Economic Historians have back extrapolated from 19th and 20th century fiscal and financial woes of Spanish American to supposedly poorly developed colonial finance. A lack of secure property rights has been offered as the causal link between colonial rule and poorly developed financial intermediation. This paper proposes an alternative explanatory path using the subscriptions to one particularly large loan to the public purse in the 1770s. It illustrates the existence of a sui generis financial system that provided cheap and ubiquitous public and private credit. It analyses the links with private finance, the composition of the subscribers, and the role of the merchant corporation. The paper suggests that reading the evidence within a theoretical frame of financialisation is more helpful than the traditional institutionalist political economy analysis. While the concept of financialisation is at present poorly theorised, it offers a new understanding of the economic impact of easy credit in colonial Spanish America.
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