City and region in the credit market of late colonial Guadalajara,Mexico

Regional studies of colonial Mexico have focused on economic, sociological and political themes that largely neglect developing relationships between urban centers and their regions. Understanding these relationships is necessary for a clearer determination of the beginning of dependency and underdevelopment. Data for this study come from loan and mortgage documents contained in the Libros de Hipotecas for Guadalajara, Mexico from 1721 through 1820. The records show that most of the credit necessary for rural economies to function came from creditors in the capital city of Guadalajara. Credit flows through the countryside corresponded to the distributional patterns of population, economic activities, and social networks. Districts with larger populations consumed greater amounts of credit in part because of the presence of many potential borrowers. Those areas involved primarily in trade and agriculture also needed much urban credit, particularly at critical stages in their economic development. Districts in which the region's wealthiest families resided also received more credit through the system of personal and business contacts which channelled the distribution of credit. The net flow of credit from city to region, however, does not necessarily indicate unilateral dependence of rural districts on the capital city. An analysis of the relative benefits to creditor and debtor indicates that the relationship between city and region was characterized by mutual dependence rather than urban exploitation of rural districts.