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 Copyright 1979 by David Lorne McWatters Dedicated to my parents •^^^Mi.- ^>-<m~< ^.^•mt I 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 encourag- ing 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 his- torians. I owe a special thanks to Dr. Christen I. Archer, my M.A. super- visor 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 histo- rical 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 Univer- sity 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 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 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 mono- poly 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 * .x«t »«-««'«*.*„ 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 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 private shops, as many owners and workers were drawn into factory employ- ment. 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 establish- ment of the Mexico City factory. The study concludes with an assessment of vxx XWlliTBi t— I fi-: g^-HOK-'ak- t 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 , 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 establish- ment 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 eight- eenth 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 regu- lation of tobacco planting and the transfer of manufacture and sale of tobacco products from private to state ownership. Initially, the mono- 2 poly took control of only the growing and sale of leaf tobacco ( rama ) leaving manufacture and sale of tobacco products in private hands. Mon- opoly 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 modern- day state of Veracruz. Gradually, the Crown entered into competition 1 . with private tobacco shops (cigarrerias ) by producing cigars and cigar- ettes (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 vertically- integrated, since it controlled the tobacco industry in New Spain from planting through manufacture to retail sale in licensed shops. Also highly- centralized, 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 adminis- tered 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 adminis- trations ( 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.