This article builds and expands upon results and methodology presented in Javier Cuenca Esteban, “The United States Balance of Payments with Spanish America and the Philippine Islands, 1790–1819: Estimates and Analysis of Principal Components,” in The North-American Role in the Spanish Imperial Economy, 1760–1819, Barbier, J. A. and Kuethe, A., eds. (Manchester, 1984), pp. 28–70 and 198–209. Unless otherwise mentioned in the notes, all estimates of U.S. balance-of-payments components with Spain, and the series of Philadelphia prices and import duties and customs revenue on trade with Spain, have been derived from the same sources and with similar methodology.Google ScholarIt is hoped that the present analysis will stimulate further research on the U.S. balance of payments and its impact on the domestic economy in this period. The author is currently gathering data for two projects on the British and French balances of payments with Spanish America in the same years.Google Scholar

¹ Recent re-assessments of North's well known thesis include Adams, Donald R. Jr, “American Neutrality and Prosperity, 1793–1808: A Reconsideration,” this Journal, 40 (12. 1980), 713–37,Google Scholar and Goldin, Claudia D. and Lewis, Frank D., “The Role of Exports in American Economic Growth during the Napoleonic Wars, 1793 to 1807,” Explorations in Economic History, 17 (1980), 6–25.CrossRefGoogle Scholar

² Pitkin, Timothy, A Statistical View of the Commerce of the United States of America…, 1st ed. (Hartford, 1816), p. 192.Google Scholar

³ See estimates in Table 3.Google Scholar

⁴ Estimates in Cuenca Esteban, “United States Balance of Payments,” Table 2.Google Scholar

⁵ To be sure, ships sailing south at times proceeded to the Far East by Cape Horn (evidence cited in Cuenca Esteban, “United States Balance of Payments,” p. 56); others often stopped, as will be noted, at several ports in the Spanish and foreign West Indies or headed east for European harbors. On the whole, however, evidence on hundreds of actual voyages in 1797–1804 points to predominantly “double risk” insurance, thus supporting the present balance-of-tonnage estimates as far as trade through U.S. ports is concerned: insurance policies and subscription accounts in American Philosophical Society, Stephen Girard Collection, Series 2, Reels 362–364.Google Scholar

⁶ The reader is warned that these two sub-balances had to be estimated, very roughly, from ratios of drawbacks (returned upon re-export) over gross customs revenue: see, for details, Cuenca Esteban, “United States Balance of Payments,” Appendix, Section F, note 99, and Table 1. The gaps between the two sub-balances seem wide enough to warrant the present analysis.Google Scholar

⁷ The terms of trade can be safely ignored at this stage because prices of domestic exports at Philadelphia seldom differ significantly from those of re-exports (see Ibid., Table 2, columns 9 and 10).

⁸ On the timing of Britain's takeover of Spanish American trade, see Esteban, Javier Cuenca, “Statistics of Spain's Colonial Trade, 1792–1820: Consular Duties, Cargo Inventories, and Balances of Trade,” Hispanic American Historical Review, 61 (08. 1981), 419 and Chart 3.CrossRefGoogle Scholar

⁹ Convoys of merchant ships of various nationalities, escorted by U.S. frigates, often stopped at Málaga or Alicante: see the relevant correspondence in Archivo Histórico Nacional (Madrid), Estado, leg. 5537, Exped. 23, nos. 18 and 21–23.Google Scholar

¹⁰ Ribas, Jose María Delgado, “El impacto de las crisis coloniales en la economía catalana (1787–1807),” in La economía espanola al final del Antiguo Régimen. III. Comercio y Colonias, ed. and introd. by Lázaro, Josep Fontana (Madrid, 1982), p. 165.Google Scholar

¹¹ Keene, Charles A., “American Shipping and Trade, 1798–1810: The Evidence from Leghorn,” this Journal, 38 (09. 1978), 692 and 685.Google Scholar

¹² Recent works on prices in colonial Spanish America represent a promising trend toward sophistication in this area, but the series made available so far seldom refer explicitly to imported goods: see Florescano, Enrique, Precios del mafz y crisis agrícolas en México, 1708–1810 (Mexico D.C., 1969);Google ScholarMelo, José Manuel Larrain, “Movimiento de precios en Santiago de Chile, 1749–1808. Una interpretación metodológica,” Jahrbuch fur Geschichte von Staat, Wirtschaft und Gesellschaft Lateinamerikas, 17 (1980), 199–259;Google Scholar and Tandeter, Enrique and Wachtel, Nathan, “Precios y producción agraria. Potosí y Charcas en el siglo XVIII,” Desarrollo Económico, 23, no. 90 (07–09. 1983), 197–232 (actual price series to be printed in a subsequent book not yet available to the author). See also the reference to Lyman Johnson's work in the following note. Attempts to locate evidence of current prices in the Archivo Nacional de Cuba did not turn useable series for the present purpose, but largely quotations of official prices showing little or no variation through time. Even if relevant price series for all major colonial cities could be retrieved, they would have to be combined into very rough indices for lack of sufficiently detailed breakdowns by destinations in the U.S. official trade statistics.CrossRefGoogle Scholar

¹³ The textile prices have been selected from a large sample of quotations for over 100 manufacturers, compiled from monthly reports widely scattered in Archivo General de Indias, Audiencia de Méjico, legs. 2922 (Veracruz: 1796–1798), 1448, 1455, 1457, 1462, 1467, 1468, 1469, 1470, 1471, 1473, 2515, and 1475 (México City: 1799–1810).Google Scholar The series entered into the textile index are among those that convey relative abundance or scarcity in years of large or small U.S. reexports to the Indies, respectively. Triple weight was assigned to the largest single import in value terms into Veracruz in documented years (platillas reales: import breakdowns by Spanish and foreign goods in de Tejada, Miguel Lerdo, Comercio exterior de México desde la conquista hasta hoy, Mexico City, 1853, nos. 19–23: 1806–1810). Other textiles known to have figured in U.S. shipments to the Indies were given double weights (“German linens” itemized in American Philosophical Society, Stephen Girard Collection, Series 2, Reel 46, frame 145, Iriarte y Lasa to Stephen Girard, Havana, 21 Feb. 1810).Google Scholar New Spain was seldom allowed to admit neutral ships, and its markets were unusually well protected against smugglers (see Whitaker, Arthur P., The United Stares and the Independence of Latin America, 1800–1830, Baltimore, 1941, p. 136);Google Scholar but large quantities of manufactures were re-exported from Havana to Veracruz in the neutrality years (see detailed returns of overseas trade in Archivo Nacional de Cuba, Real Consulado y Junta de Comercio, legs. 72 and 73: 1798 and 1803–1805;Google Scholar see also Ortiz, Javier de la Tabla, Comercio exterior de Veracruz 1778–1821. Crisis de dependencia, Seville, 1978, Chapter V). The staple prices at Buenos Aires are those recently compiled by Lyman L. Johnson from records of local religious institutions: taken with the author's permission from “Wages, Prices, and the Organization of Work in Late Colonial Buenos Aires,” Table 3 (unpublished draft delivered at the 44th International Congress of Americanists, Manchester, Sept. 1982). A one-year gap in the rice series was interpolated with parallel prices at Philadelphia, and the resulting index was used in turn to extrapolate three missing quotations in the wheat series. The staple index was weighted with the shares of each commodity in the total values of U.S. exports of rice and flour to the Indies. The aggregate index was weighted with the shares of U.S. re-exports (textile prices) and domestic exports (staple prices) to the Indies in each year's total.Google Scholar

¹⁴ Purchasing power was roughly estimated by simple aggregation at fixed rates of exchange of British, Spanish, and U.S. import values at constant prices from the Indies. British official data in Mitchell, B. R. and Deane, P., Abstract of British Historical Statistics (Cambridge, 1971), p. 311. Estimates from Spanish evidence, rates of exchange, and remarks on the weaknesses of the British official trade figures in Cuenca Esteban, “Statistics of Spain's Colonial Trade, 1792–1820,” Table III, Appendix III, and notes 99 and 37.Google Scholar

¹⁵ GNP data taken from Berry, Thomas Senior, Revised Annual Estimates of American Gross National Product. Preliminary Annual Estimates of Four Major Components of Demand 1789–1889 (Richmond, Bostwick Paper No. 3, 1978), Table 6B. Frequent shifts in supply and relatively stable incomes help account for the apparent absence of serious identification problems in these and in most subsequent regressions.Google Scholar

¹⁶ The five staples chosen for this purpose account, respectively, for 76.4 and 54.2 percent of the current value of U.S. domestic and total exports to Spain in the period 1790–1816. Price data for flour (often quoted as Filadelfia or harina superfina de América Septentrional), rice (Carolina), codfish (Terranova del grande or de primera suerte), and tobacco (Virginia) were compiled and processed in most cases from quarterly quotations in Correo Mercantil de Espana y sus Indias (Madrid, 1792–1808), passim (mostly at Cádiz and Málaga, occasionally at Alicante, Santander, and Barcelona: 1792–1804) and in Archivo General de Indias, Consulados, libros 1131, 1133 and 1134 (Cádiz: 1804–1821;Google Scholar annual averages of often weekly quotations for such a key commodity as flour seldom differ by more than 5 percent from those derived from the quarterly series). Wheat prices were taken from Critz, José Morilla, Introducción al esrudio de las flucruaciones de precios en Málaga (1787–1829) (Málaga, 1972), p. 237 (Málaga: 1790–1811). Missing data for wheat in 1812–1816 were extrapolated from prices of the same commodity at Cádiz (Sicilia duro superior in most instances), and those for the other four commodities in 1790–1791 from parallel series given in Morilla CritzGoogle Scholar (Ibid., pp. 237, 240) and in Hamilton, Earl J., War and Prices in Spain 1651–1800 (Cambridge, Massachusetts, 1947), p. 267: fish index. “On board” quotations were converted into “on land” prices by simple addition of I peso per unit (roughly estimated rates implicit in separate quotations given in Archivo General de Indias, Consulados, libro 1134, passim). The few prices quoted in reales de vellón (less frequently de plata [antigua] or de ardite) were converted into pesos de plato o de cambio de 128 quarros (relevant information and rates given inGoogle ScholarArróspide, Tomás Antonio de Marién y, Tratado general de monedas, pesas, medidas y cambios de todas las naciones, reducidas a las que se usan en Espana, 2 vols., Madrid, 1789, 1, 2–3).Google Scholar Conversions of weights and measures are based on the preceding source and on Almanak Mercantil o Guía de Comerciantes… (Madrid, 1795–1807), passim. The component series of the aggregate index were weighted by the quantities of the respective commodities exported from the United States to Spain in the period 1790–1816.Google Scholar

¹⁷ The regression coefficients for individual export goods other than tobacco are less reliable, but high demand elasticities for staples with close substitutes across the Atlantic are fully consistent with both standard theory and usual empirical results. Had it been possible to include Spanish prices of manufactures with available re-export volumes in the sample, the explanatory power of elastic demand regarding mounting total exports to Spain during warfare might have been strengthened even further.Google Scholar

¹⁸ See Esteban, Cuenca, “United States Balance of Payments,” Table 9, column 6.Google Scholar

¹⁹ Such is the impression conveyed by Delgado Ribas's findings in Catalan archives (see, again, “El impacto de las crisis coloniales,” 165). Significantly, perhaps, departures of U.S. ships from Leghorn for southern European ports were over twice as numerous in 1798–1808 as in 1815–1820: data in Keene, “American Shipping and Trade,” 693, Table 4.Google Scholar

²⁰ Breakdowns of cargo tonnage by U.S. and foreign ships in Cuenca Esteban, “United States Balance of Payments,” Table 7, columns 2 and 7. Similar estimates for trade with Spain point to the same conclusion.Google Scholar

²¹ Net carrying earnings are here defined as gross freight costs in U.S. ships minus net foreign- port charges. The latter item turned deficits against the United States in most years. See Ibid., Appendix, Section E, and Table 3.

²² Provisional analysis in Ibid., p. 66. It has since been ascertained that 75 of the 87 registrations of joint-stock insurance companies at the consulate of Cádiz in 1790–1819 expired prior to 1804; the capital subscribed by the 75 companies accounted for roughly 93 per cent of the total. Compiled and calculated from a complete registry of joint-stock companies in Archivo General de Indias, Consulados, leg. 78.

²³ One of many examples is given and documented in Cuenca Esteban, “United States Balance of Payments,” p. 67.Google Scholar

²⁴ The evidence for soaring freight rates on U.S. trade routes in 1808–1813 is thin, and North's estimates particularly weak for these years: see North, Douglass C., “The United States Balance of Payments, 1790–1860,” in Trends in the American Economy in the Nineteenth Century, Studies in Income and Wealth, National Bureau of Economic Research, vol. 24 (Princeton, 1960), p. 596. The present estimates are based on North's well known index times a documented rate adjusted for nautical mileage on all routes covered by the official breakdowns of commodity flows to and from the Indies and Spain.Google Scholar

²⁵ The five major staples are those entered in the Spanish price index (see supra, note 16). Profits are here defined as revenue at (Spanish) ports of arrival minus costs of home purchase and delivery. Revenue was reckoned as the sum of the products of the official quantities exported and their respective “on land” prices in Spain converted into dollars per unit (pesos de plata o de cambio × 15.059 [= reales de vellón]/20.5 = U.S. dollars: rates given in Marién y Arróspide, Tratado general, I, 2, and Tabla Primera, p. 4;Google Scholar same dollar rate also quoted as effective since 1789 in Almanak Mercantil, 1797, XXXIII). Costs include FOB current values at U.S. ports (export quantities times wholesale prices at Philadelphia), freight and insurance (see introductory remarks), and foreign-port charges derived from a comprehensive list of duties levied at Málaga on foreign ships of 250 tons (Estado printed in Almanak Mercantil, 1797, p. 365; alternative lists of duties charged at other Spanish ports in 1791, 1804, and 1819 are given in Archivo General de Indias, Consulados, leg. 1796, exped. 3, and leg. 1797, expeds. 4 and 22). The profit rates displayed in Figure 8 were reckoned as (revenue-total costs)/total costs. Since these results are subject to significant compound error, the estimates of mercantile profits given in Table 3 have been set instead at minimum conceivable rates with small allowances for favorable business conditions during wartime: cf. Cuenca Esteban, “United States Balance of Payments,” pp. 66–67.Google Scholar

²⁶ The annual averages used here to estimate profit rates obviously are poor indicators of the prices at which cargoes were actually sold. At Cádiz, prices of imported staples often fluctuated by over 20 percent from early January to late December; North American flour cheapened by more than half through 1805 and appreciated by almost as much through 1810: calculated from often weekly quotations for 1804–1821 in Archivo General de Indias, Consulados, libros 1131, 1133, and 1134. At Havana, where foreign commodities are known to have been frequently stored in expectation of improving business conditions, prices of imported goods at times fluctuated by 20 to 25 percent from morning to evening: American Philosophical Society, Stephen Girard Collection, Series 2, Reel 49, frame 484, Iriarte y Lasa to Stephen Girard, Havana, 12 Nov. 1811. Unfortunately, the apparent absence of monthly returns by destinations in the U.S. official trade statistics precludes sharper comparisons of total costs and revenue at those points of arrival for which detailed price quotations are available (Cádiz and Veracruz-Mexico City).Google Scholar

²⁷ Estimates and analysis of trends and cycles in Spanish colonial trade in Cuenca Esteban, “Statistics of Spain's Colonial Trade, 1792–1820,” Section IV.Google Scholar

²⁸ Analysis in Coatsworth, John H., “American Trade with European Colonies in the Carribbean and South America, 1790–1812,” The William and Mary Quarterly, 3rd series, 24 (1967), 259–61.CrossRefGoogle Scholar

²⁹ From the Indies came a fifth of all foreign coffee and well over twice as much of the sugar, molasses, and cocoa; to the Indies went more than a fourth of exported wines (1790–1799), a tenth of the flour, and half as much of the spirits (1790–1799), rice, and codfish. Spain supplied a third of all wines brought to the United States from abroad, and purchased more than a fifth of the country's exports of codfish and wheat, 12 percent of the flour, 9 percent of the rice, and 6 percent of the sugar (1790–1817). Unless otherwise noted, all export and import shares refer, respectively, to the periods 1790–1816 and 1790–1791, 1795–1819; the proportions in the neutrality years often were even greater. Quantity and volume data compiled, processed, and calculated from the contemporary sources cited in Cuenca Esteban, “United States Balance of Payments,” note 104.Google Scholar

³⁰ See Goldin and Lewis's analysis of the short-term impact, on national income, of improvements in net barter terms of trade in the 1790s: “The Role of Exports,” pp. 8–10.Google Scholar

³¹ This conjecture is based on analytical comparisons of the present estimates of balance of payments components with those of Douglass North for the United States with the rest of the world in the same period: see Table 3 and Cuenca Esteban, “United States Balance of Payments,” pp. 43–46. Unfortunately, North's estimates of freight earnings cannot be replicated for lack of breakdowns of registered tonnage prior to 1815 in the U.S. official sources.Google Scholar

³² See introductory remarks. Net customs revenue is here defined as gross proceeds from specific and ad-valorem duties minus very rough estimates of drawbacks returned upon re-export to the rest of the world.Google Scholar