The title of this article seems to give the impression that its author is a financial expert. Unhappily, this is not the case. But—for quite unknown reasons—college professors are apt to acquire some empirical knowledge of credit facilities. Besides, I do not intend to give practical advice to anybody. I shall only try to show, how people in Puerto Rico, a century and a half ago, managed to survive—and at times prosper—in the midst of what some people used to call, not very affectionately, the “money complex.”
What makes the question interesting is the lack of banks or other credit institutions. Apparently, the first small savings banks did not appear until the 1870's. The paucity, if not the absolute absence, of liquid capital characterizes Puerto Rico until the period under study. Such a state of affairs had remote causes. Puerto Rico, as Spain's second colony in the New World, had had a prosperous start in the sixteenth century. Some gold was found, and the first ingenio was set up. But in the 1520's an exodus was set off by the attraction of the fabulous mineral wealth of the continent that was being conquered, an exodus that the threat of the death penalty was not able to stop effectively. The lack of sufficient settlers was then the initial cause of Puerto Rico's economic stagnation. Naturally, the following two hundred years should have been more than sufficient to allow recovery, for—popular beliefs to the contrary—mineral wealth was not the only source of economic prosperity in the Spanish monarchy. As a sample, the Philippines exported Chinese goods, Central America cocoa and dyestuff, Venezuela cocoa and tobacco, Guayaquil cocoa and timber, Quito textiles, Peru wine and flour, Chile flour and timber, Tucumán mules, Buenos Aires hides, and Cuba sugar and tobacco.