. Estanqueros would be required to pay a bond, unless they were financially unable to do so. Those not 72 paying would be regulated more carefully and inspected more frequently. Because of the expanded workload, the directors also suggested creation of an additional administrative unit in Mexico City. For the transport of rama and labrados, storage, collection of funds, and other responsibilities, they called for the appointment of four officials: a fiel administrador del Casco or administrator of the city, an inspector of accounts, a scribe and a cashier or treasurer ( cajero ) They also advised adding four guards to the unit because of the increased activity. Finally, the directors requested the acquisition of an additional building to house the new officials, the guards, and the administrator general, Riva, because of inadequate space in the head office ( Casa Direccion) 73 or in the warehouses ( Almacenes Generales ) The fiscal, Areche, and Viceroy Bucareli approved Riva's plan with the directors' changes, leaving Riva with the responsibility of completing the abolition of the shops by January 1, 1775. In October, 1774 Riva and asesor Torrescano visited 130 of the 146 shops, presenting their owners with a list of ten questions designed to derermine the details of

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113 75 the operation of their businesses. The questions were the following: 1. Name, quality ( calidad) place of origin, length of residence in Mexico City, marital status, age. Your own views on your aptitude and health. 2. Family size including names, ages and em.plo3nnent of all members of the extended family; specify if family members work in the shop. 3. Skills, trades or employment other than ownership of the shop. 4. Location of the shop, length of ownership, how the shop was obtained and monthly earnings 5. Daily, weekly or monthly amounts of rama purchased for manufacturing labrados in the shop, 6. Amount remaining after manufacture; daily cost of shop (rent). 7. Bookkeeping costs; earnings before the tobacco monopoly was established. 8. Net profit per libra of tobacco purchased from manufacturing indicating the cigarros of each class (number) sold for 1/2 real. 9. Costs of lighting at night; cost of cigarros and flint ( pilones ) ; cost of glue for papers for the cigarros ( oblea para cerrar ) 10. Number of operarios and their names, ages, qualities ( calidades) addresses, daily work load, daily earnings and any payments other than money. Riva advised the directors that he still had to visit the remaining shops, presumably sixteen, as well as about 250 illegal shops in the city, in order to determine their sales and to attend to relocating the owners and workers. He stressed the need to proceed carefully and to guarantee positions for all legitimate ovmers and workers, mentioning in passing that his house had been the target of two demonstrations on the same evening. No further incidents had occurred, but this underlined the importance of keeping the public satisfied while changes were being made. Finally, Riva recommended that the monopoly rent the house next to his for the new city officials and the new guards. In November, 1774 Riva submitted a revised plan of action. Noting that he had studied the city "barrio by barrio and street by street," he

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114 advised the directors that 120 estanquillos, rather than 100, would be needed to facilitate sales. Since the stores were to open January 1, he requested that production of labrados begin soon and sent a list of six experienced cigarreros to supervise the new work. He also indicated 78 the number of workers needed to produce labrados for the city. Apparently because of what he had learned in walking about the city, Riva also recommended adding cigarros number 23 to the monopoly's usual five classes and abolishing the tobacco shops' numbers 15, 21 and 25. To comply with the directors' orders concerning the number of cigarros to be sold for 1/2 real, he suggested selling 5 dozen cigarros in the packs of 23 's, 12 's, 13 's and 14' s, 4 1/2 dozen in the 11 's and 3 1/2 dozen in the 10' s. In opposition 79 to the directors, who had proposed the abolition of sales for tlacos, Riva insisted that their use be continued. Only rarely, he argued, did the tobacco shops not issue cigarros for tlacos, and their discontinuation would prevent poor consumers from purchasing from the monopoly. He recommended selling 12 cigarros from the 23 's for one tlaco, each 1/2 real being equal to five tlacos. Offering 12 cigarros, Riva continued, would attract the poor because current practice was to give only (5 or 7 cigarros, usually of inferior quality, for one tlaco. Consumers would also be pleased by the fact that the monopoly would be offering 6 more cigarros for 1/2 real in the 12 's, 13 s and 14' s. Tobacco shops selling more than 5 dozen cigarros for 1/2 real in these classes, he stated, were doing so on by using poor quality tobacco, reducing the size or engaging in fraud. With regard to the manufacture of puros, Riva recommended reduction of the number of classes from eight to four. The private shops sold puros designated numbers 4, 5, 6, 8, 10, 12, 14 and 16. Since most consumers purchased numbers 6, 8, 12 and 16, Riva suggested the production of only these four classes.

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115 Riva repeated his earlier advice to proceed, at least Initially, with caution. In order to accustom consumers to the changeover, he urged the directors to follow customary tobacco shop procedures insofar as possible, until the new system was firmly established. He believed that this approach, combined with the improved quality and greater number of clgarros for 1/2 real, would gradually win the loyalty of consumers to the monopoly product. At first, he predicted, sales would be low because some consumers would hoard labrados or turn to making their own from rama, fearing the alterations arising from abolition of the private shops. Eventually, however, they would adapt and the monopoly could then, "withQ 9 out scruple or fear," make any necessary adjustments. On January 1, 1775, 110 estanquillos opened for business in Mexico City without incident. Riva reported that he had reduced the 120 proposed stores to 110 because of the uncertainty of adequate sales for 120. He would reduce the 110 stores to 100 as quickly as possible. Riva informed the directors that in abolishing the private shops it had been necessary to find emplojraient for about 400 owners of legal and illegal tobacco shops, and for 1,200 male and 500 female workers, a total of 2,100 persons. Exactly half of the estanquillos 55 were able to remain in the same location they had been in as private shops. Since the public appeared satisfied, as indicated by the monopoly's profit figures, and since the shop owners had lodged no complaints, Riva concluded that the changeover was a success. In fact, he noted, the estanqueros accepted the change "with applause," and even the poorest painted their doors and expressed 84 pleasure at their nex^ positions of distinction. Riva established the estanquillos in accordance with his determination of what he termed the "right of seniority," based on the duration

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116 Q C of legitimate ownership of a tobacco shop. The details of his system are not available, but he attempted to assure that ultimately, as the estanquillos were reduced in number, only those with legitimate rights of seniority would operate the monopoly outlets. These persons were not numerous, he noted, and many of the estanquillos created were not legitimate according to his formula. Those cigarreros with less than six years ownership of a tobacco shop, for example, did not receive "rights of possession," although many legitimate cigarreros had been forced to sell their shops and might have purchased them back recently. Riva's goal was to guarantee that all legitimate owners receive either estanquillos or positions in the factory, and that tobacco shop workers receive positions in the factory. Again, he was prudent, since this procedure would permit consumers to purchase labrados from the same persons they patronized before the abolition of the shops. The conditions of operation of the estanquillos were outlined in December, 1774, shortly before they opened for business. The tobacco shops were ordered to sell all their private stocks by January 1, since sale of monopoly labrados would not begin until 6:00 A.M., January 1. Hours of operation were from 6:00 A.M. to 10:00 P.M. daily, with sales through their windows permitted until 11:00 P.M. Any sales after 11:00 P.M. would result in immediate loss of possession of the estanquillo. Penalties for dealing in contraband or for selling non-monopoly tobacco products were also defined. The estanqueros were responsible for signs, lighting, and hanging the price list ( tarifa ) and for keeping entrances free of loiterers. Only family members were allowed to work in the store. Operators were permitted to sell non-tobacco items, but only under strict rules for accounting and delivering funds received for tobacco.

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117 The estanqueros were ordered to treat consumers politely and to report all complaints. As an incentive, those operators selling the most tobacco were advised that they would receive preference in transfers to better sites with higher salaries. All owners were ordered to inform their employees that work would be available in the factory as of January 1, in accordance with their skills. They were also advised that possession of an estanquillo or of a job in the factory were very desireable positions, since most would earn more than they had in the tobacco shops. As Renta employees, they had greater job security and, in the case of the shop owners, less responsibility. For the public, the advantage of the changeover was that they would receive both better and more labrados for the same 87 1/2 real. The price list for tobacco under the new system can be seen in Table 1 (Appendix) Tobacco which could not be used in cigarros or puros was sold as siftings ( granza ) at 1/2 real for one level quartilla (about 1/2 dry liter) Leftover or filler tobacco, called palos was sold at one libra for 1/2 89 real or 16 libras for 8 reales (1 peso) Rama continued to be sold at the prices determined in 1767, varying from 6 reales per libra in the Administration General to 7 1/2 reales in Chihuahua, which was in the 90 factoria of Durango. In September, 1775, Riva presented a new scale of salaries to be paid the estanqueros, based on experience with sales since the opening of the stores in January. The salary of ten percent of sales had been a temporary measure, until actual transactions in the various locations could allow the monopoly to adjust not only salaries but also the number and locations of the outlets. By September the 110 original stores had already been reduced to 95, 3 because of deaths and 12 because of transfers

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118 of estanqueros to the factory. This reduction had already saved money for the Renta, Rlva noted, and his new plan would save an additional 7,500 pesos annually. By reducing the estanquillos from 95 to 60, Riva's opti91 mum number, the monopoly would save a total of 12,000 pesos each year. Riva's plan provided for salaries of from four to nine percent of sales, down from the ten percent awarded to all operators in January. No estanquero would receive less than 6 reales nor more than 22 reales per day, based on sales figures to that date. Salary levels were also coordinated with the income of tobacco shop owners before the monopoly takeover. The plan was guided by the principle that no owner should suffer an economic loss because of the change; many, in fact, would gain income. The list of 95 estanquillos Indicated that 88 had been private shops. Of those 88, 68 would gain income and 20 would lose. The plan, however, compensated for the loss by moving the estanquillos, by abolishing nearby outlets, or by arranging for sales of snuff, gunpowder or playing cards from the stores. Fifteen of the 25 shops earning the minimum 6 reales per day, for example, were to be abolished. Most of the estanquillos 54 92 would receive from 6 reales 5 1/2 granos to 10 reales 4 granos; only one would earn more than the maximum of 16 reales (2 pesos) suggested in 1773. The list of 95 estanquillos indicated that 3 former shops would suffer loss of income, but only until sales increases restored their earnings to the same level as in the tobacco shops. Three other stores which had earned 16 reales as private shops were to receive supplements until increased sales produced that amount. Some estanquillos would eventually earn more than 16 reales, but as of that date no outlet had ever sold enough tobacco to earn more than 22 reales. The list of 95 estan-

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119 quillos also indicated that 40 of the stores, as private shops, had actually earned less than the minimum 6 reales to be guaranteed by the monopoly. Twenty-two of these stores, however, were schedules for abolition. Finally, all estanqueros would be required to pay their own costs for rent and lighting.''-^ Riva's plan also provided for the sale of playing cards, gunpowder and snuff from the estanquillos. Until that time, playing cards had been sold from 4 locations, but Riva proposed selling from 14 estanquillos in the city. Estanqueros would receive four percent, allowing some to earn up to 160 pesos per year (3 reales 4 granos per day) in addition to their 94 tobacco sales income. Gunpowder was to be sold, at five percent of sales, from only 4 locations at the edges of the city, because of the danger of 95 fire. Snuff, currently sold at only one location by Jose de Riofrio, was to be sold from 5 estanquillos, at five percent of sales. Riva suggested Riofrio be appointed as a teniente visitador to inspect the estan96 quillos and their accounts in Mexico City. By Riva's plan, some estanquillos would sell tobacco, playing cards, gunpowder and snuff, and some only one or two of these three additional items. Most, therefore, would sell only cigarros, puros, granza and palos. Riva's final proposal was to abolish production of number 23 cigarros. Profits from number 23 's were only twenty-four percent on sales, while the other five classes earned from thirty-five to sixty-seven percent. To make matters worse, consumers purchased over twice as many of the number 23 cigarros as of the other five classes combined. Consumers bought 23 's because they were thicker than the 12 s and similar to the 11 's, which sold only 4 1/2 dozen per pack, rather than 5 dozen. Estanqueros were

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120 also separating six cigarros from the 23 's to be made into packs of 11 's, of only 4 1/2 dozen, leaving six cigarros to be sold for tlacos. Riva recommended that the monopoly sell 12 's, which earned thirty-eight percent profits, for tlacos, beginning in 1776. With the 23 's abolished, the remaining five classes would provide an adequate range to satisfy consumers. no The change would also simplify factory procedures. Despite opposition on certain points from Espinosa, the other directors and the fiscal, Areche, recommended immediate adoption of Riva's pro99 posals. Bucareli's approval and, therefore, implementation of the plans, however, was delayed by important developments within the five-man directorship of the monopoly. The monopoly's takeover of the tobacco shops proved to be a catalyst in the reorganization of the directorship in 1776. Bucareli, writing after the event in November, 1776, noted that his response to Riva's plans had been delayed by the reorganization. The monopoly's arrangement of using five co-directors after 1770 had never satisfied the individuals involved. By April of 1771 the new co-directors, contador Hierro, treasurer Echeveste and administrator general Huarte were petitioning to be relieved of their additional re102 sponsibilities because the work load was too great. The Crown, in 103 response, requested Viceroy Bucareli's views on the petition. Bucareli advised the Crown that the three men should really not be co-directors, but this was the only means at his disposal for carefully monitoring Espinosa and Frago. Like Galvez the viceroy was disturbed by the seriousness of the error made by the two directors in the matter of tobacco supplies. It had eroded public faith in the monopoly and delayed the progress of the Renta because of the need to import tobacco. Espinosa and Frago, moreover, were notoriously contentious and had never been able to agree

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121 on monopoly policy, often engaging in outbursts of petty rivalry. Espinosa, for example, complained to the viceroy of Frago's inexperience with tobacco ,. „ 104 monopoly practices xn Spam, The most deep-seated hostility within the directorship was directed toward Frago. Bucareli, like the other directors, regarded him as a 105 troublemaker. Whatever the problem at hand, the viceroy noted, Frago always held opposing views and proposed new plans, adopting an air of superiority and disturbing the "tranquil service and peace" of the other 1 C)f\ directors. The most penetrating, and therefore revealing criticism of Frago came from the pen of administrator general Riva. His discontent, suggesting personal animosity toward Frago, offers important insight into the difference in approach to the administration of the tobacco monopoly between the "older" officers, Espinosa and Frago, and the newer ones, Hierro, Echeveste and Riva. One can also hear echoes of the modernizing voice of Joseph de Galvez. Writing in July, 1773, Riva noted the continual discord he had observed between the directors ever since his arrival from Spain as a contaduria official in 1766. This "scandalous and harmful" rift betxr^een Espinosa and Frago was the principal cause, he noted, of the "retarded condition" of monopoly revenues. Because of their constant "lack of observance of the regulations," as they proceeded in their own separate directions, the monopoly suffered.^ Riva was particularly incensed by what he regarded as their "inaction." They managed the monopoly, he complained, in accordance with their own views, obeying only those orders which coincided with their own ideas. If they were unable to evade the orders, they interpreted them to suit themselves and caused digressions and delays in matters which should be settled quickly. They wished to

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122 have the monopoly established gradually, without active dispositions. They argued that the monopoly was still young, when it had actually been operating for nine years. In other hands, the monopoly would have been completely organized by this time, especially considering the support given it by Viceroys Croix and Bucareli. The approach of the two directors, Riva continued, was based on their knowledge of the gradual creation of the tobacco monopoly in Spain. They refused to recognize, however, that the Spanish monopoly operated in accordance with slowly-developed regulations and practices and that these were immediately applicable to New Spain. Riva saw no means of changing their views toward the administration of the monopoly. Instead of promoting the Renta, he declared, they postponed it, constantly siding with the consumers without recognizing that the interests of consumers and the Renta were compatible. They searched for obstacles that do not exist, and they obstructed the abolition of the tobacco shops, the key step to perfecting monopoly income and satisfying the consumers. Directing his final blast at Frago, Riva concluded: Antonio del Frago is the most preoccupied and tenacious man I have ever known and the one who impedes resolutions, because he subjects everything to abstract ideas, passing them through imaginary spaces and creating difficulties, without offering solutions. He causes even trivial and already-settled matters to remain without being dispatched, and I have told him several times, hopeful of reducing this, that the Renta 's decisionmaking does not require metaphysics, and that there is no worse government than one of Inaction. ^^^ Bucareli agreed with Riva's views on Frago and also offered several criticisms of Espinosa's performance. Because of Espinosa's insistence on leasing, the viceroy declared, he obstructed the progress of the monopoly in its early stages. This attitude delayed public acceptance of a monopoly because the merchants regarded him as an ally. The planters.

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123 for example, saw Espinosa as a protector during the settlement of the first contract, signed in spite of Sebastian Calvo's opposition to the high prices. The planters, Bucareli lamented, had demanded the 1765 prices ever since. The royal order of October 24, 1767 ended any possibility of leasing the monopoly, but Espinosa continued to resist the abolition of the tobacco shops, a vital step in the full development of the monopoly. He is timid, Bucareli argued, but without good reason, as indicated in his fears of public disturbances. Only the unity of the other directors had forced Espinosa into accepting the elimination of the private shops. Despite these misgivings, Bucareli recommended that Espinosa remain as a co-director. Frago, on the other hand, should receive another appointment, since his working with Espinosa produced indolence, indecisiveness and friction. Frago was not guilty of malice, Bucareli declared, but of wishing to operate the monopoly singlehandedly, and his inability to agree with Espinosa had been one of the reasons why Galvez had suggested they be removed from office. Contador Hierro, because of his excellent service in Spain and New Spain, and because of his intelligence, should replace Frago as co-director with Espinosa. Hierro 's position should be 111 filled by administrator general Riva. On April 20, 1776, Joseph de Galvez fired both Espinosa and Frago. His authority to do so was unquestioned, since he had recently been appointed not only minister of the Indies but also head of the tobacco 112 monopolies throughout the American colonies. Espinosa was to continue to receive his salary until a new position could be found for him, and Frago was to be sent to Queretaro as a corregidor. Hierro and Riva were 113 appointed as co-directors, earning 5,000 pesos annually. Hierro was replaced as contador by Carlos de Silva and Riva as administrator general

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124 by Jose Pellerano y Cabrera, at 4,000 pesos each. Echeveste remained as treasurer of the tobacco monopoly and as director of the monopolies of gunpowder and playing cards, at 4,000 pesos plus a bonus for his double duty. Hierro and Riva took office as co-directors on August 1, 1776. Because of the change in the directorship, Bucareli did not at first respond to Areche's December, 1775 recommendations concerning the estanquillos, but in November, 1776 accepted them and decreed that they be put into effect on January 1, 1777. The only change in the plans was to allow sale of number 13 and 14 cigarros, in addition to number 12 's, for tlacos. Regulations for snuff sales from the six estanquillos were also established. Only one outlet was to sell all three classes of snuff, called esquisito, fino and comun. The other five would sell comun only.''"'^^ In the following years the monopoly continued to reduce the number of estanquillos in Mexico City. By 1781 there were 73 estanquillos,''""'"^ by 1785 only 65, and by 1787 the number was 64, the same number 120 listed in 1801. The 1801 list indicated that Riva was unable to reduce the estanquillos to the 60 he favored in 1775, although the difference seems insignificant. His preference for women as estanqueros appears to have influenced appointments, since 43 of the operators, exactly two-thirds of the total, were women. The average salary of the estanqueros in 1801 was 597 pesos annually, or about 13 1/2 reales per day. None earned less than 361 pesos (8 reales daily) nor more than 854 pesos (18 reales 8 granos dally) figures very much in line with the original 1 121 plans. The directors of the monopoly also regarded the abolition of the tobacco shops in other areas of the colony as essential to the "perfection" of the monopoly. Joseph de Galvez encouraged them to move more quickly in

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125 that direction in a royal order of July 27, 1776 directing the viceroy to increase tobacco monopoly revenues by improving administration and 122 resguardo and by raising prices. When the directors received the order, they urged the viceroy to delay any adjustments to prices or quantities of tobacco until the Renta could complete the abolition of the tobacco shops remaining in the factorias of Valladolid, Guadalajara and Puebla and in the city of Queretaro. They requested the postponement because they did not wish to throw anyone out of work and because they regarded final elimination of the resale of tobacco in the colony as the measure which would complete the establishment of the monopoly in its fully-developed form. 123 The directors suggested enlarging the factory in Puebla to supply its own jurisdiction and to provide employment for the workers from the shops yet to be abolished. The Orizaba factory would then be limited to supplying only the factorias of Orizaba, Cordoba and Veracruz. Tobacco shop owners in Puebla would receive estanquillos. For Guadalajara, they called for the reestablishment of the factory, again to provide jobs for workers from the private shops to be eliminated in the factorias of Guadalajara and Valladolid. The Guadalajara factory would also supply labrados to the Provincias Internas. Enlargement of the factory in Puebla, and reestablishment of the factory in Guadalajara, then, were considered pre-conditions to the abolition of the remaining tobacco shops in New Spain. The directors hoped to achieve their goal in a single step. Once the private shops were gone, they would be able to give more careful con124 sideration to the royal order to increase monopoly revenues. In February, 1777, the directors began corresponding with the factors of Valladolid and Guadalajara concerning the abolition of the shops. Re-

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126 f erring to the 150 remaining tobacco shops in Valladolid, only twenty-two of which were in the city of Valladolid, the directors ordered the factor, Roque Yanez to collect complete information on the operation and personnel of the private shops. They advised Yanez that all owners and workers would receive alternative employment, in Valladolid, Guadalajara or Mexico City, and that they would be given financial assistance in relocating. Yanez was ordered to determine the number of estanquillos needed, with an eye to the convenience of consumers. He was also ordered to indicate which classes of cigarros and puros should be sent to Valladolid, since the lesser "perspicacity" of consumers suggested they would not demand all five classes of cigarros or all four sizes of puros as in Mexico City. The directors wished to send only two or three classes of cigarros and only two of puros, if possible. Finally, they ordered that Yanez begin with an excessive number of estanquillos, as had been done in Mexico City, 125 to avoid displacement of any shop owners. Yanez responded by suggesting the preliminary creation of twenty-two estanquillos simply by turning the existing shops into monopoly outlets. This measure, he commented cynically, would "dry the tears" of the owners and avoid public unrest, since none would have to be moved from their present locations. Ultimately, only six estanquillos would be needed. The excess personnel could be gradually expelled from the stores, since they 126 were persons "without honor or ability." The workers, who were "useless people full of vices," would have no choice but to go to the Guadalajara or Mexico City factories. Yanez believed that the workers xTOuld willingly migrate because of their attraction to a transient way of life, although relocation might be obstructed by the fact that over half of the workers in the Valladolid factoria were women, many unmarried. The factor pro-

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127 posed that the monopoly avoid financial assistance to the workers, arguing that they would simply spend the money on games or other "pernicious vices." Yanez also opposed the order to investigate the operation and personnel of the tobacco shops. Such an action, he declared, was unnecessary, and would lead to fear and resistance. Finally, he indicated that the ^ • 127 factoria required only number 8 puros and only one class of cigarros. Upon receiving Yanez' letter, the directors ordered the abolition of all tobacco shops in the factoria of Valladolid and the establishment of estanquillos, at a salary for the operators of five percent of sales. To control fraud, they established strict limits on the amount and class of rama which could be purchased at one time. Since they had not yet decided about reopening the factory in Guadalajara, all workers would have to come to Mexico City at their own expense, because of the reasons Yanez had offered. Although they sent only number 12 cigarros for sale, they included samples of the other four classes for experimentation. The Renta wished to encourage consumption by making available a range of cigarros referred to as gordos (thick) medianos (medium) and delgados (thin) They also sent puro classes 8, 12 and 16 for experimentation. The directors believed that consumers would probably prefer cigarros number 10, 12 and 13 and puros number 8 and 12. Yanez, however, indicated that only cigarros number 12, 13 and 14 and puros number 8, 12 and 16 were acceptable in Valladolid. The estanquillos of Valladolid opened on April 1, 1777, and Yanez advised the directors that the shops outside the city would be 129 abolished by April 15. On the same day the directors ordered Yanez to begin the abolition of the shops in Valladolid, they directed the factor of Guadalajara, Jose 130 de Trigo, to do the same. The directors also consulted Trigo about

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128 a previous letter concerning alternative employment for tobacco workers in the cotton and woolen industries in Guadalajara. Since they were uncertain of the details of Trigo's proposals, they wished to obtain complete information before making a decision on the reestablishment of the 131 factory. Meanwhile, Trigo was to report on the condition of the old factory building, the number of workers required and the need for Mexico City to supply labrados to the northern areas, such as Durango and Sonora, 132 if the factory returned to production. Trigo reported the existence of 115 tobacco shops in the city of Guadalajara, 107 of which were owned by women. He did not believe that a factory was needed in Guadalajara, however, because the number of shops had declined in recent years and alternative employment was available in cotton and woolen textile manufacturing. Employment in these new industries, he argued, was superior to the positions held by many tobacco shop owners and better than work in a new tobacco factory. Many of the female owners would be able to find employment as spinners of cotton or wool. Trigo advised the directors to encourage the government to protect the textile trade in Guadalajara, since it was a potential source of 133 jobs for thousands of persons. The directors ordered Trigo to keep the shops which were operating in the city but to abolish those in the outside areas. This was to be a temporary measure until a final decision could be made. Salaries and conditions of sale of rama were to be the same as in Valladolid. The directors also sent Trigo all five classes of cigarros and three of puros -1 Q / for experimentation, again to encourage maximum consumption. Riva reported the directors' actions to Bucareli, advising the viceroy that no decision had been reached concerning the Guadalajara factory. Despite

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129 Trigo's assertions, he noted, they wished to be absolutely certain that the workers could find employment in the Guadalajara textile trades. If not, the factory would be reopened. The tobacco shops in Queretaro and Puebla, he concluded, continued to operate because the factory in Puebla 135 had not yet been enlarged. Detailed documentation on the final actions to abolish the tobacco shops in New Spain is not available. The shops in the factorias of Valladolid and Guadalajara, except for the city of Guadalajara, were eliminated in April, 1777. An order of July 12, 1777 called for the abolition of the tobacco shops in the city of Guadalajara, and the monopoly sent the teniente of the resguardo of Mexico City, Andres Barbosa, to verify compliance. In 1778 Fermxn Percaz was sent to Guadalajara by the Renta to inspect the factoria and settle outstanding problems. At that time he ordered the exclusion of all textile workers from the tobacco factory 137 because the textile industry was being encouraged. The directors also sent the contador of the Mexico City factory, Benito Betosolo, and teniente Barbosa to Puebla in 1776 and 1777 to verify the abolition of the shops in that city. Only seventeen shops were involved. Barbosa was also sent to Queretaro in 1777 to abolish the shops there. His report on the successful conclusion of his duties was 139 approved by the directors on September 3, 1777. The abolition of the tobacco shops and the creation of the estanquillos, culminating in the years from 1775 to 1777, was only one part of the development of the manufacturing sector. The second part, to be examined in Chapter Five, was the organization of the factory system to replace production by the shops. Because of the large number of shops in Mexico City, the task of abolishing them had been formidable in the

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130 capitol. Riva, by minimizing the adjustments required of owners and workers, avoided serious dislocation, and his authority to promise equal or greater Income to the owners forestalled any resistance to the change. Two casualties of the adoption of the new system were the co-directors, Espinosa and Frago. The details of their personal conflict are not available, and it is unclear whether their "scandalous discord" was personal or related to different approaches to managing the monopoly. Frago, it would appear, was employed in a position somewhat inappropriate to a person of his intellectual orientation. Both men, however, were also victims of the Bourbon Reforms, As devotees of a more traditional approach to fiscal policy, they were eventually swept aside by the impatient modernizing trend toward direct royal administration. NOTES 1. Vega to Branciforte, July 10, 1795, AGN, Ramo, vol. 495, fols. 85-86. The viceroy sent orders to the magistrates of the colony on February 6 and 10, 1768, and advised the directors on February 12. See also Croix to Arriaga, March 1, 1768, AGN, CV, vol. 12, fols. 56-59, and Croix to Arriaga, April 26, 1768, AGN, CV, vol. 12, fols. 130-133. 2. See Chapter Two. 3. Croix, March 9, 1768, Ynstruccion de lo que debe observarse en la Administracion de la Fabrica de Puros y Cigarros que ha de haver en cada Factoria Principal, AGN, Renta, vol. 68, fols. 5-6v. 4. Croix, March 9, 1768, Ynstruccion de la Fabrica, AGN, Renta, vol. 68, fols. 5-6v. 5. March 15, 1768, "Ordenanzas de la Real Renta del Tabaco," in Fonseca and Urrutia, vol. 2, 459-460. 6. Galvez to Bucareli, November 22, 1771, in Galvez, Informe Appendix 3, p. 177, noted that the viceroy was ordered to give special attention to restoring the factories. See Chapter Two for the junta's orders to abolish manufacturing by the monopoly. 7. See Chapter Two.

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131 8. Contador to all Factors, November 26, 1768, AGN, Renta, vol. 65, fol. 29. 9. Vega to Branciforte, July 10, 1795, AGN, Ramo, vol. 495, fols. 90-91v. Echeveste was commissioned on May 12, 1769. 10. Echeveste to Croix, August 23, 1769, AGN, Ramo, vol. 483, fols. 1-2. 11. Profits in the Mexico City factory after one month of operation were sixty-seven percent on sales. Directors to Croix, September 22, 1769, AGN, Renta, vol. 65, fols. 36-36v. 12. Directors to Croix, September 22, 1769, AGN, Renta, vol. 65, fols. 36-36V. 13. Directors to Croix, September 22, 1769, AGN, Renta, vol. 65, fols. 36-36v. 14. Croix to Directors, December 16, 1769, AGN, Renta, vol. 65, fols. 32V-33. 15. See Chapter Three, 16. Galvez indicated that tobacco shops never operated in Veracruz. Contraband was common because ships arrived frequently from Campeche, Havana and Caracas, and contraband rama was sold under cover of monopoly sales. Galvez to Bucareli, November 22, 1771, in Galvez, Informe Appendix 3, p. 176. 17. Bernardo Maria de Mendiola to Directors, June 7, 1779, AGN, Renta, vol. 67, fols. 198-199v, and Espinosa to Mendiola, January 2, 1771, AGN, Renta, vol. 67, fols. 74-77. 18. Directors to Croix, September 22, 1769, AGN, Renta, vol. 65, fols. 36-36v. 19. Echeveste to Croix, March 14, 1770, AGN, Ramo, vol. 483, fols. 26-27. 20. Echeveste to Croix, March 14, 1770, AGN, Ramo, vol. 483, fols. 26-27. 21. Vega to Branciforte, July 10, 1795, AGN, Ramo, vol. 495, fols. 97-97v. Croix, June 9, 1770, Reglamento de Penas, AGN, Ramo, vol. 483, fols. 12-14. 22. Croix, June 15, 1770, Reales Ordenanzas de la Fabrica de Puros y Cigarros de la Capital de Me'xico, establecidas desde 15 de Junio de 1770, AGN, Renta, vol. 71, fols. 50-65. The factory ordinances and operation of the factory will be discussed in detail in Chapter Five. 23. The directors wrote to Croix on August 26, 1770. Letter cited in Vega to Branciforte, July 10, 1795, AGN, Ramo, vol. 495, fols. 97v-100.

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132 24. Letter of August 26, 1770 from the directors to Croix, cited in Vega to Branciforte, July 10, 1795, AGN, Ramo, vol. 495, fols, 97vlOOv. 25. Letter of September 12, 1770 from Croix to the directors, cited in Vega to Branciforte, July 10, 1795, AGN, Ramo, vol. 495, fols. lOO-lOOv. 26. Letter of September 21, 1770 from Croix to the directors, cited in Vega to Branciforte, July 10, 1795, AGN, Ramo, vol. 495, fol. 101. Marroqui, vol. 2, 379, states that the factory moved to its permanent location in the Barrio de la Lagunilla (Thieves Market area today) to a street with no name and in al almost deserted part of the city, on January 22, 1771. 27. Ysidro Romana to Directors, May 2, 1771, AGN, Renta, vol. 65, fol, 25, reported women working as of "last Saturday," which meant women began working in late April or early May., 1771. Marroqui, vol. 2, 379, erroneously states that women began working on May 6, 1771. 28. Marroqui, vol. 2, 379. Today, these streets are called Republica de Paraguay and Republic de Ecuador. See Viera, p. 119. 29. Viceregal decree of April 17, 1771. Vega to Branciforte, July 10, 1795, AGN, Ramo, vol. 495, fol. lOlv. 30. Viceregal order to Directors, September 12, 1770, quoted in Riva to Directors, December 1, 1773, AGN, Renta, vol. 1, fol. 3. Vega to Branciforte, July 10, 1795, AGN, Ramo, vol. 495, fols. 100-lOOv, also notes that the order went out to the administrator general and the factors on October 10, 1770. 31. Bucareli to Arriaga, December 23, 1771, copied in Velasco Ceballos, vol. 2, 5. Galvez Informe, p. 41, complained of resistance by Espinosa and Frago to establishment of manufacturing. Calderon Quijano, Carlos III vol. 1, 506, notes that Espinosa and Frago were "always" opposed to the factories. 32. Bucareli to Arriaga, December 23, 1771, in Velasco Ceballos, vol. 2, 5. 33. Bucareli to Arriaga, December 23, 1771, in Velasco Ceballos, vol. 2, 5. 34. Bucareli to Arriaga, December 23, 1771, in Velasco Ceballos, vol. 2, 5-6. On the Bucareli visit, see also Calderon Quijano, Carlos III vol. 1, 506-507, and Bobb, pp. 253-254. 35. Hierro, September 28, 1770, Regulaclon que forma la C.G. de la Renta del Tabaco del Reyno de N.E. de las utilidades que la proporcionara en cada un ano la providencia de que el de rama se expenda labrado en puros y cigarros en todo el. BN, Tabacos, v. Nueva Espana, Real Hacienda, 1785, vol. 1, ms. 19 (1332), fols. 32-33.

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133 Hierro, October 19, 1771, Estado en que para dar una idea de las utilidades que deja a la Renta del Tabaco del Reyno de N.E. la labor de Puros y Cigarros por su cuenta. BN, Tabacos, v. Nueva Espana, Real Hacienda, 1785, vol. 1, ms. 19 (1332), fols. 53-53v. Hierro, April 13, 1772, Estado en que para dar una idea de las utilidades que deja a la REnta del Tabaco del Reyno de N.E. la labor de Puros y Cigarros por su cuenta. BN, Tabacos, v. Nueva Espana, Real Hacienda, 1785, vol. 1, ms 19 (1332), fols. 64-65. Bucareli, of course, would not have seen the 1771 account, since it was prepared in 1772. See also Vega to Branciforte, July 10, 1795, AGN, Ramo, vol. 495, fols. 102-103v, 36. Vega to Branciforte, July 10, 1795, AGN, Ramo, vol. 495, fol. 102. 1771 profits were thirty six percent, 37. Hierro, September 28, 1770, Regulacion, BN, Tabacos, v. Nueva Espana, Real Hacienda, 1785, vol. 1, ms 19 (1332), fol. 32v. Hierro noted, for example, that officials would not deduct the weight of the cords used to tie the manojos. The cords weighed two onzas. 38. Hierro, September 28, 1770, Regulacion, BN, Tabacos, v, Nueva Espana, Real Hacienda, 1785, vol. 1, ms. 19 (1332), fols. 32v-33. 39. Galvez to Bucareli, November 22, 1771, in Galvez Informe, Appendix 3, p. 176. 40. Galvez, Informe p. 40. 41. Ibid p, 41, Vega to Branciforte, July 10, 1795, AGN, Ramo, vol. 495, fol. 154, states that on September 6, 1766, Armona reported the existence of 543 private shops in Mexico City. 42. Galvez, Informe p, 41. Baez Macxas, 485-1156, lists 133 tobacco shops in 1753, serving a population of about 33,000 in part of Mexico City. 43. Vega to Branciforte, July 10, 1795, AGN, Ramo, vol. 495, fols. 86v-87, Vega provides no date for the 1768 report. Writing in 1795, he states that the Puebla and Durango reports, one of which was dated December 6, 1768, were lost. 44. Vega to Branciforte, July 10, 1795, AGN, Ramo, vol. 495, fols. 86V-87. 45. Vega to Branciforte, July 10, 1795, AGN, Ramo, vol. 495, fols. 86V-87. Vega refers to a June 22, 1768 report by the factor of Veracruz stating that all tobacco shops were abolished in that factoria by order of Galvez in November, 1765. Reports on Orizaba and Cordoba were dated June 25, 1768 and on Teusitlan, September 28, 1768. 46. Vega to Branciforte, July 10, 1795, AGN, Ramo, vol, 495, fols. 103V-104. Vega states that the 1772 report was the result of a September 12, 1770 viceregal order. Espinosa, however, on January 2, 1772, presented

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134 an August, 1770 report on the Mexico City shops, entitled Razo'n de las Cigarrerias y Purerias que existen en esta Capital de Mexico, segun la visita y reconocimiento que se practice en el mes de Agosto de 1770, AGN, Ramo, vol. 23, fols. 183-190. The list has 327 names and locations. Riva, in a letter to the Directors, December 1, 1773, AGN, Renta, vol. 1, fols. 3-3v, refers to a report on the Mexico City shops dated January 9, 1772. 47. Vega to Branciforte, July 10, 1795, AGN, Ramo, vol. 495, fols. 103V-104. 48. Letter of July 13, 1772, from Bucareli to the Directors, cited in Vega to Branciforte, July 10, 1795, AGN, Ramo, vol. 495, fols. 104105v. Vega notes Bucareli 's complaint that the report did not indicate the number of persons em.ployed in each shop. Croix, however, in his September 12, 1770 order had expressly ordered only cigarreros with shops to be counted. 49. Quoted in Riva to Directors, December 1, 1773, AGN, Renta, vol, 1, fol. 3. 50. Calderon Quijano, Carlos III vol. 1, 507. The royal order was dated March 20, 1772. 51. Bucareli to Directors, July 29, 1772, cited in Vega to Branciforte, July 10, 1795, AGN, Ramo, vol, 495, fols, 104-105v. 52. Calderon Quijano, Carlos III vol, 1, 507, states that Riva was commissioned because Bucareli knew the directors Espinosa and Frago would cause delays. He does not indicate the date of Riva's commission. 53. Riva to Directors, December 1, 1773, AGN, Renta, vol. 1, fol. 3, referred to the "spirit" of the 1764 Real Instruccion and to Croix's September 12, 1770 order. He quoted Bucareli 's July 13, 1772 order which, like Croix's order, called for abolition of the tobacco shops. 54. Riva to Directors, December 1, 1773, AGN, Renta, vol. 1, fols. 3-3v, 8-8v. The abolition process is a partial mystery. The 503 tobacco shops which disappeared did so, Riva states, because of deaths, transfers to other jobs and selling out. 55. Riva to Directors, December 1, 1773, AGN, Renta, vol. 1, fols. 3-3v, 8-8v. 56. In 114 of the shops there were 643 workers, 193 (thirty percent) of whom were women. The remaining 32 shops had 48 workers, but Riva does not separate them by sex. Riva to Directors, December 1, 1773, AGN, Ramo, vol. 1, fols. 3v, 9-llv. 57. Riva to Directors, December 1, 1773, AGN, Renta, vol, 1, fols. 3v, 9-llv.

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135 58. Riva to Directors, December 1, 1773, AGN, Renta, vol, 1, fols. 3v, 9-llv. The average number of workers in each shop was 4.7. The reports ordered in 1772 appear to have been lost. Vega, writing in 1795, indicates that only Valladolid and Puebla data was available, in reports dated August 29, 1772, and March 7, 1773, respectively. The Valladolid shops contained from one to five workers and the Puebla shops up to twelve. 59. Monopoly outlets which sold rama were called tercenas 60. Riva to Directors, December 1, 1773, AGN, Renta, vol. 1, fols. 3v-7v, 12-15. 61. Riva to Directors, Decemberl, 1773, AGN, Renta, vol. 1, fol. 13. The loose cigarros were referred to as pilones Galvez Informe p. 41, states that the monopoly sold one dozen more cigarros for 1/2 real than private dealers sold before the monopoly was established. 62. Riva to Directors, December 1, 1773, AGN, Renta, vol. 1, fol. 12v. 63. Riva to Directors, December 1, 1773, AGN, Renta, vol. 1, fol. 12v. The Spanish terms for tinder and flint were yesca and piedras de lumbre, respectively. 64. Riva to Directors, December 1, 1773, AGN, Renta, vol. 1, fol. 4. 65. Riva to Directors, December 1, 1773, AGN, Renta, vol. 1, fol. 12v. 66. Riva to Directors, December 1, 1773, AGN, Renta, vol. 1, fols. 4-6, 11. 67. Frago to Bucareli, January 8, 1774, AGN, Renta, vol. 1, fols. 16-28. 68. Echeveste to Bucareli, February 21, 1774, AGN, Renta, vol. 1, fol. 31v. 69. Echeveste to Bucareli, February 21, 1774, AGN, Renta, vol. 1, fols. 31-32. 70. Espinosa, Hierro and Echeveste to Bucareli, August 6, 1774, AGN, Renta, vol. 1, fols. 35-36. 71. Espinosa, Hierro and Echeveste to Bucareli, August 6, 1774, AGN, Renta, vol. 1, fols. 36v-37. 72. Espinosa, Hierro and Echeveste to Bucareli, August 6, 1774, AGN, Renta, vol. 1, fols, 37-37v. 73. Espinosa, Hierro and Echeveste to Bucareli, August 6, 1774, AGN, Renta, vol, 1, fols. 38v-39. 74. Areche to Bucareli, August 19, 1774, AGN, Renta, vol. 1, fols, 40-40v, and Bucareli decree, August 20, 1774, AGN, Renta, vol. 1, fol. 40v.

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136 75. Rlva to Directors, October 23, 1774, AGN, Renta, vol, 1, fol, 42, I was unable to locate the replies to the questions in either the Renta or Ramo collections. 76. Riva to Directors, October 23, 1774, AGN, Renta, vol. 1, fols. 41-41V, 77. Riva to Directors, October 23, 1774, AGN, Renta, vol. 1, fols. 41-41V. 78. Riva to Directors, November 13, 1774, AGN, Renta, vol. 1, fols. 159-160V. 79. See Espinosa, Hierro and Echeveste to Bucareli, August 6, 1774, AGN, Renta, vol. 1, fol. 36v. 80. Riva to Directors, November 13, 1774, AGN,. Renta, vol. 1, fols. 161-164, 81. Riva to Directors, November 13, 1774, AGN, Renta, vol. 1, fol. 169v. 82. Riva to Directors, November 13, 1774, AGN, Renta, vol. 1, fols. 171-174V, 83. Riva to Directors, January 12, 1775, AGN, Ramo, vol. 89, fol. 154. Final arrangements and approval for Riva's proposals can be found in Espinosa, Hierro and Echeveste to Bucareli, November 16, 1774, AGN, Renta, vol. 1, fols. 148-149v; Areche to Bucareli, November 18, 1774, AGN, Renta, vol. 1, fols. 148-148v; Bucareli decree, November 18, 1774, AGN, Renta, vol. 1, fol. 148v; Riva to Directors, December 14, 1774, AGN, Renta, vol. 1, fols. 150-151v; Directors to Riva, December 21, 1774, AGN, Renta vol. 1, fols. 152-153. 84. Riva to Directors, January 20, 1775, AGN, Renta, vol. 1, fols. 47-48, 56. Espinosa, Hierro and Echeveste to Bucareli, January 24, 1775, AGN, Renta, vol. 1, fol. 65, stated that the estanquillos had been established by Riva "without the least complaint." 85. Riva to Directors, January 20, 1775, AGN, Renta, vol. 1, fol. 47. The Spanish term was "derecho de antiguedad." 86. Riva to Directors, January 20, 1775, AGN, Renta, vol. 1, fol. 47v. 87. Riva, December 20, 1774, Prevenciones que se hacen a los estanqueros, mientras que se les da la Ynstruccion impresa, AGN, Renta, vol. 1, fols. 59-61. 88. Carrera Stampa, "Pesos y medidas," 18. One cuartillo was equal to 0.4566 litros dry measure, or about 1/2 liter. 89. Riva, Tarifa of January 1, 1775, AGN, Renta, vol, 1, fol. 63.

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137 90. Bando, Croix, May 14, 1767, AGN, Renta, vol. 47, fols. 246246v. Prices were determined by distance from the Villas. They were set as follows (prices in reales per libra) : Archbishopric of Mexico (Administration General of Mexico) 6 Bishopric of Puebla (Factorias of Puebla, Orizaba, Cordoba, Teusitlan, Jalapa, Veracruz) 6 Bishopric of Oaxaca (Factoria of Oaxaca) 6 Bishopric of Valladolid (Factoria of Valladolid) .... 6 1/2 Bishopric of Guadalajara (Factoria of Guadalajara) ... 6 1/2 Bishopric of Durango (Factoria of Durango, excluding Chihuahua) 7 Nuevo Reino de Leon 7 Provlncia de Coahuila 7 Corregimiento de Chihuahua 7 1/2 91. Riva to Directors, September 29, 1775, AGN, Renta, vol. 1, fols. 68-68v, 74. 92. One grano is equal to one-twelfth of a real. 93. Riva to Directors, September 29, 1775, AGN, Renta, vol. 1, fols. 69-70. The other eighteen estanqueros would earn 6 reales daily by the plan, or more as sales increased. Riva did not indicate where the estanqueros were to be relocated. 94. Riva to Directors, September 29, 1775, AGN, Renta, vol. 1, fols. 70-70v. 95. Riva to Directors, September 29, 1775, AGN, Renta, vol. 1, fols. 70-70V. 96. Riva to Directors, September 29, 1775, AGN, Renta, vol. 1, fols. 77-77V. 97. Riva to Directors, September 29, 1775, AGN, Renta, vol. 1, fols. 75v-76. 98. Riva to Directors, September 29, 1775, AGN, Renta, vol. 1, fols. 79-83. 99. Espinosa, Hierro and Echeveste to Bucareli, November 23, 1775, AGN, Renta, vol. 1, fols. 84v-93v; Areche to Bucareli, December 6, 1775, AGN, Renta, vol. 1, fols. 94-lOlv. 100. Bucareli decree, November 19, 1776, AGN, Renta, vol. 1, fol. 102. 101. Galvez to Bucareli, November 22, 1771, in Galvez Informe Appendix 3, p. 174, states that the three new co-directors were granted the same powers as Espinosa and Frago. They were to advise the viceroy of all measures they judged useful to the Renta.

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138 102. Espinosa, Hierro, Echeveste and Rlva to Bucareli, July 30, 1773, AGN, Renta, vol. 12, fol. 406, refer to the April 30, 1771 representation to Croix. Riva replaced Huarte as administrator general and co-director when Huarte died. 103. Arriaga to Bucareli, March 23, 1774, AGN, Ramo, vol. 46, fol. 249. Arriaga asked Bucareli if Espinosa and Frago could cooperate adequately to perform the tasks required of them. 104. Bucareli to Arriaga, August 27, 1774, AGN, Renta, vol. 47, fol. 458v, refers to Espinosa 's letter of September 7, 1771 criticizing Erago. 105. Bucareli to Arriaga, August 27, 1774, AGN, Renta, vol. 47, fol. 458v. Espinosa, Hierro, Riva and Echeveste to Bucareli, July 30, 1773, AGN, Renta, vol. 12, fols, 405-412. This letter refers to Frago letters to the viceroy, dated March 17 and June 11, 1773. Bucareli to Arriaga, August 27, 1774, AGN, Renta, vol. 47, fol. 458v, mentions a Frago letter of July 11, 1771, and the directors' reply of September 3, 1771. 106. Bucareli to Arriaga, August 27, 1774, AGN, Renta, vol. 47, fol. 458v. 107. Riva to Bucareli, July 31, 1773, AGN, Renta, vol. 12, fols. 162-164V. 108. Riva to Bucareli, July 31, 1773, AGN, Renta, vol. 12, fols. 162-171V. > 109. Bucareli to Arriaga, August 27, 1774, AGN, Renta, vol. 47, fols. 459-459V. 110. Galvez to Bucareli, November 22, 1771, in Galvez Informe, Appendix 3, p. 173, states that Espinosa and Frago were unable to agree on monopoly policy, and therefore caused considerable problems. 111. Bucareli to Arriaga, August 27, 1774, AGN, Renta, vol. 47, fols. 460-460V. 112. Royal order, March 11, 1776, University of Texas Rare Books Collection, Spain, Sovereigns, 1759-1788 (Charles III). 113. Royal orders of May 1 and July 26, 1775 commended Riva's work, paid him 6,000 pesos for costs and raised his salary as administrator general from 3,000 pesos to 4,000 pesos annually. Vega to Branciforte, July 10, 1795, AGN, Ramo, vol. 495, fol. 122v. 114. Galvez to Bucareli, April 20, 1776, AGN, Renta, vol. 47, fol. 466. Frago voluntarily renounced his new position. Bucareli to Directors, September 24, 1776, Renta, vol. 47, fol. 476. Hierro to Bucareli, May 29, 1774, AGN, Renta, vol. 33, fol. 53, includes a note at the bottom which indicates the date on which Hierro and Riva took over as co-directors in 1776.

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139 115. Bucareli decree, November 19, 1776, AGN, Renta, vol. 1, fols. 102-102V. 116. Hierro and Riva to Antonio Primo de Rivera and Juan de Schiafino, November 23, 1776, AGN, Renta, vol. 1, fols. 104-104v. 117. Raymundo Gomez, August 17, 1781, Plan que comprehende los 73 estanqulllos que existen en el dxa en el casco de esta capital con razon de los que deven suprimirse senalados con la Letra S segun lo propuesto por el Administrador del Casco Don Raymundo Gomez en el suyo de 20 de Junio, y poniendo a dichas estanqulllos el sueldo fijo diario, AGN, Renta, vol. 6, fols. 434-434V. 118. Gomez, October 29, 1785, Razon de los tlacos y Quartillas de cigarros que expenden los estancos de esta capital diariamente segun declaraclon de ellos, AGN, Renta, vol. 12, fols. 93-93v. 119. 1787, AGN, Ramo, vol. 300. 120. 1801, AGN, Ramo, vol. 10, fols. 6-7v. 121. 1801, AGN, Ramo, vol. 10, fols. 6-7v. 122. Galvez to Bucareli, July 27, 1776, AGN, Renta, vol. 3, fols. 115-115v. The price was to be raised by reducing the number of puros and cigarros sold for 1/2 real. 123. Directors to Bucareli, October 22, 1776, AGN, Renta, vol. 3, fols. 116-117. 124. Directors to Bucareli, October 22, 1776, AGN, Renta, vol. 3, fols. 117v-119v. The directors also called for the abolition of number 23 cigarros at this time and Bucareli ordered their request on November 19, 1776. 125. Directors to Roque Yanez February 12, 1777, AGN, Ramo, vol, 89, fols. 63-70. 126. Yanez to Directors, February 24, 1777, AGN, Ramo, vol. 89, fols. 75-75V. 127. Yanez to Directors, February 24, 1777, AGN, Ramo, vol. 89, fols. 75v-80v. 128. Directors to Yanez, March 26, 1777, AGN, Ramo, vol. 89, fols. 95V-97. 129. Yanez to Directors, April 1, 1777, AGN, Ramo, vol. 89, fol. 106, and April 1, 1777, AGN, Ramo, vol. 89, fols. 103-104. 130. Directors to Trigo, February 12, 1777, AGN, Ramo, vol. 89, fols. 82-86.

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140 131. Directors to Trigo, February 12, 1777, AGN, Ramo, vol. 89, fols. 82-86. Trigo's letter was dated November 22, 1776. 132. Directors to Trigo, February 12, 1777, AGN, Ramo, vol. 89, fols. 82-86. 133. Trigo to Directors, February 28, 1777, AGN, Ramo, vol. 89, fols. 87-93. 134. Directors to Trigo, March 26, 1776, AGN, Ramo, vol. 89, fols. 97V-101. 135. Riva to Bucareli, April 8, 1777, AGN, Ramo, vol. 89, fols. 107-108. 136. May 6, 1780, Estado que manifiesta las utilidades que han dexado la Renta las Fabricas de Puros y Cigarros por cuenta de ella en el ano de 1779, BN, Tabacos, v. Nueva Espana, Real Hacienda, 1785, vol. 1, ms. 19 (1332), fol. 262, shows new factories in Guadalajara and Queretaro fully operative in 1779. 137. Vega to Branciforte, July 10, 1795, AGN, Ramo, vol. 495, fols. 124-125. 138. Vega to Branciforte, July 10, 1795, AGN, Ramo, vol. 495, fols. 123-124. Orders were communicated to the two men on December 6, 1776 and November 27, 1777. The orders probably included instructions concerning the enlargement of the Puebla factory. 139. Vega to Branciforte, July 10, 1795, AGN, Ramo, vol. 495, fol. 126v. Barbosa received his orders of July 12 and August 22, 1777. He reported to the directors on August 29.

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CHAPTER FIVE THE MANUFACTURING SECTORY: THE MEXICO CITY FACTORY The manufacturing sector of the tobacco monopoly was organized between 1769 and 1777. During this period the Renta completed the task of abolishing all tobacco shops in the colony and brought four factories into production, in Oaxaca, Orizaba, Puebla and Mexico City. The factories of Guadalajara and Queretaro were added in 1779. The elimination of the private shops and the establishment of the factories was part of a dual process through which the monopoly gained complete control of all production of labrados in New Spain. Renta officials often referred to this change as "perfecting" the monopoly. The creation of the factory system involved the transferral of the tobacco industry from private to state control, a process which required the relocation of both tobacco shop owners and workers. To avoid massive unemployment and possible social turmoil, the monopoly made a concerted effort to assure that all owners and workers would be employed in either the estanquillos or the factories. The factory in Mexico City was by far the largest, usually producing about two-thirds of all labrados. Located in the population and administrative center of the viceroyalty, it was the focal point of all decision making concerning the manufacturing sector. This chapter examines the organization and operation of the factory system in the capital city. It covers the years from 1769 to 1777, the period in which the monopoly completely developed the Mexico City factory. 141

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142 The factory opened in 1769 with a single unit of 400 male workers, called the Patio del Reyno In 1770, when Echeveste completed his commisrsion and turned over the factory to the permanent administrator, Ysldro Romana, the Patio employed 900 workers. In 1771 the directors added a second unit comprised entirely of women, known as the Patio de Mugeres The employment of women in the factory, common in the tobacco shops, probably owned to the influence of Joseph de Galvez Although he regarded the factories as a valuable source of work for the poor in general, Galvez stressed the usefulness of employing w^omen. He presented the factories as "asylums" in which poor women could escape the "dangers" and "risks" to which they were frequently exposed. In return, their special value to the monopoly was their docile nature which, Galvez believed, made them less prone than men to engage in theft or fraud and more willing to 2 subject themselves to inspections and supervision. In his 1771 Informe the visitor suggested that factories in Mexico, Puebla and Orizaba would need to employ a total of 12,000 workers to supply labrados to the entire viceroyalty. The factory in Oaxaca would continue to supply its own 3 ^ jurisdiction. By the time Galvez left New Spain in 1771, 5,600 workers 4 entered the Mexico City factory each day, including 1,600 women. By 1772 the factory employed 7,400 workers, 2,200 of whom were women. The organization of the factory into two patios did not change until the tobacco shops were abolished in 1775. With the opening of the estanquillos in January, 1775, administrator general Riva added a third patio, the Patio de Mexico comprised entirely of men. The labrados manufactured by this new patio were to be sold only in Mexico City, replacing the puros and clgarros formerly provided by the tobacco shops. When Riva examined the private shops in 1774, he also prepared the factory to absorb both

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143 the owners who did not receive estanquillos and the workers. To minimize any negative reaction by the public, he established the Patio de Mexico to employ the same Mexico City workers who manufactured the labrados consumed in the city. Neither the consumers nor the workers, he hoped, would be seriously inconvenienced, According to Riva, 400 shop owners, 1,200 male workers and 500 female workers were relocated when he abolished the shops. The addition of the new workers brought the total in the factory to 6 7,500. Regulations for the day-to-day operation of the factory were prescribed in a series of instructions issued between 1768 and 1770. A general Instruccion to the factors on March 9, 1768 ordered the establishment of one factory in each factoria and outlined general administrative procedures, such as accounting, storage and inspections. It limited explicit instructions for factory workers mainly to exhorting them to show proper obedience to superiors and to avoid fraud and drunkenness. On June 9, 1770, Viceroy Croix published an important set of regulations for the Mexico City factory, entitled Reglamento de Penas or Statute of Penalties, which explained the rules to be observed by the workers and the punishments to be inflicted for breaking them. Workers not arriving at work on time would not be admitted that day. All workers were to subject themselves to careful inspections, including examination of clothing and food containers, upon entering and leaving the factory. Legal arms were to be left with the guards j illegal arms would be confiscated and the employee expelled for the day. Those persons appearing drunk would be prohibited from working for eight days. Workers engaging in disputes could be ejected, and they were encouraged to take complaints to supervisors or to the administrator. Disobedience was punishable by immediate dis8 charge.

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144 The Reglamento also provided for an elaborate system of corporal punishment. Disruptive conversations, theft of the production or materials of other workers, refusal to accept rejection of poorly-made labrados, challenges for fights and threatening or striking another worker were punishable by four to twenty-four hours locked in stocks, either head-first or feet-first. Workers committing more serious violations, including improper preparation of paper, malicious destruction of tobacco or paper, carelessness, destruction of the baskets of tobacco used by workers, and theft of clothing or other personal items were subject to being locked into the stocks, followed by discharge from the factory. One crime, theft of tobacco or labrados, was to be punished by tying the worker to a post in the center of the factory and eventually banishing him to a presidio Finally, workers were to show proper respect for the administrator by 9 standing when speaking with him. The Mexico City factory ordinances of June 15, 1770 outlined the duties of all factory personnel, including its administrators. Updated in 1793, they provide a useful historical source for understanding the operation of the Mexico City factory. They do not present a complete explanation of the procedures or organization of the factory, such as pay scales, working conditions, classes of labrados manufactured and other such features. Much of the analysis of the operation of the Mexico City factory which follows employs the materials from the ordinances of 1770 and 1793. It is supplemented with documentation selected from numerous other sources. The factory operated within the larger administrative network of the tobacco monopoly. The head of the monopoly in New Spain was the viceroy, in his capacity as super intendente general de real hacienda Apart from minor details of daily operations, all monopoly decisions required the

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145 viceroy's approval. In almost all instances, the Viceroy consulted the opinion, or dictamen of the fiscal de real hacienda fiscal de J^ civil 12 or the asesor of the monopoly. Within the monopoly itself, the highest authority was the Direccion General Although the monopoly began with only one director in 1764, Jacinto Diez de Espinosa, the junta added Antonio del Frago as a second director in 1765, The 1768 ordinances called for two directors, a system which survived until 1790, when the Crown ordered the monopoly to continue with only one, -^ The director with the most seniority resided at the monopoly's headquarters in Mexico City, the Casa Direccion in order to facilitate supervision and the communication of orders. Together, the directors were responsible for managing the monopoly at the level of both policy and day-to-day administration, a distinction referred to in the 1768 ordinances as lo^ econo^ico y_ mecanico Their most Important duties, defined broadly, were to assure adequate supplies and proper distribution of leaf tobacco and labrados. Their other functions ranged from approval of appointments and salaries to authorization for changes in manufacturing procedures. Because of the highlycentralized organization of the administration, it would not be an exaggeration to say that virtually every feature of the monopoly fell within the jurisdiction of the directors. The fiscal management of the entire monopoly rested in the hands of the contador general. Although he was not granted authority to decide policy matters, in practice the contador participated in decisions outside his strictly-defined cuenta y razon or accounting, responsibilities. The ordinances provided for direct communication between the contador and both the directors and the viceroy, and thereby assured that he would have considerable input on monopoly policy. The personalities of the contador and the directors would play an important role within this

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146 structure of authority. The accounting functions of the contador were clearly defined. All accounts concerning the monopoly, from the growing of tobacco to the final sale of labrados, were subjected to his examination and approval. From the individual accounts, the contador prepared an annual general account (estado general) of total sales, costs and profits. The contaduria also served as the monopoly's archive. The treasurer of the monopoly managed the funds and kept accounts of the movements of all monopoly revenues, in cash or on paper. In 1783 the treasury was united with the treasuries of the gunpowder and playing card monopolies. The depository for tobacco and paper in New Spain was the Almacenes Generales or general warehouses, located in Mexico City. The Almacenes were headed by an administrator, the fiel administrador de almacenes who supervised all. personnel, involved in storage, receipt or delivery of rama, labrados or paper. One subordinate, the fiel del peso, specialized in weighing all tobacco entering or leaving the warehouses. Another employee, the of icial de libros exercised direct supervision over all receipts and deliveries, prepared accounts on the movement of tobacco and paper and contracted with the arrieros or muleteers, for transport of tobacco and paper. Nothing could be moved in or out of the warehouses without the participation of the directors general and the contador general. The administration, or management, of the Mexico City factory was headed by the administrator. Ysidro Romana, appointed in 1769, served in that position until his death in 1792, when he was replaced by Miguel 19 Puchet To assure close supervision and to facilitate communication of orders, Romana was required to live in the factory. As head of all factory personnel, he was to supervise all factory operations, both in

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147 the administration and on the factory floor, He nominated a,ll employees to the directors of the monopoly for final approval, ordered payment of salaries or wages and participated in the receipt and delivery of all tobacco, paper, labrados or funds. He was also responsible for enforcement of the Reglamento de Penas, Finally, he was instructed to advise the directors and the contador of the monopoly of any improvements that could be made. Above all, he was to encourage efficiency, to assure 20 maximum profitability. The contador of the Mexico City factory, Benito de Betosolo from 1773 to 1793, was responsible for the factory accounts. He participated in the receipt and delivery of tobacco, paper, labrados and funds and kept careful accounts for payment of salaries and wages and for renting of buildings used by the factory. All correspondence concerning the factory was placed in his archive, Each month he presented an account of income and expenditures, profits and inventories, including funds on hand. At the end of each year he supervised a general inventory, re-weighing ( repeso ) of leaf tobacco and recounting of funds. Finally, he was to advise the administrator of any problems, and was allowed to communicate directly 22 with the director and contador of the monopoly. The paymaster, or pagador possessed one, of three keys to the factory's treasury, the well-known caja de tres Haves Funds could not be removed or deposited without his key and those of the administrator and contador. In general, the pagador 's duties were to carefully account for the receipt 23 and expenditure of all funds in the factory. Two fieles de almacenes or administrators of the factory warehouses, rounded off the management of the factory. Their principal obligation was to receive and deliver tobacco, labrados and paper and to keep accounts of all movements. They

PAGE 156

148 were also required to assure proper storage of these items, to prevent T 24 spoilage. An explanation of the functions of the other factory personnel is best approached with a step by step examination of the manufacturing process. When leaf tobacco was received from the Villas, it was stored in the general warehouses, actually a number of buildings located around the city and in the factory itself, Tobacco to be used for cigarros was then dried (asoleo) at the factory on clear days, stored in sacks overnight, and subjected the following day to the grinding ( cernido ) The workers responsible for grinding tobacco for cigarros, using simple handoperated machines and sieves, were referred to as cernidores Both the drying and grinding were regarded as particularly important processes to assure a good yield of ground tobacco from the leaves. Proper drying, followed by careful grinding to separate out the palos and granzas minimized the amount of tobacco powder, not to be confused with snuff, which was of no value and was flushed into the canals. The usual yield from one libra (sixteen ounces) was about twelve ounces of cernido. The different classes of rama were mixed only after they were ground. Good quality tobacco unable to be used for puros was often added to fortify the mixture 25 for cigarros. The workers who produced the cigarros were knoim as torcedores oficiales or operarios The operarlos arrived in the morning with paper which they had already prepared the previous evening. Paper was folded and formed into channels or tubes (encanalodo ) in the workers' homes, usually with the assistance of their families. The technique for folding was based on the number of cigarros to be derived from each sheet of paper, which in turn depended upon the class of cigarro being produced. One sheet of number 10 's for example, yielded 86 cigarros, while a sheet of

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149 number 14 's yielded 124 cigarros, because the number 14' s were thinner. The operarios were by far the largest single group in the factory, usually numbering over 4,000. They worked according to their ability and were paid for the number of caxillas they produced each day. The operarios' daily work load was measured in terms of the quantity of paper they used. A full days work, known as a tarea was to manufacture cigarros from 5 27 cuadernos of 5 sheets (pliegos ) each, or 25 sheets. Many workers, especially the aged, could not complete a full tarea each day. Some were able .to manufacture three-quarters of a tarea, or a tercia (3 1/2 cuadernos) 28 and others only one-half of a tarea, or a media tarea (2 cuadernos). Almost ninety percent of the male operarios and about forty percent 29 of the women completed a full tarea in 1794. 30 Completed cigarros passed from the operarios to the embolvedores 31 or wrappers, and to the recontadores or recounters. These employees prepared the packs (caxillas ) inspected the cigarros for defects, counted the proper number of cigarros for the caxillas of the different classes and wrapped the cigarros carefully in the packs. Their principal responsibility, apart from assuring that the proper number of cigarros be placed into each pack, was to wrap the cigarros to prevent damage or loss of 39 tobacco from inside each individual cigarro. The caxillas were sent to 33 the encaj on adores or packers, who placed them into large wooden boxes, or cajones The boxes, including packing materials and nails, weighed over 54 libras. The average box contained between 4,156 number 10 and 5,844 number 13 caxillas of cigarros, or 3,359 packs ( papeles ) of puros, weighing about 146 libras. The loaded boxes, then, weighed 200 libras, 34 or 8 arrobas, The manufacture of puros was carried out by persons referred 35 to as pureros or simply operarios Leaves selected for puros had to be

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150 dampened prior to their being used, in order to give them the proper softness and moisture content. The selection of leaves for the x