Papers presented by Hadar Hoter-ishay since 2019

2025 Atlanta, Georgia

"The Barings in Mexico: Sovereign Lending and International Trade through the Mexican 'Era of Chaos,' 1825-1861"

Abstract:

The paper examines Baring Brothers & Co.'s involvement in Mexico during the turbulent period from 1825 to 1861, often referred to as the “Mexican era of chaos” in literature. The Barings, one of the world's most prestigious merchant banking firms, served as Mexico’s financial agent in the London Stock Exchange despite the country’s default in 1827. Not only did they keep the official representation of Mexico after the default, but they continued to do so for the next decade while violating the professional logic of maintaining their good name as first-class financial intermediaries. Based on materials from the Baring Archive, Britain's National Archives, and the Mexican State Archive, the paper investigates the Barings’ motivations for continuing their financial involvement with Mexico despite its status as a denied borrower in London. It argues that the Barings were willing to experience reputational damage in Britain for the sake of commercial benefits in Mexico. These were realized through utilizing Mexican sovereign debt and dependency on domestic loans to gain significant discounts on import duties amidst severe protectionist policies via frequent use of the guías contracts with the government. By exposing the Barings’ strategies and interests, the paper shows the reciprocal connections between sovereign lending and trade in 19th-century Mexico, a duality embodied in the practice of merchant banking. Hence, it showcases the relevance of financial intermediaries to the stimulation of trade amidst the early decades of the first wave of globalization. Moreover, the paper highlights the relevance of Mexican domestic debt to the sustenance of commercial activity throughout the century despite political turmoil and protectionist policies. Finally, the paper analyzes the implications of the guìas domestic loans for Mexico's accumulation of customs duties revenues, damaging its ability to initiate industrialization in the local textile manufacturing industry.

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