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Notaries and Credit Markets in Nineteenth-Century Mexico

  • Juliette Levy (a1)


Little is known about the logic of lending transactions and the development of credit markets in Mexico, or the rest of Latin America, prior to banks. We know even less about what role financial intermediaries played in these pre-banking markets, or who these intermediaries were. This article analyzes the intermediary role notaries played in the long-term credit market in Yucatan, in southeastern Mexico, in the nineteenth-century. Using a unique dataset of mortgages from the notarial records in the Yucatan state archive, the article shows that, in the absence of banks, notaries facilitated access to credit, and that, in the institutional and political context of Yucatan, both entrepreneurship and monopoly were being fostered.



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1 See Hoffman, Philip, Postel-Vinay, Gilles, and Rosenthal, Jean-Laurent, Priceless Markets: The Political Economy of Credit in Paris, 1660–1870 (Chicago, 2000) ; Hardwick, Julie, The Practice of Patriarchy: Gender and the Politics of Household Authority in Early Modern France (University Park, Penn., 1998). For colonial Peru, Kathryn Burns is one of the few scholars in Latin America who question and analyze the impartiality of notaries in the creation of the documents they left behind; See Colonial Habits: Convents and the Spiritual Economy of Cuzco, Peru (Durham, 1999) andNotaries, Truth and Consequences,” American Historical Review 110 (Apr. 2005): 350–79.

2 The dataset consists of all the mortgages recorded from the ledgers in the notarial archive in the Archivo General del Estado de Yucatan in 1850, 1860, 1870, and at five-year intervals until 1895. The dataset also includes all the mortgages recorded by one of Yucatan's most important notaries, José Anacleto Patrón Zavalegui, from 1875 through 1899. The surviving records of notaries operating outside of Mérida are scant, and the few that remain support the evidence that most of the financial transactions in Yucatan were processed and recorded in the capital, by Mérida notaries.

3 Even after banks opened in Yucatan, their lending terms were capped at six months. They could be indefinitely renewed but remained short-term loans. Yucatan borrowers could sometimes rely on foreign brokerage houses for longer-term loans, and by the mid-1880s two local trading houses dominated the henequen trade. Many producers could not rely on this source of credit alone, and so mortgages remained the last option for securing credit. The first mortgage bank didn't open until the late 1890s in the neighboring state of Campeche.

4 See Cotler, Pablo, Las entidades microfinancieras del Mexico urbano (Mexico City, 2003) ; Martínez, Horacio Esquivel, “Las microfinanzas como respuesta a la información asimétrica: El caso de la ciudad de México,” Comercio Exterior 56, no. 10 (Aug. 2006): 658–72;Pérez, María Antonieta Barrón, “Microfinanciamiento y reducción de la pobreza: Fondos Regionales Indígenas,” Problemas del Desarrollo 128, vol. 34, no. 34 (July–Sept. 2003): Revisat Latinoamericana de Economía, e-journal of the Universided Autonom de México Economics department,; Terberger, Eva, “Microfinance Institutions in the Development of Financial Markets,” CEPAL Review 81 (Dec. 2003): 187202; and outside of Latin America, Yunus, Mohamed, Banker to the Poor: Micro-lending and the Battle against World Poverty (New York, 2003).

5 Greif, Avner, “Reputation and Coalitions in Medieval Trade: Evidence on the Maghribi Traders,” Journal of Economic History 49 (Dec. 1989): 857–82; and Contract Enforceability and Economic Institutions in Early Trade: The Maghribi Trader's Coalition,” American Economic Review 83 (June 1993): 525–48;Lamoreaux, Naomi R., Insider Lending: Banks, Personal Connections, and Economic Development in Industrial New England (Cambridge, U.K., 1996) ; Hoffman, Postel-Vinay, and Rosenthal, Priceless Markets.

6 Schumpeter, Joseph A., The Theory of Economic Development: An Inquiry into Profits, Capital, Credit, Interest, and the Business Cycle (1912; English, ed. Cambridge, Mass., 1951).

7 I borrow and expand on the categories discussed by Baumol, William in “Entrepreneur-ship: Productive, Unproductive and Destructive,” Journal of Political Economy 98, no. 5 (1990): 893921.

8 Haber, Stephen, “The Political Economy of Latin American Industrialization,” in The Cambridge Economic History of Latin America, vol. 2, The Long Twentieth Century, ed. Bulmer-Thomas, Victor, Coatsworth, John, and Cortés-Conde, Roberto (Cambridge, U.K., 2006), 537–84.

9 Haber, Stephen, “Porqué importan las instituciones: La banca y el crecimiento económico en México,” El Trimestre Económico 73 (July–Sept. 2006): 429–78.

10 Olegario Molina is an example of the entrepreneur/rent-seeker the Porfirian model so privileged. He rose from the ranks of middle-class university-trained engineer to become a local politician, which garnered him contacts in the building of the Yucatan railroads, which in turn exposed him to the lucrative henequen trade. From then on he secured his place at the top of the henequen economy, managing one of the most successful trading houses and becoming governor of the state in 1902.

11 The figure of $900,000 (which was roughly equivalent at the time to US$700,000) understates the real value of the notarial credit contracts, because it does not account for the maturity of the loans, which on average lasted between two and ten years. The standard length of a bank loan in the 1890s was never above six months. In 1895, the Banco Mercantil de Yucatán held $409,762 as outstanding loans, and the Banco Yucateco had $181,565. This does not include the other loans such as trade credit and commercial paper, which the notaries did not deal with and of which the banks held approximately $2.5 million pesos in 1895.

12 This description of the educational prerequisites is taken from Bernardo Perez Fernandez del Castillo, Historia de la Escribanía en la Nueva España y del Notariado en México (Mexico City, 1988), which reproduces many of the codes, rules, and decrees pertaining to the notary's function in Mexico.

13 The law stipulated a limit on the number of notaries, which could not exceed the number of municipalities in the city, a category that varied during the period from eleven to thirteen municipalities. Twelve notaries recorded mortgage contracts in Mérida in 1850, and for the rest of the period, this number ranged from seven to twelve, accounting for vacant posts and inactive notaries. Although the Registro de Notarios registered all notaries when they began their careers, these records have not survived.

1410 de Julio 1907: Fallece el decano de los notarios de Mérida, don José Anacleto Patrón Zavalegui, que fue muy estimado por su honorabilidad y por su caracter jovial.” (July 10, 1907: Death of José Anacleto Patrón Zavalegui, doyen of the notaries of Mérida. He was much esteemed for his honesty and his jovial character.) In Menendez, Carlos R., Noventa Años de historia de Yucatán, 1821–1910 (Mérida, 1937).

15 The Civil Code required the registration of any contract that affected or might affect the ownership status of a piece of property. Art. 1979 and 1980 of 1870 Civil Code, Codigo de la Reforma, vol.2, 1870, in Nacionalización de Bienes Eclesiásticos, ed. Alatorre, Blas José Gutierrez Flores (Mexico City, 1870).

16 This is the largest single credit transaction in the sample. Wells, Allen, “All in the Family: Railroads and Henequen Monoculture in Porfirian Yucatan,” Hispanic American Historical Review 72, no. 2 (1992): 159209.

17 Ibid.

18 Francisco Cantón became Yucatan's governor between 1898 and 1902. As an aside, Cantón had been a supporter of Maximilian in the early 1860s. He later became a strong supporter and ally of Porfirio Díaz, which guaranteed him his post as governor for four years. But he lost Díaz's favor and “lost” the 1902 elections to Olegario Molina, who was by then the most important henequen trader in Yucatán.

19 Wells, “All in the Family.”

20 José Anacleto Patrón Zavalegui, libro 393, July 30, 1885, Fondo Notarios, Archivo General del Estado de Yucatan.

21 Notaries all worked in offices that were centrally located in Mérida. The 1896 city directory lists the names and addresses of some one thousand of Mérida's male citizens, including its notaries. It is not clear whether the directory lists the residential or business addresses, but all notaries in 1896 lived or worked within four blocks of the Gran Plaza in the center of town. José Anacleto Patrón Zavalegui's address on calle 67, #519 places him furthest from the Plaza and the seat of government along the western edge of the zócalo.

22 He had one child from his first marriage to Angela Cisneros, who had no discernible connections to Yucatan's elite families. The marriage ended when she died in the mid-1860s. He was soon remarried to Petrona Evia, a seamstress from a small town north of Mérida and the adopted child of one of his fellow Congress members and lay priest, Francisco Evia. From the parish records of the Archivo Parroquial de la Arquidiocesis de Yucatán, Mérida, Yucatan, and the Centro de Apoyo a la Investigacion Histórica de Yucatan, Mérida, Yucatan.

23 Even the most successful Parisian notary had but a small percentage of the market in Paris; see Hoffman, Postel-Vinay, and Rosenthal, Priceless Markets.

24 The details of the loans were as follows: September 9, 1890, $4,000 at 12 percent per year for four years, with a yearly repayment of $1,333 pesos worth of henequen starting in year two. The collateral was a paraje (plot) in Conkal, and the lender, Eusebio Escalante Bates, was the owner of a large trading house in Mérida. The contract included an obligation by the borrower to sell all the henequen grown on the collateralized plot to Escalante Bates at the price quoted at Escalante's trading house. If the borrower sold his henequen to anyone else, the contract would terminate and repayment of principal would be immediate. The 1895 loans: Ricardo Zapata to Bibiano Aguilar, January 3, 1895, $1,500 at 6 percent per year for five years, collateralized with a house of 4,608 square varas in Conkal; Juan Saenz to Bibiano Aguilar, March 12, 1895, $699 at 12 percent for two years, collateralized with a plot of land in Conkal, which was also already mortgaged for $200 pesos to Emilio Casares.

25 Se aumentaron los requisitos para la fe pública, pero se fomentó el monopolio en d icha actividad,…” Ley del Notariado, 29 Dec. 1915;

cited from Instituto Nacional de Estudios Historicos de la Revolución Mexicana,

Diccionario Historico y Bibliografico de la Revolucion Mexicana, vol. 7 (Mexico City, 1992).

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Notaries and Credit Markets in Nineteenth-Century Mexico

  • Juliette Levy (a1)


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