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Gresham on horseback: the monetary roots of Spanish American political fragmentation in the nineteenth century1

Irigoin, Maria Alejandra (2009) Gresham on horseback: the monetary roots of Spanish American political fragmentation in the nineteenth century1. The Economic History Review, 62 (3). pp. 551-575. ISSN 0013-0117

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Abstract

This article deals with the political economic consequences of the disappearance of the Spanish silver peso standard in Spanish America, the longest monetary union that ever existed. With the Napoleonic invasion of Spain in 1808, the fiscal and political structure of the empire imploded and most colonies became independent. Regional competition for revenues exacerbated budget shortfalls driven by military expenditure. Local elites established in former colonial Treasury districts started highly diverse monetary experiments to procure funds. Those in control of mint houses started minting their own coins or debased existing silver currency. Elsewhere, inconvertible paper currency was also created to meet budget deficits. As a result, the most valuable feature of the Spanish American silver peso, its quality standard, was broken and the standard that had organized the early modern international economy for more than 300 years ceased to exist altogether. In Spanish America, as diverse monies co-existed within a formerly highly integrated economic space, a widespread Gresham's law effect exacerbated the conflict among local and regional elites. This fostered the political fragmentation of colonial Spanish America into an increasing number of political and monetary sovereign entities during the nineteenth century.

Item Type: Article
Official URL: http://www.blackwellpublishing.com/journal.asp?ref...
Additional Information: © 2009 John Wiley & Sons
Library of Congress subject classification: F History United States, Canada, Latin America > F1201 Latin America (General)
Sets: Departments > Economic History
Rights: http://www.lse.ac.uk/library/usingTheLibrary/academicSupport/OA/depositYourResearch.aspx
Date Deposited: 09 Feb 2011 17:24
URL: http://eprints.lse.ac.uk/32394/

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