Tuesday, November 5, 2019

Grain Markets, Free Trade and the Bourbon Reforms: The Real Pragmática of 1765 in New Spain


  By Amilcar Challu
Originally published in the Colonial Latin American Review (2013) 22:3.
The Real Pragmática of 1765 of Free Grain Trade was one of the most influential events in eighteenth-century Spanish political and economic history? But was it influential in the Americas? Despite the abundant scholarship on the Bourbon reforms, we do not know much about the application of the Pragmática or more broadly about policies that affected domestic grain trade in the Americas. In this article I argue that the Pragmática was influential in increasing the participation of the viceroy in matters of wholesale and regional grain trade. Such changes in policies as applied in New Spain involved both pragmatism and a centralization of power, rather than a dogmatic support for free trade policies or a staunch support of traditional doctrines. In this I believe that New Spain did not differ from contemporary Western European countries, in which free trade was constantly being negotiated between different actors and authorities of various levels.
The Real Pragmática (Royal Decree) of 11 July 1765, issued by Charles III, was a fundamental piece of legislation in the political and economic history of the Spanish monarchy. A hallmark of the Spanish ilustración (Enlightenment), it purported to deregulate the domestic grain trade and create new rules for foreign imports. Despite the expectation that such reforms would improve Spain's domestic food supply, the decree instead resulted in spiraling prices, riots throughout the peninsula, and a major political crisis. Some of its provisions were subsequently revoked, but central aspects deregulating regional trade remained in place until the Cádiz regime more decisively turned toward economic liberalization in the 1810s.
While the Real Pragmática of 1765 is widely regarded as pivotal in the development of Charles III's monarchy in Spain, its influence on domestic trade in the Americas is little understood. Despite the long historiography about the Bourbon reforms in the colonies, there is no discussion of the application or influence of the Real Pragmática of 1765 beyond the borders of Spain.[ 1] For instance, in his recent work on the rise of capitalism in the Bajío, John Tutino briefly discusses the applicability of changes in overseas trade regulations in 1765–1767 and the ripple effects of the Spanish riots throughout the empire (2011, 232), but he omits any discussion of the decree that liberalized grain trade and its possible application to New Spain. The omission is symptomatic of a widespread perception that ilustrado policies in the Americas emphasized administrative efficiency, tax collection, and overseas trade. By contrast, the historiography treats domestic trade reforms that were so central in the metropolis as being of secondary importance in Spanish America (Salvatore [55], 28–30).
By examining the use of the Real Pragmática in trials and administrative actions, I explore the repercussions of the Bourbon reform on New Spain's grain markets, the most 'domestic' of all markets. The scholarship on food supply and grain prices in New Spain is abundant, yet it has traditionally emphasized urban institutions and the local sphere of the grain trade. Grain markets usually are presented as fragmented, dominated by the interests of powerful large commercial farmers (hacendados) and the constant failure of local authorities to maintain adequate stocks in city granaries (Espinosa Cortés and Andrade García [15]; Florescano [16]; Ouweneel [41], 107–19; Suárez Argüello [62]; Tutino [68], ch. 5; Van Young [69]). Such emphasis on the local sphere has been a deterrent to exploring interregional connections and jurisdictional problems. Moreover, the local focus has led to the conclusion that changes in grain trade policy, if they ever happened, were either reactions to intense agricultural crises (Van Young [69], 102) or reflections of vaguely defined laissez-faire ideas (Ouweneel [41], 107–9, 120–22). By posing the question of how the Real Pragmática of 1765 was received in New Spain, I shed light on a regional dimension of food supply policies in New Spain, and on the broader dialogue with similar policies in Europe.
My argument is that the Real Pragmática informed decisions and discussions on the grain trade through the first decade of the nineteenth century. It had little bearing on matters of retail trade, because the viceroyalty did not have the extensive price controls in place in Spain. Yet in a few significant cases it guided the regulation of the regional grain trade, giving central authorities more power in mediating inter-jurisdictional conflicts and limiting the traditional power of local magistrates. I contend, therefore, that the Real Pragmática furthered the transformations in governance and economic relations that were sweeping New Spain in the last decades of the colonial period. Such changes involved both pragmatism and a centralization of power, rather than merely dogmatic support for free trade or staunch support of traditional doctrines that protected the rights of local districts over their own production.

The Real Pragmática of 1765 in Spain


Traditional grain market policies in Spain relied on price controls, established territorial controls over the transfer of grain from producer to consumer regions, and regulated the import and export trade with other countries. Important cities such as Madrid had special privileges to acquire regional production that superseded the rights of local districts to regulate their own trade (Anes [ 2], ch. 10; Herr [30], 32–34; Llopis Agelán [34]). As a result, the grain trade was a highly regulated activity in which moral-economic considerations played a central role in the resolution of conflicts between different parties (Grafe [26], 42).
Over the eighteenth century, western European countries implemented reforms to liberalize domestic grain trade. France and England, for instance, limited the power of local authorities to impose prices, regulate venues of commercialization, and restrict trade out of their jurisdiction.[ 2] Spain also followed this trend. In the 1750s and early 1760s vibrant intellectual debates centered upon such economic issues (Sánchez-Blanco [57]). For example, the liberalization of grain markets was one of the major topics that drew inspiration from physiocracy and local economic thought (Olaechea [40], 27). Soon after reforms in France (Fox-Genovese [21], 62–66), the Marquis of Esquilache and Pedro Rodríguez de Campomanes obtained from Carlos III the Real Pragmática of 11 July 1765 that put Spain at the forefront of the wave of liberalization of grain trade in Europe (Herr [30], 34–36).
In its ten articles, the Real Pragmática restructured the regulations of grain trade at three major levels: retail, domestic wholesale, and import-export (1765). It abolished the fixed prices and any restrictions on retail trade of grain regardless of shortage conditions (arts. 1–2). It maintained traditional local institutions such as municipal granaries (pósitos) and public grain exchanges (alhóndigas), and it sustained the traditional principle that the local population had privileged access to food. At the wholesale level, it liberalized the controls on merchants: it decreed the free circulation of grain in the kingdom, and granted merchants the freedom to buy, store, and sell grain provided that they maintained proper accounting books, refrained from entering in monopolistic practices and kept the granaries open for local residents (arts. 3–8). Finally, it authorized the import or export of grain under certain conditions (arts. 9–10).
As in Britain and France, the deregulation of markets in Spain was highly contested. The rising prices that followed the Pragmática triggered the Motín de Esquilache, one of the most severe riots in modern Spanish history, tarnishing the future of Charles III's government (Domínguez Ortiz [14], 101–17). After the Motín, the government turned increasingly authoritarian and regalist, stifled the climate of intellectual exchange in which ideas such as the free trade of grain had incubated, and relentlessly persecuted perceived enemies (Sánchez-Blanco [57], 317–18). It also moved the agenda away from domestic economic reforms and instead turned its attention toward better controlling the overseas colonies (Stein and Stein [61]). The origins of the widespread riots were complex, but a key factor was opposition to free grain trade and the abolition of fixed prices. Following the riots, the king turned to a more pragmatic course of action, granting flexibility on matters of retail trade (Vizcaíno Pérez [70], 115–20; Polt [48], 25; Llopis Agelán [34], 24; Olaechea [40], 28–29; Domínguez Ortiz [14], 101–10 and 196). Wholesale trade, however, remained liberalized, and the Pragmática effectively transformed the landscape of regional grain trades (Anes [ 2], 351–64 and ch. 12; Reher [53]; Llopis Agelán and Sotoca [33]). Highlighting the king's commitment to the Pragmática, a new position was created in large towns: the procurador síndico personero del común (common people's prosecutor), whose role was to guarantee the application of the principles of free grain trade (Herr [30], 36–38; Domínguez Ortiz [14], 161).
The decree of 1765 and its application in the following years embodied a vaguely defined line of economic thought that 'arose from a certain awareness of the working of economic forces and involved a conditional acceptance of economic freedom' (Herr [30], 63). Reformists such as Campomanes praised individual initiative, but ultimately distrusted the effects of the market and believed that government intervention was necessary to contain its abuses. This reflected the traditional paternalist stance of local authorities. Supporters of laissez-faire policy were marginal in the circles of power, but would increasingly articulate their ideas after Gaspar Melchor de Jovellanos's Report to the Madrid Economic Society. Economic liberalism only attained major influence in economic policy-making in the 1810s as it guided the legislation of the Cádiz constitutional regime (Herr [30], 62–68; Polt [48]; Smith [60]).

Grain Markets in New Spain


Highlighting a few key features of New Spain's grain markets will help us to better understand the significance of the Real Pragmática in the local context. In marked contrast with Spain, Mexico had two principal grain products: maize, which was consumed by most of the population, and wheat, which was more expensive but preferred in the cities, and a driver of commercial agriculture (Ouweneel [41], ch. 2; Morin [38], ch. 3 and 211–94; Van Young [69], chs. 4–5; Florescano [17]). A large portion of corn production took place in the lands of peasant communities. Indigenous peasant communities had special rights in terms of commercialization, taxes, and access to land, yet they lacked the large commercial farmers' access to capital. Corn was ubiquitous and returned high yields in regular years, driving the price down under normal circumstances. Yet, its demand went far beyond human consumption. Corn was truly the fuel of the Mexican economy: it was used to feed the mules that powered inland trade and the mining industry. Despite cases of commercial farmers storing corn for years, humidity content and technology limited the feasibility of long-term storage, which in turn heightened the importance of timely exchanges between regions. Wheat commanded a premium price, had lower yields, and required more inputs—irrigation in particular. It was profitable but required large outlays of capital. For the consumer, wheat arrived to the market at a time when corn started to be scarce (by the mid year), providing a convenient countercyclical alternative. The diversity of the agricultural sector—commercial and peasant, Spanish and indigenous— and the presence of two products that could act as substitutes in urban markets—wheat and corn—implied differences in the regulatory framework.
At the retail level, the sale of corn and wheat in New Spain was not as regulated as in the metropolis, as officials in the viceregal administration sometimes indicated (Fernández de Córdova in Florescano 1981, 619–21; Ouweneel [41], 107–9). Except in minor mining towns and in very extraordinary cases elsewhere, corn and wheat were not subject to quotas (tasas) to be filled from different districts (Sánchez Santiró [56]; Pérez Rosales [44]). Neither were fixed prices or price caps a regular measure, not even in the most dire circumstances. Like in Spain, however, most cities had an alhóndiga and a pósito, whose primary goal was to secure an adequate supply, preserving the competitive nature of the market.[ 3] The pósitos in New Spain used their stocks when the city supply was compromised, but they set the prices high enough to attract new shipments. This reflects the fact that the major goal of food supply policies was to attract a constant stream of grain shipments rather than ensuring the short-term affordability of the grain (Florescano [16]; Van Young [69], 88–89). This was perhaps a consequence of the diverse agricultural sector, the special status enjoyed by Indians and tithe collectors, and the immense demand of large mining centers such as Guanajuato and Zacatecas, which paid high prices for the corn they needed for their workers and mules.
Overseas grain trade was prohibitively expensive and heavily regulated during most of the colonial period. In 1767 the Crown attempted to change this by exempting flour shipments bound to Havana from the sales tax. That tax exemption created trade cycles that varied widely depending on Spain's involvement in wars with other European powers. This line of trade favored the commercial farmers and millers from Puebla, whose proximity to the port of Veracruz made them prime partners with Havana. Yet, despite the tax breaks, they still struggled to compete against American merchants who could sell flour in Havana at lower costs. By the early nineteenth century, imports from Philadelphia and Baltimore merchants were occasionally authorized to supply coastal areas of Yucatan.[ 4]
In between the urban institutions such as the alhóndiga, the pósito, and the flour mills, and trade over the Gulf of Mexico, there was a broad range of domestic transactions that did not involve very long distances but that certainly transcended the immediate boundaries of the local sphere. Supplying the cities, the village markets and mines involved a variety of actors that trod the roads of New Spain carrying their production for sale, or buying and selling. Hacendados, tithe collectors, merchants, and peasants seized opportunities by profiting from high price differentials that exceeded their costs of transportation (Amith [ 1], ch. 10; Challú [ 8], ch. 3).
Map 1, based on information on the geographic origin of corn shipments found in archival or published sources,[ 5] unveils the importance of regional trade in the supply of cities and mining centers. The map includes consumer centers of varying sizes: small towns in the fringes of the Bajío such as Zamora and León; provincial capitals such as Oaxaca, San Luis Potosí, and Valladolid; enclaves that drew production from the region such as the mines of Bolaños, Taxco, and Real del Monte and the port of Veracruz; and very large consumption centers such as Guadalajara, Guanajuato, Mexico City, Puebla, and Zacatecas. In all of those cases, with the notable exceptions of Mexico City and Veracruz, mules were the primary form of transportation. This selection of cities is not exhaustive and information is lacking for important centers in the densely populated intendancy of Mexico such as Cuernavaca and Querétaro. Yet, the map is still useful to draw inferences about the territorial extent of grain markets.
Graph: Map 1 Geographic Origin of Maize Supply in Select Urban Areas (c. 1740–1810).Sources: See Appendix for data on origin and destination of shipments. Political boundaries based on Commons [11]; Commons [12]; Gerhard [25]. (Note: The political boundaries correspond to subdelegaciones and intendancies according to the original design of 1788.)
We can glean from the map that towns, cities and mining centers drew corn from relatively distant regions and that often their supply areas overlapped. Large mining centers surrounded by arid environments (e.g. Guanajuato, San Luis Potosí, and Zacatecas) obtained a significant portion of their maize on a regular basis from distances farther than one hundred kilometers (sixty-two miles or five days of travel by mules). Large cities with fertile surroundings also attracted production from distant areas. For instance, Iguala was a regular supplier of Mexico City, and Sayula and Zapotlán el Grande were regular suppliers of Guadalajara. Perhaps more important than the distance itself is what the map reveals about the overlap of supply areas. The overlap is more apparent in the maize markets of the western bishoprics of Michoacán and Guadalajara, suggesting that consumer centers competed against each other to obtain their maize. In this region there was a twin development of a strong commercial agriculture and urbanization. Some of the cities had active mines with immense demand for corn to feed their mules, but some were towns in the midst of agricultural areas that had a strong manufacturing sector or served as intermediate hubs (Miño Grijalva [37], 199–245). The hubs that are not present in the map (e.g. Celaya, Querétaro, Salamanca, Salvatierra, and Valle de Santiago) likely had similar supply areas to those that are shown on the map (León, Valladolid, and Zamora). While the geographic extent of this grain trade was limited by our modern standards, it was rather broad from the perspective of historical actors given that it often involved journeys of several days. This required a logistical coordination: use of pasture, purchasing feed for the mules, housing for the itinerant merchants, etc. The trip often involved the passage through districts under the control of different local magistrates. Sending grain to almost all of these cities required moving through more than one jurisdiction.
In years of abundance this widespread domestic grain trade created opportunities without major frictions: consumer areas (such as mines, large cities, and rural areas that did not specialize in cereal agriculture) bought the surplus yield from cereal-producing districts. The population in the consuming area enjoyed increases in food supply, employers in consumer areas gained because maize costs were abated, and the population in the producing area maintained its food supply while benefitting from the employment and income generated by the outbound sales. Tensions arose in years of shortages and high prices that either affected whole regions or specific places. In response to scarce yields, small-scale producers retained the grain for their own consumption (Van Young [69], ch. 12; Ouweneel [41], 119–22) and needed to supplement their supply by buying food at high prices precisely at a time when merchants and agents scouted the local markets and hacienda granaries to purchase grain. As New Spain's population grew, access to land became more precarious and agriculture became more commercialized. As a result, these tensions in regional grain transactions would become exacerbated.
Over most of the eighteenth century the prevailing view on regulating regional grain exchange leaned toward free trade in years of abundance, and local restrictions on trade in times of shortage (Morin [38], 158). When access to food in producing districts was under threat, local magistrates could restrict or ban the removal of grain ('extracción' or 'saca de semilla' in Spanish) to keep the district's prices low. This policy was based on moral-economic principles of communal entitlements to the food produced in the community (Challú [ 8], ch. 4). On the other hand, areas that were of key importance to the colonial regime (such as the capital city and some mining centers) had special rights over the production of neighboring districts. Disputes over territorial jurisdictions were frequent and often involved securing the rights to the harvests. For instance, the mining city of Taxco succeeded in attaching the fertile region of Iguala to its jurisdiction in the eighteenth century.[ 6]
The power to regulate regional trade corresponded to various levels of government, including the viceroy, supreme tribunals, and local magistrates (Gerhard [24]; Serrano Ortega [59]). Most of the grain trade prohibitions were decreed by local magistrates: the alcaldes mayores and (after the administrative reforms of 1786) the subdelegados. The alcaldes mayores enjoyed ample power to regulate local trade. The most well-known case of the local authorities' involvement in trade is the repartimiento de mercancías, the monopoly over of the local trade of certain products (Hamnett [28]; Baskes [ 4]). Large merchant houses based in Mexico City paid a deposit as a collateral for the alcalde mayor's position. In exchange, the alcaldes mayores furthered the interests of their patrons by securing valuable products (such as cochineal) from indigenous communities in exchange for other products. The repartimiento was seldom used in cereal exchanges but it was nevertheless representative of the strong power that the local magistrates traditionally had over trade.[ 7] Such power was a matter of intense debate in the upper rungs of the colonial bureaucracy in the second half of the eighteenth century (Hamnett [28], chs. 3–5).
The viceroy and the audiencias (supreme tribunals) had governing authority over a larger territory and they occasionally used it to restrict trade outside their jurisdictions. In New Galicia, for instance, the Audiencia of Guadalajara prohibited the extraction of grain to other territories in 1771 and 1785 (Van Young [69], 92). These measures were exceptional. Their most common role in trade prohibitions was to be the authority to which affected parties could make an appeal against a district that prohibited the removal of grain. For instance, a miner, a hacendado with no grain production, or the city authorities could request a special pass or permit to acquire grain regardless of the ban. One audiencia fiscal (crown attorney) evaluated the request and issued an opinion, while the viceroy made a decision—generally in line with the fiscal's opinion.[ 8] The granting of the permit rarely overruled the decision of the local magistrate, but rather was simply an ad-hoc exemption to account for a special circumstance.
While food supply policy in the cities relied on the involvement of municipal institutions such as the alhóndiga and pósito, the policy at the regional level relied on the type of juridical mediation of competing interests that was one the cornerstones of Spanish imperial rule in the Americas (Grafe and Irigoin 2011; Tutino [68], 16–17). Scarcity and shortages generated conflicts over the trade of grain that crossed district boundaries. Local authorities issued bans on removing grain to protect the local population; outside claimants (miners, cities, and other consumers) sought exemptions by appealing to higher-level authorities. Authorities at all levels served as mediators that pondered the benefits and costs of the claims of private parties, and acted accordingly.

The Real Pragmática of 1765 in New Spain

High-ranking members of Charles III's administration introduced significant reforms in economic policies and the political administration of New Spain (Brading [ 6]; Pérez Herrero [43]; Pietschmann [46]). Trade between the metropolis and the colonies was gradually opened and in New Spain this resulted in the liberalization of intercontinental trade in 1789 (Stein and Stein [61], chs. 8–9; Baskes [ 5]). New traders and new power groups emerged that defied the traditional hegemony of the Consulado of Mexico City. In the domestic arena, reformists under the leadership of visitador and then Secretary of the Indies José de Gálvez challenged the privileges of local magistrates by attacking the repartimiento de mercancías. Such a stance was reinforced in 1786 in the Royal Ordinance of Intendancies, which forbade local authorities to participate in any commercial transaction in their jurisdictions (Hamnett [28]; Baskes [ 4]).
Despite such changes in the prevailing economic and political ideas, little is known about how Bourbon reformists viewed the regulation of the grain trade in the Americas. As with all laws of Castile, the Pragmática (and related dispositions) was applicable in New Spain, as long it was not contrary to specific laws of the Indies. Some Spanish towns appointed the síndico personero del común (the attorney who supervised food supply and the application of Real Pragmática at the local level) as early as in 1767.[ 9] By the 1780s, the síndicos personeros of Puebla and Mexico City were active in overseeing the granaries and other institutions of food supply.[10]
An 1806 document from the city of Campeche, Yucatán, gives us more insight into the role of the síndicos as defenders of the freedom of trade.[11] The document is a request by Nicolás Soriano, the procurador síndico general, that the viceroy abolish the city's twenty-year-old monopoly on the flour trade. The pósito of Campeche had contracted with a prominent merchant of Veracruz, don Pedro de Cos, to meet all of Campeche's need.[12] While the actions of the pósito of Campeche were under close scrutiny due to accusations of embezzlement,[13] Soriano's letter focused on the functions of the pósito and the accusation of monopoly. Soriano argued that the pósitos could only intervene to contain sudden price hikes when free trade proved insufficient. Soriano saw as his responsibility to defend both
the public interest because it is the principal obligation of my office; and the freedom of trade because [its defense] is attached to my position according to the resolution of the Council of 8 August 1766 to further the Pragmática of 14 July 1765 that establishes it.
The final decision about this case is unknown, but it is clear that for Soriano the Pragmática of 1765 was the valid legal framework under which grain markets operated.
A tacit goal in Soriano's presentation was to diversify the geographic sources of grain supply. Flour from Puebla (shipped through Veracruz) was indeed expensive and, by the early nineteenth century, merchants from New Orleans and Baltimore were a regular presence in the city of Mérida in northern Yucatan (Patch [42], 221–22). The application of the Real Pragmática gave a boost to this type of regional grain exchanges by curbing the power of local authorities to restrict the extraction of grain from their districts. The more consequential use of the Real Pragmática was, in fact, that it limited the right of local magistrates to prohibit the trade of grain from their districts to other areas. This application of the 1765 decree, however, did not take place at the level of the síndicos personeros, but in a handful of decisions of the royal audiencia, its fiscales, and the viceroys in the 1770s and 1780s. Altogether, this shift left a significant imprint on grain markets and altered the balance between central and local power for the next decades.
The first use of the Real Pragmática in a dispute pertaining to a regional grain trade was in a 1773 case presented by the labradores (farmers) of Iguala against a prohibition to remove grain from the jurisdiction of the mining town of Taxco. There was a long tradition of conflict between the two areas. Iguala emerged as an important agricultural district in the eighteenth century, but the area was later transferred to the control of Taxco. Disputes soon escalated between Taxco's authorities, who imposed restrictions to secure a cheap supply of corn, and agricultural producers that resisted them (Pérez Rosales [44], 185–204; Amith [ 1], 459–96). In 1773, the producers of Iguala sent a petition to the viceroy through Joaquín Antonio Guerrero y Tagle, an attorney from Mexico City with likely connections to the audiencia.[14] After denouncing the arbitrary decision-making of the alcalde mayor and his lack of respect for the viceroy's previous orders on the matter, Guerrero y Tagle finished with a final incrimination: 'the royal law of Castile orders with grave penalties not to stop the free use of victuals, but instead that they can be freely taken to any city, village or place in the kingdom unless there is a special royal interdiction.'[15] The fiscal of civil matters omitted this particular point in his opinion about the case. In a new presentation, Guerrero y Tagle now explicitly cited the Real Pragmática of 1765 and its provision that 'bread and victuals can be removed freely [...] from one place to any other within the kingdom,' and that the law applied to 'all the realms of the Crown and that no one should have the power to stop the removing without special license and royal mandate.'[16] He continued that no town could prohibit the removal of grain without the authorization of the king or his Council, and that leaving these decisions up to minor-rank officers was a mistake because 'they can be moved by ignorance or the particular interests of some vecinos [residents], who damage the rest.' Guerrero y Tagle concluded by suggesting that the alcaldes should not have such power. The fiscal eventually agreed with the attorney that no minor authority could make such a decision without the authorization of the superior government.[17]
In the next decade, the arrival of the newly appointed Fiscal de Real Hacienda (treasury fiscal), Ramón de Posadas, set a new tone for the discussion of the grain trade by using the Pragmática's principles of free trade, but also by maintaining limits to the individuals' pursuit of profit in times of necessity. The position had been recently established by the powerful secretary of the Indies, José de Gálvez, at the expense of the power of other members of the audiencia and the viceroy, creating frictions within the administration (Rodríguez García [54], 66). The new fiscal position and Posadas's appointment signaled that José de Gálvez was gaining terrain in the bureaucratic cadres of the colonial administration.
In the cases that Posadas reviewed in the first years of his tenure, the fiscal ratified the principle that local authorities should consult with the superior government before issuing trade prohibitions. The new paradigm was particularly clear in a case from Zacatlán de las Manzanas, Puebla, in 1781.[18] The alcalde mayor sought to obtain authorization for his trade prohibition and presented supporting statements from alcabala officers and the parish priest as evidence of his case.[19] This is the first time an authorization of this kind had been requested, suggesting that it followed the precedent of the Iguala vs. Taxco case. Posadas approved the prohibition and supported the principle espoused by the alcalde that residents should be given priority over outsiders in times of dearth. This held true even if 'the trade of subsistence goods, as any other, should be free.'[20] Beyond the specific outcome, by deciding on the case he sanctioned the prerogative of the higher authorities to determine the appropriateness of the prohibition. Another case heard the same year involved a prohibition to remove grain from the district of Huajuapan (Oaxaca). Posadas leaned again in favor of the prohibition, but he asked the alcalde mayor to submit additional information before he could make a recommendation on whether to uphold his decision.[21]
Posadas's most important case on matters of the grain trade was the dispute over the exportation of flour from Puebla to Havana, via Veracruz. Like the above cases it was also resolved in 1781. It was a complaint against customs officers in the port city of Veracruz who imposed restrictions on the export of flour from Puebla to Cuba.[22] Posadas strongly defended the right of the farmers of Puebla to export flour to Cuba. He argued that free trade provisions stimulated agriculture and that it was necessary to apply the legislation in the Americas 'to let success correspond to its beneficial designs.'[23] Posadas praised Charles III's decree for foreshadowing Turgot's edict of 1774 to liberalize the grain trade in France. In the Real Pragmática of 1765, Posadas continued:
our enlightened government resolved to abolish fixed prices of grain and to grant broad faculties to his subjects to [...] trade within the kingdom without any restriction; grain exports to foreigners were permitted depending on the grain price in the three markets that [the law] mentioned. With this providence the harvests increased, and grains started to circulate at good prices.
In his concluding remarks, Posadas opined that the king should order the alcaldes mayores to collaborate in increasing the trade to Cuba by compelling Indians to cultivate wheat in their lands, and by stimulating and aiding mule drivers to transport flour to Veracruz.[24]
Posadas's opinion in the case is important for two reasons. First, while Posadas thought that the free trade of grain was beneficial to agriculture and society in general, he believed that the authorities had to compel groups in the lower ranks of colonial society to join in this project. Posadas seems to assume that Indians did not share the economic rationality that would move them to freely participate in this trade. Posadas's conditional support for economic freedom is filtered through the lens of race and hierarchy, as it was common in Bourbon discourse of reforms (Salvatore [55], 27–29). Second, Posadas's opinion shows that he was aiming at a bigger goal than the grievance against the customs officers of Veracruz. The case could have been decided by simply citing the edicts of 1767 and 1776 that lowered taxes on the flour trade to Havana, and declared the absolute liberty of merchants to sell flour in Havana, respectively.[25] Instead, Posadas positioned the Real Pragmática as a foundation of authority in matters of grain trade, accumulating more power for his newly created office, which reviewed the authorizations. This came at a time when he faced the resistance of other members of the audiencia and the viceroy to José de Gálvez's policies (Real Díaz [50]).
The pragmatic and centralist dimension of these decisions from 1781 reverberated a few years later in the policies and debates in the so-called 'año del hambre' (the year of hunger) that started in October 1785. Famine was certainly not new in New Spain. In the eighteenth century, the famine of 1749–1750 was particularly damaging and remembered with angst decades later. Yet, in 1785 and 1786 in many locations, one of them Mexico City, prices reached historical highs. The spread of the harvest loss, the intensity of migration, and the mortality figures made this a dramatic moment in Mexican history that left an imprint for decades (Florescano [18]; Van Young [69], 94–102). The extent of our knowledge of the famine reflects the viceroy's zeal in collecting information on an unprecedented scale, which was followed by decisions that applied to every corner of the viceroyalty. In operating at a scale that encompassed all the affected areas (from Durango to Oaxaca), viceroy Bernardo de Gálvez (not to be confused with his uncle José, the Secretary of the Indies) broke with previous handling of famine crises, in which the viceroy focused on the capital and left local authorities to deal with other affected areas.[26]
Gálvez's Bando of 11 October 1785 was the centerpiece of the famine-time policies, and it applied to all corners of New Spain, not just to the environs of Mexico City (Florescano [18], 573–76). The Bando required all district magistrates to report grain stocks and expected consumption; any grain needed for consumption could not be sold outside the district, guaranteeing the right of the local population to subsistence. At the same time, the viceroy avoided passing limits on prices and imposing requisitions on stocks. The Bando's introduction criticized the greediness of landowners and merchants, but it only requested that magistrates prod them to participate in the market.
While not laissez-faire, Gálvez's approach was less interventionist than what his close advisors and high-ranking correspondents recommended or what local magistrates expected. Before the Bando, two fiscales and the bishop of Puebla recommended requisitions and fixed prices. Fiscal Posadas championed the cause of price controls as a guarantee for social peace. In a letter to the viceroy, he wrote that 'despite the Laws of the Indies and the Castiles, ordinances and privileges to the farmers, and other arguments' against price fixing, it was a 'fair, legal and convenient' solution given the exorbitant price of corn in some regions.[27] Posadas admitted the advantages of free trade, but it was a conditional support that privileged the authorities' fulfillment of traditional moral economic expectations. Gálvez acknowledged the virtues of the interventionist position,[28] but he set a course that was more aligned with the legal framework and that created incentives for farmers to participate in the market.[29] His further communications and directives gave a more precise meaning to the policies and kept different levels of authorities in check. In December, Gálvez clarified that the trade restrictions only applied to the grain that was strictly necessary for local consumption and that local officers should allow merchants and farmers to trade any surplus.[30] Through letters and missives he asked for information and aligned local magistrates with his policies. The Real Pragmática was only tangentially noted in the deliberations, but the policies espoused its logic of limiting the intervention of local magistrates, hence breaking with the decentralized handling of previous famine episodes.
Grain trade policies in the ensuing years continued the patterns established in the 1770s and 1780s. Cases heard in the Royal Audiencia of Mexico City made it clear that the local magistrates (now the subdelegados under the new intendencias regime) needed authorization to prohibit the removal of grain from their jurisdiction. In cases in which they acted without authorization, affected parties did not appeal to the viceroy for a pass or an exemption, but rather complained of arbitrariness and abuse.[31] Gálvez's famine-time provisions set the norm for future dealings with widespread dearth. Local magistrates requested that those provisions be applied at certain points, and when widespread famine returned in 1809, Viceroy Lizana repeated verbatim the dispositions of the 1785 Bando.[32]

The Significance of the Real Pragmática on Food Supply


In the last decades of the colonial period the inhabitants of New Spain experienced two generalized famines (in 1785–1786 and 1809–1810), a generalized food price rise, and traits of a sustained decline in nutrition and living standards (Challú [ 9]). In these conditions peasant communities sought to retain grain, while cities looked for supplies from more distant sources (Van Young [69], ch. 12). Tensions and conflicts over the grain trade mounted as a result of greater competition for limited resources. The Real Pragmática provided encumbered bureaucrats such as Posadas and Gálvez with a legal basis that they could use to increase their power vis-à-vis local magistrates. They wielded that power to negotiate these conflicts and facilitate the supply of sectors deemed critical to the viceroyalty. Did the policies of Bourbon reformers also effect changes in the way regional grain markets worked in this time period?
A conclusive evaluation of market performance exceeds the scope of this article, yet one metric that can be addressed here yields significant insights: the spread or dispersion of maize prices across four cities in different periods of famine before and after the application of the 1765 Pragmática provides a simple yardstick of market integration.[33] The coefficient of variation in a given year measures the spread by dividing the standard deviation of the prices by their average. In a famine we can expect that the protectionism of local magistrates would limit the exchange of corn or substitutes and would increase the price differences between markets. A higher coefficient of variation indicates higher price differentials and more market frictions; conversely, if the Pragmática smoothed regional trade, we would expect the coefficient of variation to decrease in times of famine.
The dispersion of prices in famine times was remarkably lower after the Pragmática of 1765. Table 1 averages the annual coefficients of variation by period of generalized famine. (For the sake of simplicity we refer to those periods by the peak year of the famine in Mexico City: 1750, 1785 and 1809.) In the famine of 1750 the coefficient was 43 percent, while in 1785 and 1809 it fell to a remarkably lower level: 27 percent.[34] Perhaps the centralized approach to the prohibitions, in which the viceroy requested each district to participate according to its surplus, was effective in maintaining a more fluid circulation of grain. In comparison to 1750 this centralized approach resulted in reduced barriers between regions and hence a lower degree of price dispersion. Narratives of the famines also highlight more regional complementarity in 1785 and 1809. In 1750, agents from Guanajuato went as far as Iguala to purchase grain that districts in the north-central and central highlands were retaining (Amith [ 1], 507). (Iguala is, in Map 1, the supplier farthest south from Mexico City.) By contrast, in 1785 and 1809 growers in the lowlands were given credit for a mid-season corn harvest, and the viceroy issued instructions that prompted local magistrates to release surpluses for trade. The famines of 1785 and 1809 were more intense and had a higher death toll than the one in 1750 (Reher [52]), but grain markets were more integrated than before.

The shift in grain trade policies coincided with a decline in average adult male heights, an indicator of nutritional wellbeing (Challú [ 9]). The average height of soldiers born from 1770 to 1810 was two centimeters shorter than of those born from 1740 to 1770. The decline in height was more pronounced, four centimeters, among those soldiers of rural origin, suggesting that the population in the cities was better equipped to cope with the prolonged subsistence crisis. More efficient regional grain markets were probably part of the picture. Heights and food prices followed a similar trajectory: in years or decades in which heights declined, prices tended to increase, even when taking into consideration variables that account for climatic variability (Challú [ 9]). Such correlation indicates that grain markets mattered in shaping the access to food of important sectors of the population. Despite the uncertainties of assessing causality from limited information, the Bourbon grain trade policies were, at the very least, not obstacles to the transfer of food resources from countryside to urban areas that underlay the substantial transformation in the nutritional wellbeing of the population. More likely, they supported this process by limiting the bargaining power of local authorities to retain grain in times of need.

Conclusions


Despite the lack of a historiography on the subject, the Real Pragmática of 1765 that decreed the free trade of grain was applied in New Spain and had economic and political significance, although certainly for different reasons than in Spain. The discussions around the use of the Real Pragmática show that the Bourbon reformers' policies on markets extended to the core of the domestic economy: grain markets. The Pragmática also sheds new light on the fact that grain market policies had a regional scope. By studying the application of the Pragmática, I diverge from interpretations primarily based on local institutions that have proposed that policies remained unchanged or that the late colonial period saw the deterioration of the commitment to city supply institutions (Espinosa Cortés and Andrade García [15]; Ouweneel [41], 120–21; Terán [64]).
The beginnings of the Real Pragmática in New Spain were modest, but its impact was far reaching. At first, the new síndicos procuradores were appointed in city councils. In the early 1770s, a lawsuit used the Pragmática as a fundament against the decision of the mining town of Taxco to restrict trade from Iguala. In the 1780s, Fiscal Posadas more consistently applied it to solidify the principle that the viceroy—and the fiscal of the Real Hacienda as his advisor—were the ultimate voice that authorized or repealed prohibitions. In the famine of 1785, Viceroy Gálvez claimed all authority to prohibit trade of corn bound outside a district. The policies set forth by Posadas and Gálvez endured through the first decade of the nineteenth century. In promoting the circulation of grain in the viceroyalty, Posadas and Gálvez acted as quintessential Bourbon reformers: expanding the capacities of central authorities and securing the control of the colonies, in this case by facilitating the transit of grain from producer areas to strategic areas.[35]
The Real Pragmática did not bring an age of laissez-faire in the realm of grain trade policy, but rather pragmatic policies that conditionally supported economic freedom and increased the power of the higher authorities. The cadre of officers that implemented the Pragmática of 1765 were the intellectual heirs of Campomanes. They believed in the primacy of free trade and self-interest (Salvatore [55], 29 and 37). Yet, Posadas's opinion in the case of the Cuban flour trade shows that the defense of economic freedom had its counterpart in the outright interventionism toward Indian peasants, who should be compelled to grow wheat—unable to see by themselves (we can deduce) the economic benefits of this crop. Similarly, Posadas was more concerned with investigating the reasons behind grain trade prohibitions and reasserting central oversight, rather than being dogmatically opposed to local restrictions. More broadly, Posadas and his colleagues believed in the convenience of free trade and individual entrepreneurship as long as self-interest served the interests of the empire or did not affect social peace. These were the parameters of the conditional support for economic freedom that inspired the decree of 1765. It was only in the 1810s when a new generation of officers, implementing the legislation of the Cádiz Cortes and drawing inspiration from economic liberalism, would make a push for strong deregulation and the total abolition of the power to restrict trade between districts. Even then, authorities would retain ways to facilitate the flow of grain to strategic points (Challú [10]). This course of action in New Spain parallels the application of grain trade reforms in France, in which free trade was constantly being negotiated, and pragmatism trumped dogmatism (Miller [36]).
The novelty and significance of the Real Pragmática was in its breaking a long tradition of autonomy of local magistrates. Their power over the grain trade was one of the assets that allowed local magistrates to serve as mediators in an empire built upon negotiation between different social actors (Tutino [68]; Grafe and Irigoin 2011). The Real Pragmática allowed Bourbon bureaucrats to move the stage of negotiation away from the local level and into the higher levels of the viceregal bureaucracy. The goal was to facilitate the transfer of resources that furthered the interests of the empire without destroying the process of juridical mediation.[36] This shift was consistent with a greater degree of market integration in times of dearth, and a reduction in the nutritional gap between cities and countryside. Through their decisions on regional trade in grain, top-level Bourbon officers went along with, and perhaps even contributed to the economic, political, and social transformations of the late colonial period.

Acknowledgements


I am thankful to Javier Cuenca-Esteban and other participants of the 15th World Economic History Congress for feedback on an earlier version of this paper, and to Eric Frith, Kris Lane, Amy Robinson and the two anonymous readers for their important input in this final version. This research was made possible thanks to the support of a National Endowments for the Humanities fellowship, and the Bowling Green State University Faculty Research Committee.

Appendix: Sources to Map 1

Map 1 is based on archival and published references to the geographic origin of shipments of maize to different cities, towns and mines in New Spain. The references range from anecdotal (a primary or secondary source reporting a frequent place of origin of sellers) to systematic (as in annual reports of sales). The goal is not to obtain a comprehensive list of market connections or a snapshot at a certain time; such a task is impossible given the enormous territory encompassed and the challenges of the sources. Instead, the map shows all geographic references over the course of the eighteenth century (and some observations in the late seventeenth century). Famines were excluded to avoid extraordinarily long connections (e.g. Guanajuato purchasing grain from Iguala).
  • Antequera (present-day Oaxaca). AGN [Archivo General de la Nación], Alcaldes Mayores, vol. 1, 80–81 and 88–91; Hamnett [29].
  • Bolaños. Menéndez Valdés [35], 112; Carbajal López [ 7].
  • Guadalajara. Archivo Histórico Municipal de Guadalajara, Alhóndiga (AHMG-A), box 53, folders 1/1750, 1/1807–1808; AHMG-A, box 54, folder 2/1759-2; AHMG-A, box 55, folders 2/1790–1791, 2/1791; AHMG-A, box 57, folders 2/1812 and AL2/1814; Van Young [69], 79–80.
  • Guanajuato. Morin [38], 141–43; Florescano and Gil Sánchez [20], 268.
  • León. AGN, Ayuntamientos, vol. 245, no. 72; Menéndez Valdés [35], 103.
  • Mexico City. AGN, Alhóndigas, vol. 1, exp. 5; AGN, General de parte, vol. 67, no. 301; AGN, Intendencias, vol. 59, exp. 1: Texcoco; Archivo Histórico del Distrito Federal, Serie Ayuntamiento (AHDF-A), Posito y Alhondiga, vol. 3695, no. 65; AHDF-A, Pósito y Alhóndiga, vol. 3696; Quiroz [49], 256.
  • Pachuca and Real del Monte. AGN, Alhóndigas, vol. 8, no. 11; AGN, Indiferente Virreinal, vol. 678, no. 4; AGN, Indiferente Virreinal, vol. 1762, no. 13; AGN, Indiferente Virreinal, vol. 3994, no. 24; AGN, Indiferente Virreinal, vol. 5974, no. 3.
  • Puebla. AGN, Intendencias, vol. 59, exp. 1; Archivo General Municipal de Puebla, Actas de cabildo, vol. 47, 151; Thomson [66], 177–98.
  • San Luis Potosí. AGN, Alcabalas, vol. 1377, 'Libros 1817'; Archivo Histórico del Estado de San Luis de Potosí, Ayuntamiento (AHESLP-A), vol. 1699–1745, no. 9; AHESLP-A, vol. 1746–1760, no. 7; AHESLP-A, vols. 1771 through 1777; AHESLP-A, vol. 1774, no. 5; AHESLP-A, vol. 1775; AHESLP, Intendencias, vol. 1813 ( 4), no. 5.
  • Taxco. AGN, Alhóndigas, vol. 1, exp. 5; AGN, General de parte, vol. 5, exp. 1094; Pérez Rosales [44], 185–222.
  • Valladolid (present-day Morelia). Archivo Histórico Municipal de Morelia, I.3.6.3, box 41, n. 11 and 20; Archivo Histórico Casa de Morelos, XVIII, Colecturía, Diezmos (Valladolid), vol. 1805, no. 56.
  • Veracruz. AGN, General de Parte, vol. 61, no. 39, 26–27; Lerdo [32], 138; Kourí [31], 64–65.
  • Zacatecas. AGN, Alhóndigas, vol. 1, exp. 11; AGN, Intendencias, vol. 59, no. 1; Archivo General de Indias, Indiferente General 1560; Bakewell [ 3], 64 and 237; Garner [23].
  • Zamora. AGN, Subdelegados, vol. 2, 357–61; Archivo Histórico Casa de Morelos, XVIII, Colecturía, Diezmos (Zamora), vol. 1690, no. 52.
1 Jonathan Amith, for instance, starts his discussion on grain trade in colonial Iguala by referring to the Pragmática in Spain, suggesting an influence on local policies in the Americas but not elaborating upon it (2005, 496–97).
2 Persson ([45], chs. 1 and 6) and Tilly ([67]) are good overviews of changes in food supply policies in Europe. For the case of Great Britain, see the classic work by E. P. Thompson ([65]); for France, see Miller 1998.
3 In the case of wheat markets, the mills acted as the major granaries and informal marketplaces in large urban centers (Suárez Argüello [63]; García Acosta [22]).
4 See AGN [Archivo General de la Nación], Indiferente Virreinal, vol. 3045, exp. 5, and vol. 4111, no. 13; and Patch 1993, 222.
5 Shipments in famine years were excluded to eliminate most exceptional cases. See the Appendix for sources and a brief explanation.
6 AGN, Alhóndigas, vol. 1, no. 5, 73–79.
7 There are a few references of repartimiento of grain products such as in Malacatepec (AGN, Tierras, vol. 2344, exp. 3, 20) in 1724, and Malinalco (AGN, Civil, vol. 175, exp. 4) in 1747.
8 The fiscales were both attorneys representing the interests of the Crown in the Real Audiencia, and top advisors of the viceroys. In most cases the viceroys followed the fiscales' advice without any rectification. On the role of the fiscales and the institutional setting of the colony, see Pietschmann [47].
9 Chihuahua was the earliest case; see AGN, Ayuntamientos, vol. 210, unnumbered. The earliest mention in Mexico City is from 1775; see AGN, Indiferente Virreinal, Box 3006, no. 14. Puebla created the position in 1776; see AGN, General de parte, vol. 56, no. 225.
In Puebla: AGN, Ayuntamientos, vol. 165, no. 6 (1797); AGMP, Expedientes, vol. 87 (1787); AGMP, Expedientes, vol. 112, 138–77 (1800); AGMP, Expedientes, 225, 28–52 (1803). In Mexico City: AGN, Alhóndiga, vol. 6, no. 1.
AGN, Industria y Comercio, vol. 19, n. 10, 218.
Campeche's exclusive contract with Cos resembles other similar initiatives of the pósitos of Córdoba and Mérida (Patch [42], 75–81), pointing to a distinctive interventionist tradition in matters of grain trade in the Yucatan peninsula.
The case spanned over several years and generated an impressive amount of documentation: AGN, Alhóndigas, vols. 3, 9 and 13. Besides the allegations of monopoly, there were accusations of embezzlement.
Joaquín Antonio Guerrero y Tagle appeared in multiple cases presented in the Real Audiencia. A Francisco Guerrero y Tagle was also Procurador de Indios in the Real Audiencia.
AGN, Alhóndigas, vol. 1, no. 5, 58.
AGN, Alhóndigas, vol. 1, no. 5, 64.
AGN, Alhóndigas, vol. 1, no. 5, 67.
AGN, Alcaldes Mayores, vol. 12, exp. 9, 304–9.
The model resembled the petitions of Indian tribute exemptions, which typically required supporting letters of the local priest and treasury officers.
The model resembled the petitions of Indian tribute exemptions, which typically required supporting letters of the local priest and treasury officers., 308–9. Posadas was not making an exception to the law; article 7 of the Real Pragmática secured the right of the local population to local production, but required explicit authorization to impose prohibitions (Vizcaíno Pérez [70], 115–20).
AGN, General de parte, vol. 62, exp. 44, 87.
An overview of the Caribbean flour trade, see Sennhauser [58].
BNFR [Biblioteca Nacional Fondo Reservado], Manuscritos, Ms. 438, 17.
BNFR [Biblioteca Nacional Fondo Reservado], Manuscritos, Ms. 438, 22.
BNFR [Biblioteca Nacional Fondo Reservado], Manuscritos, Ms. 438, 19.
The policies implemented in 1714 and previous years are summarized in a file compiled for Viceroy Gálvez, dated 31 October 1785, in BNFR, Ms 308, 60–61.
AGN, Intendencias, vol. 59, exp. 1, 53–55. See also Férnandez de Córdova's reflection on the issue of fixed prices two years after the famine (Florescano [18], 623–25).
For instance, in a letter to Puebla's Bishop Victoriano, Gálvez left the door open to instating fixed prices if the information pointed to that need; see AGN, Intendencias, vol. 59, exp. 1, 57–59.
The fiscal in criminal matters, acting as protector of the Indians, elaborated the arguments that became the basis of the bando; see BNFR, Manuscritos, Ms 308, 42–47. For a similar controversy on fixed prices during the famine of 1692, see Cope [13], ch. 7.
See the bando of 13 December 1785, written in response to the actions of some magistrates who restricted the removal of grain or even the transit of grain in their districts: BNFR, Manuscritos, Ms 308, 72-73. Gálvez highlighted its significance in a letter to the king (Florescano 1981, 643–44).
See the cases of Chiautla in 1800, in AGN, General de parte, vol. 76, exp. 304, 220v–221, and Tetela del Río in 1803 in AGN, Industria y Comercio, vol. 8, exp. 17, 293–96. For a more complete discussion on this point, see Challú 2007.
Lizana's Bando of 21 October 1809 in AGN, Alhóndigas, vol. 7, exp. 8, p. 231. The requests of information and communication (in the same volume of the cited source) closely resembled the pattern of 1785. See also the request of the subdelegado of Toluca to reinstate the Bando in 1819 in AGN, Intendencias, vol. 59, exp. 5, 3–7.
I thank Kevin O'Rourke for his suggestion to assess market integration by comparing famine-time benchmarks. This approach, in particular, is based on O'Gráda and Chevet ([39], 721–22). A more thorough evaluation of grain market integration that supports the conclusions here is in Challú 2007, ch. 3.
Adding the prices of two southern cities of Oaxaca and Puebla to the 1808–1810 period only raises the coefficient one point.
On food supply policy as integral to strategies of state survival, see Tilly 1975. On the Bourbon reforms as the strengthening of state capacities, see Salvatore [55].
Charles Tilly argued that, in Europe, grain trade reforms primarily facilitated the supply of sectors critical to the survival of the state (1975).

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