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  • Print publication year: 2005
  • Online publication date: March 2008

12 - Money, Taxes, and Finance

from Part III - Economic Organization and Sectoral Performance

Summary

The wars of independence in Spanish America marked not only the demise of the most ancient and far-flung European overseas empire but also the end to what was probably the largest monetary union then in existence. For three centuries the Spanish Crown had maintained a common silver and gold currency in the metropolis, in the vast territories of Spanish America, and in the Philippines. Moreover the silver peso (peso de plata) had become the most universally used coin in the world, circulating in China, South Asia, and Europe as well as throughout the Americas.

The end of the colonial regime also marked the end to what was the most extensive fiscal structure of the ancien régime in the Atlantic world. Adam Smith, in his classic work The Wealth of Nations (1776), emphasized the fact that the tax administration of the Spanish Crown in the Americas was a much more efficient extractive machine than that of Great Britain in its colonies. Nonetheless, the Spanish American empire eventually collapsed as a result of the succession of international conflicts that took place during the Age of Revolution, beginning with the wars of independence of the United States (1775–83) and concluding with those of the Latin American nations (1810–25).