Banking in War and Peace

The Spanish Bank of Saint Ferdinand was established by a royal decree on 9 July 1829. It was part of a set of financial innovations introduced in the last years of the reign of Ferdinand VII, which included the Commerce Code of May of the same year and the founding of the Madrid Stock Exchange on 10 September 1831. These three innovations were largely due to the talent of the jurist Pedro Sainz de Andino, who wrote the charter of the Bank and of the exchange, and proposed the writing of the code and, once the royal agreement was obtained, carried out the redaction of the whole book himself. This considerable wave of financial innovation was made possible not only by the remarkable abilities of Sainz de Andino but also by the political and financial evolution of Spain in those years. The final years of Ferdinand’s reign witnessed a certain mellowing of the old ferocious autocrat. The causes of this relative redress were economic and dynastic. Incompetent economic management kept his government in permanent insolvency, which contributed to the defeat of the Spanish colonial armies in America and to the consequent loss of the empire. For a better financial performance the king was forced to turn to abler officials and bankers, who happened to be less reactionary than his former ministers and counsellors. In addition, this moderating of his original despotism disappointed several of his formerly staunch supporters, who shifted their allegiance to his brother Charles, his heir apparent — as his first three marriages had produced no live heirs.