The Pennsylvania State University
Cover for the book The Making of a Market

The Making of a Market

Credit, Henequen, and Notaries in Yucatán, 1850–1900 Juliette Levy
  • Copyright: 2012
  • Dimensions: 6 x 9
  • Page Count: 176 pages
  • Hardcover ISBN: 978-0-271-05213-7
  • Paperback ISBN: 978-0-271-05214-4

Hardcover Edition: $64.95Add to Cart

Paperback Edition: $32.95Add to Cart



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1

Introduction

In developed capital markets, financial intermediaries and banks have almost become synonymous. Today, people deposit their savings with banks, make use of their payment facilities, invest through their brokerage offices, get cash at electronic tellers, and apply for mortgages by filling out standardized forms. Banks are ubiquitous financial institutions today, but they are a relatively recent phenomenon. In Mexico, before the existence of banks in the late nineteenth century, nonbank financial intermediaries handled most of the financial tasks we associate with banks. For all we know about banks, we still know very little about how the intermediaries that predate them functioned and who precisely they were. For example, absent specific formation charters, how did they become intermediaries in the first place, and what circumstances—be they legal, political, economic, or simply accidental—put them in a position to provide financial intermediation and do so in such a way to influence and create markets?

These questions are all the more relevant in markets where economic growth happened without banks—which is Yucatán’s story and the topic of this book. Yucatán, like many regions in Latin America, experienced a protracted economic boom during the nineteenth century. Foreign demand for henequen, a local cordage fiber, stimulated the economy out if its postcolonial slump. Henequen had been used as naval cordage in the early nineteenth century and became the preferred binding twine in mechanical wheat binders in the United States and Canada in the late nineteenth century. Fueled by this demand for a primary good that was almost exclusive to the region, modern Yucatán transformed from a cattle-ranching and subsistence-farming society into a booming export-oriented agricultural economy.

In the context of Yucatán’s nineteenth-century agricultural boom, this book studies how credit markets worked before the emergence of modern banks. The boom occurred without the assistance of modern financial institutions; instead, mortgage loans arranged through local notaries raised the capital that land owners and merchants invested in crops and infrastructure. The importance of these informal or personal credit markets in supporting productive activities that generated growth and development is not surprising for early modern societies in which tradespeople, personal loans, and religious institutions advanced loans. The novelty of the Yucatán case is that personal credit networks continued to be important in the nineteenth century and were very quickly mobilized through the person of the notary to finance one of the major commodity booms in Latin American history.

This finding challenges the notion that large-scale investment capital could be mobilized only through formal financial institutions or through specialized enterprises directly engaged in the henequen trade. Yucatán changed from a regional backwater into a participant in the global cordage market, and it did so without any local banks. While foreign brokers extended trade loans to the most important producers and traders of henequen, all other participants in the local economy carried Yucatán from its colonial past into modernity by relying on traditional forms of personal finance.

Even though personal credit was probably the major source of credit in most countries before the twentieth century, we know little about how these personal mortgage markets worked in Latin America. Historical research on credit markets has focused on banks, and economic historians have privileged these institutional histories and assumed that informal markets did not support a large enough part of the market. The case of Yucatán analyzed here overturns this assumption.

This book provides an analysis of how intermediaries mobilized personal credit markets through the office of notaries, many of which became unwitting catalysts of Yucatán’s capitalist transformation. It provides a crucial addition to the historiography of formal institutional finance, showing that interpersonal credit markets operated before the creation of banks and that notaries were crucial financial intermediaries. In Yucatán’s personal, informal, and small credit market, notaries embodied trust, monitored reputations, managed networks, and provided social enforcement to support the flow of credit. This example of economic growth supported by financial alternatives demonstrates that additional and important sources of credit can exist before and, perhaps most importantly, without banks.

Economic Growth

Latin America’s development lag compared to the United States or Europe has occupied historians for quite some time, and the explanations draw a picture of a development process marred by the colonial experience. Historians and economists have traced economic, ethnic, and political inequality back to patterns established and reinforced by the colonial system. However, it is difficult to connect modern transformations, or the lack thereof, to the colonial period alone, and the colonial legacy certainly cannot explain the different patterns of financial development among Latin American countries after independence from Spain and Portugal.

Independence did unshackle Mexico from the straightjacket of colonial commercial restraints. The progressive purpose of many of its postindependence presidents was to catch up with Europe and leave the colonial legacy behind. Both conservatives and liberals were dedicated to reinvigorating Mexico’s economic position and reclaiming a place in the global trade network, which Mexico had lost when it separated from Spain. The political instability and conflict between political factions probably delayed this economic revival in the nineteenth century, but Mexico, like many other Latin American countries, benefited from a primary goods export boom fueled by the industrialization of the other parts of the world. In this context of national rebuilding and economic revival, the development of financial markets and institutions would become critical.

Financial development and economic growth are irrevocably connected (financial innovation and economic innovation both contribute to growth), and this suggests that the growth booms in Latin America should have given birth to a series of financial institutions geared toward supporting the allocation of savings and investments that traditionally fund credit. This did in fact happen, as state-chartered banks opened throughout the Americas in the nineteenth century, starting with the Banco Comercial de Río de Janeiro and the Banco do Brasil in 1851. The two merged in 1853 to form the first and largest institution of commercial credit in Latin America. Also in this period the Argentinian government established the charter of operations for its Banco de la Provincia de Buenos Aires, the first locally funded and managed bank, which became the first bank to issue long-term residential loans in 1856.

In Mexico the first Mexican private banks were formed even later, during Emperor Maximilian’s reign (1864–67), but these banks functioned more as royal treasuries than as modern banks. Prior to these, the Banco de Avío was created by the government in 1830 to support infant industry, but it closed some fifteen years later. Other preexisting banks were foreign owned and operated and functioned as investment banks or trade credit providers (as was the case of the English Banco de Londres, México, y Sudamérica). It was not until President Porfirio Díaz’s long term in office that private banks became an important part of the Mexican financial system. The Banco de Santa Eulalia, chartered in 1875, was the first; the Banco Nacional de México, chartered in 1882, was the most important. In late nineteenth-century Mexico, the Banco de México had almost exclusive note-issuance privileges, managed the government’s budget, and was in charge of servicing the government’s domestic and foreign debt; some have argued that it acted like Mexico’s de facto banker of last resort. Regional banks also expanded during this period, and Yucatán’s henequen traders followed suit and opened two banks in 1889.

Yucatán’s growth predates the birth of local banks in 1889, and henequen had been harvested and processed on local plantations in increasing amounts since the middle of the century. Given that banks did not finance that expansion, that foreign brokers mostly financed trade, and that henequen plants had a seven-year seed-to-plant maturation time, how did the Yucatecan economy finance its long-term investments?

To answer this question we need to think of the financial role of institutions and actors that are not banks. Banks are only the most recent embodiment of financial institutions, and the focus on banks as vehicles of economic growth obscures the fact that debt was ubiquitous well before the creation of banks. From the commitment letters of eleventh-century Maghribi traders to trading debts of Spanish merchants in New Spain and the mundane debts of eighteenth- and nineteenth-century English parishioners, there is reliable and plentiful evidence of active credit markets throughout the world that existed without banks. This was doubly true in nineteenth-century Yucatán, where the demand for henequen and the lack of banks promoted the growth of a market for personal loans. The notarial ledgers maintained in the Yucatán archives confirm that credit markets do not require banks to exist. They also reveal that notaries, not banks, were the financial intermediaries that responded to the demands of local economic growth. What the market needed wasn’t necessarily banks, but the existence of financial intermediaries that could perform the functions that banks eventually internalized.

The literature on Yucatán has focused justifiably on the role of trading houses and import-export houses such as Escalante y Compañía and Molina y Compañía. These institutions preceded banks and were created to support those involved in the henequen trade, to whom they advanced large sums of capital each planting season and on behalf of whom they negotiated with foreign purchasers over the price of henequen in return for product. The trading houses were crucial in the global reach of henequen, and they structured the market in ways very advantageous to them—thereby guaranteeing a majority share in both the business sphere and the politics of Yucatán. As financial intermediaries, however, the trading houses were relative latecomers and imperfect coordinators. Trading houses lent exclusively to planters that could repay them in fiber, which excluded smaller planters and anyone not borrowing for a henequen plantation.

The financial intermediaries that supported the early growth of the henequen boom as well as the expansion of the credit market beyond the strict limits of the henequen producers were the notaries, who sit at the heart of this book and at the intersection of market norms and social norms. They facilitated contact between borrowers and lenders without doing any lending themselves, and in doing so, their intermediary role was closely tied to their social role. The role of notaries is often overlooked in this context, and they deserve to be analyzed in depth to reinterpret and recast their place in society and history as well as in the functioning of an economy.

This book steps away from the traditional emphasis on banks in financial studies and reconceptualizes the financial market through the role of intermediaries. In shifting the perspective from formal financial institutions to notaries, the book joins a body of research on informal relations in markets—part of a growing scholarship that studies informal mechanisms of credit distribution and demonstrates the importance of such mechanisms in developing economies.

Financial Intermediation

The roles performed by notaries in financial markets position the notaries firmly as a link between the economy inherited from the Spaniards and Mexico’s modern financial system. As embodiments of the civic trust, notaries recorded the transactions that trace Mexico’s capitalist transformation from Spanish colony to independent republic. The trust embodied in the notarial institution and the informal nature of the networks in which notaries worked underscores the importance of informal institutions and traditional mechanisms of trust in the transition to modernity.

Time-honored figures in the Spanish and French legal tradition of recording civil transactions, notaries were the main contact between civil society and the body of laws imposed by successive governments in colonial and independent Mexico. Notaries were a source of stability throughout the changes in governance and laws. They continued their record-keeping tasks no matter what the political, economic, or diplomatic circumstance, as their core activities were relatively impervious to wars and revolutions. As a historical documentary source, notaries provide a privileged perspective into the reverberations of social, political, and economic upheavals.

The constancy of notarial activity is particularly useful when studying economic markets during the tumultuous nineteenth century. Mexico was wracked with political infighting, as the conflict between the centralist liberals and the federalist conservatives erupted in civil wars. The first half of the century was a period during which Mexico faced secession both in the north and in the south. Texas seceded successfully in 1836 and Yucatán tried but failed in 1844. Invasions, both by the United States as well as European powers, followed.

It was a period of economic distress (especially in the immediate aftermath of independence) and economic rebound. It was also a period of legal reform and political exploration. Mexico started the nineteenth century as a colony, was twice an empire and, depending on how they are counted, supported about seventy-five separate presidencies. In the midst of this chaos, notaries recorded contracts and continued to perform their civic duties, continued to be not just the pillar of civil contracting but a bulwark against the changing political and economic landscape.

The Mexican independence wars were a significant shock to the Mexican economy, most obviously on the rates of economic growth and the level of exports and trade with Mexico’s traditional European trade partners. The recovery from these losses and the imposition of calm under Porfirio Díaz are part of the great successes and contradictions of this period in Mexico’s history. And below the surface of the political conflicts and rearrangements, informal institutions and intermediaries weathered the shocks and continued operating. In Mexico City, for example, pawnshops, one of the oldest operating short-term credit providers, did not stop during the independence wars or the revolution in the early twentieth century. This was also the case for the mortgage market in Yucatán during the period covered in this book. Notaries oversaw the private credit market and recorded private mortgages with interest rates that reflected changes in laws and perceived risks in the markets, operating for all intents and purposes like financial brokers. Mortgage banks, on the other hand, had to wait until the last decade of the nineteenth century to get a charter and begin operating in the Yucatán Peninsula.

Contrary to notaries, banks first started operating in Mérida, the capital of Yucatán, in the late nineteenth century, and for the better part of the henequen boom, credit was privately allocated through long-term collateralized credit in the form of mortgage loans. Save for foreign-trade credit (reserved for large traders during the boom) and pawnshop credit (in smaller amounts but among a larger proportion of the population), such loans could be legal and enforceable only if they were recorded in a notary’s office and carried the notarial seal. Even after banks opened in Yucatán, their lending terms were limited, and while foreign brokerage houses provided longer-term loans for henequen production and export, these loans were limited to all but the biggest producers. The last and often only option for secured credit during the nineteenth century was the mortgage loan or contract (I often refer to them as “mortgages” throughout the book).

In this setting where land was wealth and banks did not exist, mortgage credit became the single and most widely used mechanism to raise long-term debt. This does not discount the role of alternative credit sources, but it does emphasize the widespread use and deep reliance on long-term mortgage credit. In Yucatán, mortgages financed mostly agricultural ventures, and there is evidence that the use of mortgages to finance productive activity was not limited to Yucatán. The textile industry in the state of Veracruz also used mortgage credit to finance itself in the nineteenth century. And beyond Mexico, mortgages also fueled the French financial and industrial markets in the eighteenth and nineteenth centuries.

Nineteenth-Century Economic History

The importance of mortgages and nontraditional financial intermediaries has received relatively little attention because, traditionally, financial institutions and development in Latin America has been analyzed in comparison to the economic histories of Europe and the United States. Modern institutional deposit and investment banks are a feature of European and U.S. economic history, and the delay in development in other parts of the world has been analyzed through the prism of the standards that have come before them. This perspective has skewed our view of markets in the developing world, leading many to ask why banks in Mexico, Morocco, or Malaysia, for example, did not arise at the same time, play the same role, or provide the same impetus to growth as they did in Western Europe and the United States.

Today, many scholars of Latin American financial development are reversing this trend and studying local development without relying on these traditional comparisons. Gail Triner advances our understanding of banks and the intricacy of their corporate governance in Brazil, and Aldo Musacchio overturns many assumptions about the effect of the colonial legacy on Brazilian economic development, much as Leonor Ludlow, Carlos Marichal, Steve Haber, Gustavo del Ángel-Mobarak, and Noel Maurer have done for Mexico. Steve Haber’s more recent analysis of the commitments that tie governments to bank stakeholders and compel them to honor their mutual obligations complicates our understanding of the logic of Latin American financial markets. These are all groundbreaking works, especially in their break with the theoretical and empirical legacy of the dependency school. Together, these recent studies chart a new course for Latin American economic history of credit, but they still maintain a perspective that defines it as the history of banks and public finance.

That said, the literature on banking and finance in Latin America also agrees that local and informal credit relations were necessary for the creation and development of a national banking network. Anne Hanley has demonstrated that local networks were at the origin of the sophisticated financial institutions that marked Brazil’s late nineteenth-century economy and that the demands of the coffee trade combined with the end of slavery were not alone in supporting the Brazilian financial markets; coffee traders (or coffee factors, as they are known) and local debt markets supported the existence of these markets before they became national, formal, and modern.

Historians studying the colonial period, by default, focus on nonbank intermediaries. They study the importance of traders and the church in the development of colonial markets and provide insight into the functioning of premodern credit markets. With his sweeping analysis of the Guadalajara region in the eighteenth century, Eric Van Young demonstrates that regional studies can have an explanatory impact for the rest of the area. His research determines that urban trade and agricultural production in the colonial period depended on each other not just for commodity production and sale but also for the longer-term financial needs of both. Van Young’s and Linda Greenow’s detailed study of credit in colonial Mexico describe the overlap and dependence between producers, traders, and financers, and although neither articulates the role of intermediaries, they introduce a clear picture of socially embedded commercial interactions and a fledgling, if unidentified, role for informal intermediaries.

Financial and economic studies of the immediate postindependence period are few, most likely because, except for Brazil, most Latin American economies were mostly in disarray. At the national level, Barbara Tenenbaum studies the pitiful state of public finance during the revolving governments of the early independent period and shows that chaos was the one constant in this period. Margaret Chowning’s work on Michoacán demonstrates that not all regions in Mexico experienced the conflicts and resolutions that marked the national scene in the same way. Independence freed Mexico from the weight of the colonial regime but did not replace it with anything firm or reliable.

The resulting power vacuum had two sets of consequences. First, Mexico’s governments were led by a revolving door of presidents, dictators, and one foreign emperor, while the colonial structure was replaced with a semifunctional independent alternative. Second, in the absence of trustworthy public institutions, personal wealth and power became achievable and noticeable goals. The historical record of the nineteenth century is long on chaos and large family fortunes, and the survival of these regional family fortunes is a pillar of nineteenth-century studies. David Walker’s and Alex Saragoza’s studies of kinship and wealth in the nineteenth century hint at the role of informal relations in markets and argue in favor of the family and kinship networks as agents of these markets.

Families and the reliance on kinship networks in Latin America have often been used to explain its economic development lag—especially in the case of Yucatán, where the mythical power of the “Casta Divina” overshadows many of the studies of the henequen boom. The Casta Divina is the term used to refer to a group of wealthy families who owned a significant share of the land and wielded considerable political power in nineteenth-century Yucatán. The Molina clan, the Peón family, the Cámaras, and the Escalantes dominated politics and trade, and their existence has served to reinforce the fact that in Yucatán, as in the rest of Mexico, family networks, interlocking business directorates, and other forms of insider lending were a response to a lack of trust in and the pervasive weakness of the legal and governmental institutions. The argument that kinship networks and preexisting institutions were at the root of the inefficiencies in the economic system of Mexico has great explanatory thrust, but the existence of overlapping family connections in business cannot prove that it was the driving force. The evidence from the mortgage market in Yucatán suggest that kin was not necessarily king. This point has been made by economic sociologists who recognize and demonstrate that intangible elements such as trust can hold more value than any material or familial bond—and that the less obvious ties (the ones Mark Granovetter calls “weak”) may be the ones holding the network together.

Apart from kinship and delayed financial development, property rights also address the delay in the development of financial markets in Latin America, especially in the context of poverty and political instability. Douglass North best articulates the effect that legal constraints could have on economic activity in the United States and Europe, but no one has illustrated it more convincingly for Latin America than Hernando de Soto. De Soto recognizes the static property rights of land ownership in Peru as an obstacle to the development of credit markets and a cause of poverty in the countryside. In the Peruvian twentieth-century context, de Soto identifies this as a leading cause of terrorism and instability. Like de Soto, historians of the Mexican Revolution made the connection between the massive land privatizations of the nineteenth century and the revolution, but de Soto’s work provides a theoretical and empirical context in which to conceptualize the problem. The exclusion of different constituencies from credit markets, and markets in general, can benefit greatly from being understood as a consequence of property rights regimes. Bringing this back to Yucatán, the absence of ethnic Mayas from the mortgage market and the conditions under which women participated is best understood as a reflection of market responses to their truncated property rights, rather than as a response to ethnic bias or sexism.

Notarial Sources

Because of notaries’ integral role in the judicial system (contrary to lawyers, who had no obligation to record their transactions), notaries recorded all civil agreements and contracts, as well as the detailed notes of those agreements between their clients. As a consequence, notarial records are a staple of historical research, and many historians have used the mundane details of personal life that notaries recorded. The term “notary” in fact springs etymologically from this very act of “taking note,” an act performed diligently throughout the ages. The tasks they performed per their mandated functions and the records that notaries left behind are the material with which one can thoroughly document the history of the mundane acts that constitute a society’s interactions.

The collaborative work of Philip Hoffman, Gilles Postel-Vinay, and Jean-Laurent Rosenthal, as well as research by Julie Hardwick and Donna Merwick, all rely on notaries’ copious notes to study their subjects and the world in which they operate. These scholars have reclaimed the role of the notary by recasting him respectively as the servant of financial innovation, the embodiment of middling patriarchs, and one of the casualties of the British conquest of New York. Jointly, they rewrite history from the perspective of a humble civil servant. In the Netherlands, notaries are also the subject of renewed interest because the financial accounts they recorded and managed are an important gateway to understanding the local effects of the economic growth in the Low Lands during the heyday of exploration and foreign trade (through the Dutch East India Company, for example). Among the Latin Americanists, Kathryn Burns, Catherine LeGrand, and Adriana Mercedes Corso have seen notaries as influential participants in the mundane worlds of colonial Peru and nineteenth-century Colombia. In all their works, as well as in this book, notaries are not just the providers of documentary sources; they are the main subjects of research.

The records used here were collected in the State Archive of Yucatán (Archivo General del Estado de Yucatán; AGEY) and its Notarial Archive (Archivo Notarial del Estado de Yucatán; ANEY). The data set comprises all the mortgage contracts that were recorded in the surviving ledgers between 1850 and 1900. I use every mortgage that was recorded in the ledgers from 1850, 1860, 1870, 1875, 1880, 1885, 1890, and 1895. Because sampling throughout the years would have complicated the assessment of the secular growth of the mortgage market, every mortgage contract recorded in every surviving notarial ledger in the Notarial Archive and the State Archive of Yucatán in the eight benchmark years are part of the data set. The data consists of approximately 1,000 contracts and also includes a subset of mortgages that were recorded by one of Mérida’s most important notaries, José Anacleto Patrón Zavalegui. His data set of 448 mortgages includes every mortgage contract he recorded between 1875 and 1899.

Another part of the data set consists of the debts that were recorded in more than 300 probate records. This part of the data set consists of 337 estate inventories from 1847 to 1901 and includes 128 probates from Maya decedents. These postmortem accounts are reliable documents for wealth estimates, as long as one acknowledges the inherent bias in probates, because probates were not a standard practice and were considered “neither perfunctory nor conventional.” There are very strong variations in the probate items listed, the details of the inventories, and the depth of detail from one probate to the next. Because the conditions that led to recording a probate inventory were so disparate, none of the formulaic elements that ruled the recording of mortgage contracts appeared in the probate inventories. However, they are irreplaceable sources to reinforce the economic picture painted by the notarial contracts, and they supplement the standardized data with illustrative evidence of the pervasive uses of debt across sociodemographic strata in Yucatán. The probates used here cover a period of approximately fifty years, which while not exhaustive, is an acceptable sample for the summary uses with probates. Zephyr Frank, who wrote an excellent study of the Brazilian economy and wealth distribution in the entire nineteenth century, used approximately 659 probates.

Book Outline

This book proceeds thematically rather than chronologically. The second chapter lays out Yucatán’s regional and historical background, while exploring its postcolonial transition to a capitalist economy in laying the foundation for its emerging personal credit market. In the mid-nineteenth century, Yucatán was a heterogeneous region: urban and rural, native Maya and mestizo, rich and poor—all these elements collided and overlapped. The nineteenth century was also marked by the aftermath of a secession war, an ongoing civil conflict with ethnic overtones, and the agricultural henequen boom that exacerbated the region’s economic disparities while increasingly tying it to the global market.

Chapter 3 focuses on the mortgages themselves and the development of the mortgage market in the wake of the 1857 Constitution and ensuing Reform Laws. The progressive bent of these laws, especially their reversal on the issue of the civil enforcement of usury laws, freed interest rates and opened the way for credit contracts to charge a price that reflected the risk each loan represented. This chapter addresses the importance and many interpretations of mortgages, not just as a documentary source in the book, but also as a critical interaction around which to analyze historical change in Mexico. Mortgages recorded by notaries are abundant in Latin American archives, and these debt contracts became the cornerstone of the credit market in Yucatán because of changes in the legal codes and the regional infrastructure. The contracts represent more than historical documents; they need to be understood and studied as an aggregate record of economic and social interactions in Yucatán.

The fourth chapter analyzes the formal and informal roles of notaries. The formal and explicit role was established by nineteenth-century laws and notarial codes. The informal role, developed as a result of the economic boom, highlighted the flexibility of the notary’s inherent ability to act as an intermediary. This chapter further addresses the mechanisms by which notaries aided in the development of financial vehicles better suited to the new economic climate created by the henequen boom. Without banks, the shift from a subsistence economy to export-led growth relied on, among other things, reinterpretations of personal networks. Notaries were uniquely equipped to become intermediaries in transactions based on trust and the quality of the information on which loan agreements hinged. The chapter explains what notaries did and shows the mechanics of how a social network of hacienda owners and enterprising merchants, as well as members of the elite, financed a boom without banks. The analysis of notarial functions in Yucatán’s mortgage market reveals notaries’ contributions to the creation of this market. Their active participation in recording contracts and connecting clients demonstrates how, in the absence of banks, they facilitated access to credit and created networks of clients that strengthened the role of individual connections in the mortgage boom.

The importance and role of property rights in credit markets is the subject of the fifth chapter. The progressive reforms of Mexico’s liberal legal transformation in the nineteenth century significantly expanded property rights and protection for its citizens, but it did not do this for all citizens equally. Gender was the main factor for this legal iniquity, as women had incomplete property rights, with a corresponding effect on their diminished status in Mexican society. The nineteenth century extended the legal inferiority for women that had originated in the colonial legal codes. Marriage still bound a wife to her husband in financial, physical, and moral ways, and a mother could not be the guardian of her own children if she was a widow. She could not enter into contracts on her own, she had no official or public political power, and her legal and professional roles were often in opposition or subservient to men. This legal inferiority was substantiated in the mortgage records, where the effect of property rights comes to light. While colonial records have long recorded the financial activity of widows who acquired their husband’s wealth after his death and invested in local loans, the literature has never considered the implications for female borrowers or the fact that married female borrowers generally paid much higher interest than their male counterparts. This chapter highlights how laws that were not created to address or respond to credit markets profoundly affected those who participated in them. It also countervails the conventional wisdom about the position of women in Latin American societies, in credit markets, and under the law in this period.

Monopoly, rent-seeking behavior, and insider networks are the scourge of developing economies, and in Mexico this trend toward small and concentrated economic activity has generally been observed among the powerful, the elite, and the government, which centralize their power and ration access to the fruits of that power. Chapter 6 explores this tendency within the notarial profession in Yucatán. Notaries were central to the financial mechanics in Yucatán, but they can hardly be considered elite, nor was their profession the nexus of power. Notaries were only one of the many institutions of civil law and civil power, and yet the tendency toward monopoly was reflected among them too. This chapter delves into this drive toward monopoly through the case study of one of the most important notaries in Mérida and his entrepreneurial and monopolistic bent in the mortgage market. This notary provides a prime example of the role of personal connections in fostering personal success in Mexico. As this chapter on Patrón Zavalegui’s practice and business demonstrates, this much-touted characteristic of Mexico’s economic markets permeates all levels of power and importance in society. As he became the engine of growth in the local credit market, he also became a monopolist among notaries. This combination of growth, entrepreneurship, and monopoly mirrors a pattern that is all too common in Yucatán and Mexico and reveals once more the mechanisms that have long operated there. Chapter 7 provides the conclusion.

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