INTRODUCTION
The Development of the Royal Treasury System (Real Hacienda) in Peru
The Spanish conquest and colonization of the New World was a massive undertaking, not only for the small bands of conquistadores who took the Indies for Spain but also for the bureaucrats who followed. For its part the crown's goals were to bring the indigenous peoples under royal control, maintain the loyalty of the conquerors and their progeny, and procure a share of the wealth being produced in the Indies. Using those institutions and officials which had consolidated royal power in Spain itself during the Reconquest, the crown sent a host of officials to the Indies to assert royal authority: viceroys, corregidores, captain generals, governors, judges for the audiencias, and many others.
Less well known but equally important for implanting and asserting royal power was the royal treasury system (real hacienda), a well defined fiscal structure designed to collect royal taxes, disburse funds for colonial needs, remit surplus revenues to Castile or other parts of the empire, and generally to oversee the financial interests of the crown in the Indies. Beginning virtually at the time of the conquest, royal treasuries (cajas) arose as Castile extended its domination into new areas in America--to major ports, productive mining centers, vitally important military outposts, administrative-market centers, and regions with dense Indian populations. These treasuries and the royal officials associated with them--accountants (contadores), treasurers (tesoreros), factors or business managers (factores), provisioners (proveedores), disbursers of funds (pagadores), and veedors (veedores)--were crucial links in Spanish colonial administration, controlling the fiscal administration of the regions in which they were established.
In the evolution of the Spanish royal treasury, the system established in the Indies was a major improvement on the metropolitan organization. From the beginning, royal officials collected a higher percentage of royal taxes, and treasuries functioned in a far more rational, unified way. In Spain itself there were several overlapping treasury jurisdictions and semi-autonomous bodies collecting taxes. Moreover, the crown disbursed funds at many levels and did not arrange expenditures as hierarchically as the more structured American system. Finally, unlike Spain itself with its numerous local laws and exceptions, royal cajas overseas functioned much the same way throughout the empire.
Royal cajas functioned much the same way throughout the empire. In the larger treasuries such as Lima and Cuzco the accountant or comptroller kept the books, entered all tax collections and disbursements in account ledgers, certified all transactions, and held one of the three keys to the strong box (caja) containing royal monies of the treasury district. A treasurer assumed responsibility for physically taking in tax monies and placing them in the royal treasure chests, disbursing funds to the individuals and institutions to which tax monies were allocated, safeguarding the treasury, and keeping one of the three keys to the caja. A factor served as fiscal agent or business manager for each treasury, carried on negotiations with other factors in other cajas in the Indies, and protected the arms, munitions, and supplies stored in the royal warehouses of the caja district. A fourth official, a veedor, supervised the weighing and smelting of gold and silver and oversaw all activities relating to mining and minting, although in the seventeenth and eighteenth centuries the veedor gave way to an assayer (ensayador) and bullion smelting expert (fundador). Major treasuries also had a host of lesser officials to serve with these treasury officials (oficiales reales) to post entries, issue supplies (proveedor), disburse funds (pagador), make duplicate accounts, work with the treasurer in collecting the taxes, and guard caja monies. Almost all treasury districts had lesser oficiales mayores to assist the principal treasury officials, although in small cajas a coterie of officials was unnecessary, and often the duties of accountant, treasurer, and factor were combined into one.
The conduct of royal treasury officials was rigidly prescribed. No monies could be placed in or removed from the royal treasure chests unless the holders of the three keys were present, usually the treasurer, accountant, and factor. The accountant had to keep two books, a libro manual or daily ledger of receipts and disbursements and a libro mayor listing different taxes by category or ramo such as tribute, mining taxes, and sales taxes. These accounts and the royal treasury were always subject to audit and inspection, either suddenly by a royal investigator (pesquisador) or on a regular basis by an official of the viceregal auditing bureau (Tribunal de Cuentas). Established in 1605 in Lima by Philip III to insure honest fiscal administration, the Tribunal also audited all the accounts for the cajas of Peru before sending them on to Spain for a final inspection by the royal auditing bureau, the Contaduría Mayor of the Council of the Indies. In addition, supervising auditors (contadores mayores) of the Tribunal made annual visits to royal treasury districts in their jurisdiction, audited the books when the account year ended, and had judicial authority to bring charges against those violating the mass of regulations for administration of the treasury and for keeping the accounts.
Royal law closely prescribed the day-to-day activities of treasury officials. Each Monday royal officials assisted in the weighing and assaying of bullion subject to royal taxes in all mining areas. On Tuesday and Friday mornings, either from eight to ten or nine to eleven in the morning, these same officials had to sell those commodities paid to the caja in kind and transform corn, cloth, chickens, and other products into effective currency. On Wednesday and Thursday they opened the caja for collection of taxes, and on Saturday they made disbursements (libranzas). Also on Saturday, even if there were no expenditures to make, royal officials opened the royal treasure chest for a weekly inspection. If Saturday were a festival day, then the caja was inspected on Wednesday and disbursements made that day. The caja was generally open for five hours a day, three in the morning and two in the afternoon.
In Peru as in other areas of the Indies, the first cajas appeared at the time of the conquest. Both Lima and Cuzco became royal treasuries in the 1530s and the focal points for the fiscal administration of central coastal and Andean Peru respectively. Not surprisingly these two treasuries remained the most important treasury districts throughout the colonial period. Discovered in 1563, the mercury mines at Huancavelica southeast of Lima became the site of a third treasury district in the 1570s, at the same time the patio process for amalgamation of silver was first introduced and the mines became a royal monopoly.
Establishment of new treasuries followed the course of both Spanish expansion and of mining strikes in Peru. In the southwest, Arequipa had treasury officials serving in the royal caja by 1599, but most likely the caja came into existence before that. In the north of Peru, Trujillo's accounts appear in 1601 followed in 1606 by those for the twin towns of Piura and Paita, insuring tighter royal control of the increasing coastal trade. Silver strikes prompted the setting up of other new cajas at the beginning of the seventeenth century. Halfway between Pisco and Huancavelica, the treasury of Castrovirreyna began functioning in 1600, while in the north, northeast of Cajamarca, the caja of Chachapoyas appeared in 1627. Three years later in 1630 the treasury of Cailloma started operation. Between Arequipa and Cuzco, Cailloma was the only one of the three mining treasuries to last. The caja of Castrovirreyna apparently functioned for only a bit over fifty years (1600-1652), and perhaps only sporadically. At Chachapoyas the mines were depleted even faster than in Castrovirreyna with the accounts for that treasury running only a bit more than twelve years (1627-1639). Two new mining cajas replaced them, however, but later in the century: these were the treasury of Vico y Pasco in 1670 in the Andes northeast of Lima and the treasury of Carabaya in 1690 in an isolated gold-producing area northeast of Lake Titicaca.
Early in the eighteenth century, perhaps in a Bourbon effort to bring the empire under tighter fiscal control, Philip V sent treasury officials into several new areas. On the coast between Trujillo and Paita, the port of Saña became a caja in 1701, the mining district of San Juan de Matucana east of Lima in 1721, and Jauja directly east of San Juan de Matucana in 1730. Probably the caja of Jauja replaced San Juan de Matucana when the silver lode there was exhausted and Indian unrest manifested itself in the Jauja-Tarma region. Later in the century in 1764 Huamanga in the mountains southeast became a sub-treasury of Huancavelica and, ultimately, the major treasury of the area in 1785. Thus, by the 1760s Peru had eleven cajas: Piura y Paita, Saña, and Trujillo, on the north coast; Lima, Jauja, Vico Y Pasco, Huancavelica, and Cuzco in central Peru; Arequipa and Cailloma in the south; and Carabaya in the extreme southeast.
Administrative reform increased sharply in Peru during the 1770s and 1780s and sharply affected the treasury system. The treasury of Saña closed in 1776 to become a part of the caja of Trujillo. Piura y Paita did the same three years later in 1779, leaving the treasury of Trujillo preeminent in the northern section of the viceroyalty. In the south the accountant at Cailloma sent in his last ledger in 1779, when that treasury was incorporated into the caja of Arequipa. Because of Indian revolts in southeastern Peru, the treasury of Carabaya closed temporarily from 1779-1783 but reopened once the rebellions ended and functioned until 1796.
Establishment of the intendancy system in 1784 further reorganized the treasury structure. The crown ultimately established eight intendancies in Peru--Arequipa, Cuzco, Huamanga, Huancavelica, Lima, Puno, Tarma, and Trujillo--but a caja was not necessarily located in the seat of each intendancy. The Intendancy of Tarma, for example, had its caja in Pasco, closer to mining operations, while Huamanga became the treasury district for Huancavelica in 1785. With the reoganization and consolidation which had occurred in the 1770s, Peru had seven cajas by the end of the colonial period. At one time or another since the founding of Lima, there had been sixteen treasuries, but at the opening of the nineteenth century, there were only seven: Arequipa, Cuzco, Huamanga, Lima, Puno, Trujillo, and Vico y Pasco. Unlike New Spain where the number of cajas grew consistently and then mushroomed at the end of the eighteenth century, the royal treasury system in Peru contracted, a manifestation, perhaps, of the decline in silver production and the break-off of Upper Peru and the Río de la Plata region into a separate viceroyalty in 1777.
Throughout the colonial period Lima was by far the most important treasury and was closely linked to the other cajas, not only in Peru but also in Upper Peru as well. In fact in the sixteenth, seventeenth, and early eighteenth centuries the treasuries of Arica, Carangas, Chucuito, La Paz, Oruro, and Potosí were all included in the Lima nexus and provided that treasury with considerable revenue. As a matrix treasury Lima garnered all surplus revenues from the other treasuries. In the City of Kings royal treasury officials and the viceregal bureaucracy used these monies for imperial purposes such as defense, support of mission work, construction of public buildings or churches, alms and charitable work, salaries of viceregal officials, and a host of other purposes. Royal treasury officials in Lima also sent military subsidies to Chile, Concepción, Valdivia, and Panama and surplus treasury income to Castile via Panama.
As the matrix treasury Lima remained the most important caja of the viceroyalty throughout the colonial period. Even when annual income into this treasury dropped below one million in the first half of the eighteenth century, it retained its preeminent position. At the same time the position or rank of the other cajas, based on the influx of royal revenues, changed a bit over time, but not significantly. At the end of the sixteenth century, for example, Lima ranked first, Cuzco second, Huancavelica third, Arequipa fourth, and Trujillo fifth. At the end of the seventeenth century Lima and Cuzco again ranked first and second, with the mining treasuries of Cailloma and Vico y Pasco third and fourth respectively; these were followed in turn by Trujillo, Huancavelica, Arequipa, Piura y Paita, Saña, and Carabaya. By 1750 Lima and Cuzco were still preeminent followed in descending order by the cajas of Trujillo, Huancavelica, Vico y Pasco, Arequipa, Piura y Paita, and Cailloma, although in fact these cajas clustered together in the amounts being collected for royal taxes. At the bottom in rank order were Jauja, Carabaya, and Sana. At the opening of the nineteenth century the City of Kings and Cuzco still dominated. Vico y Pasco was third, Trujillo fourth, Arequipa fifth, Puno sixth, and Huamanga was seventh.
Royal Accounts as an Historical Source
Royal accounts are a vitally important source for understanding the economy and society of the viceroyalty of Peru and for the determination of Spanish imperial policies during the colonial period. The account summaries (sumarios) in this volume were developed in the following manner by the accountants who served in the cajas of colonial Peru. As pointed out previously, the accountant generally kept two accounts, the libro manual and the libro mayor. The libro manual was the day book in which he recorded tax collections and disbursements on a daily basis, a day-by-day record for the royal caja. In the libro mayor the accountant kept his ledgers by sections or ramos. All tribute collected, for example, was posted in the libro mayor in the ramo of tributos, sales taxes in the ramo of alcabalas, import-export taxes in the ramo of almojarifazgos, etc. Expenditures were posted in the same way. Then, at the end of an account period--normally in the seventeenth century when the Pacific fleet (Armada del Sur) sailed from Callao to Panama--the accountant closed his books by adding the entries for each ramo together and placing these in a summary (sumario), also called a tanteo or relación jurada, usually at the end of the libro mayor. The summary listed all revenues and expenditures by ramo with a total for each one. The extant summaries of the accounts for the sixteen treasuries of Peru are contained in these volumes.
Entries on the cargo or income side of accounts reveal a great deal about activities in the caja district. For example, income items list taxes on gold and silver production (1.5% y quinto del oro, 1.5% y quinto de plata, 1.5% y diezmos de plata, etc.) and minting and assay taxes (senoreage and ensaye). Sales tax collections (alcabalas of all sorts) reflect commercial activity in the treasury district. Port taxes (almojarifazgos) in Lima (Callao), Piura Y Paita, Saña, and Trujillo provide an index to traffic and trade in these coastal harbors. Ecclesiastical officeholders paid salary taxes and subsidies to the crown including the media anata eclesiástica, mesada eclesiástica, and subsidio eclesiástico. The church bore other tax burdens as well by contributing portions of the income from major and minor ecclesiastical benefices (vacantes mayores and vacantes menores), income from the sale of the liquid wealth of a bishop who had departed his office (espoleos), and two-ninths of one-half of the tithe reserved as crown income (novenos). Toward the end of the eighteenth century bishoprics contributed fixed assessments to the crown for the support of the Real Orden de Carlos III, also called the pensión Carolina. Payment for the sale, renunciation, or rental of civil offices (oficios vendibles y renunciables) of royal treasury officials, members of the cabildo (regidores), public scribes, and other lesser bureaucrats was another source of income as was the tax of a half-years salary for the first year in office (media anata) levied on all royal officials.
