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...