This tightly focused, well-researched book analyzes credit mechanisms in Lower Peru for the colonial epoch, particularly for the last 70 years before independence. Before 1750, clerical institutions provided perpetual or redeemable loans (censos) at interest rates hovering between 3 and 5 percent; so, too, the Caja de Censos de Indios and the Inquisition, institutions with surplus capital, lent money in a society chronically short of specie. To help meet its obligations toward the end of the seventeenth century, the royal treasury (real hacienda) sold state bonds (juros) to wealthy Peruvians. By 1750, however, these credit mechanisms were clearly inadequate, as was made strongly manifest by the desperate shortage of funds for rebuilding Lima after the devastating earthquake of 1746.

After the quake, however, commercial and more modern state credit mechanisms took hold, alongside the more traditional sources of investment capital, to fuel the Peruvian economy a bit. The end of the galeones in 1739, their replacement by the registros sueltos, and merchants’ ability after 1750 to sell more goods in the interior all combined to stimulate new trading ventures, as did Peruvian merchants’ increased activity in risky contraband commerce.

The seizure of Jesuit estates in 1767, the consolidación de vales, and the abolition of the Inquisition at the very end of the colonial epoch all provided new funds to promote economic expansion; but severe pressures on the royal treasury forced viceregal officials to allocate most of these new resources to other purposes. Demand for more aid to the Spanish crown to help beat back the Portuguese and later the English in the Río de la Plata region and to put down indigenous rebellions in the highlands diverted state funds that might otherwise have supported economic development. Mining, agriculture, and trade in Lower Peru stagnated after 1800, partly because of the breakdown of the credit structure. War in Europe and fighting in America disrupted both overseas and internal trade; wealthy Peruvians emigrated, causing a flight of capital. These factors conspired to curb the post-1750 prosperity.

The great virtues of this book are its clear description of traditional credit mechanisms in Lower Peru up to 1750 and the transition to more modem secular, state, and commercial forms thereafter; and its discussion of how assets from seized or amortized clerical, Jesuit, and Inquisition property provided investment capital or treasury operating funds. Although Alfonso Quiroz, by his own admission, offers no systematic quantitative analysis over time of the various lending institutions he pinpoints (except in appendix 2, for the Caja de Censos de Indios between 1757 and 1781), he gives excellent quantitative examples of how the system worked, and presents useful tables and appendixes to implement his analysis. In sum, Quiroz has provided a broad new dimension to our understanding of the credit mechanisms and fiscal structures of Lower Peru in the colonial period, especially the last years of Spanish rule.