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2 Brungardt, Maurice P., ‘The economy of Colombia in the late colonial and early national periods’, in Fisher, John R., Kuethe, Allan J., and McFarlane, Anthony, eds., Reform and insurrection in Bourbon New Granada and Peru, Baton Rouge, LA: Louisiana State University Press, 1990, p. 164Google Scholar.

3 Oszlak, Oscar, ‘The historical formation of the state in Latin America: some theoretical and methodological guidelines for its study’, Latin American Research Review, 16, 2, 1981, p. 7Google Scholar.

4 Ibid.

5 Ibid., p. 23.

6 Benjamin Franklin, quoted in Bolles, Albert S., The financial history of the United States from 1774–1789: embracing the period of the American Revolution, New York, NY: D. Appleton and Co., 1884, p. 257 (emphasis added)Google Scholar.

7 I have discarded a discussion of the ‘endowment approach’, which argues in part that natural endowments are paramount to understanding institutional development and long-term economic growth. See, for example, Engerman, Stanley and Sokoloff, Kenneth L., Factor endowments, inequality, and paths of development among new world economies, Cambridge, MA: National Bureau of Economic Research, 2002CrossRefGoogle Scholar; Daron Acemoglu, Simon Johnson, and James A. Robinson, ‘The colonial origins of comparative development: an empirical investigation’, American Economic Review, December 2001; Acemoglu, Daron, Johnson, Simon, and Robinson, James A., ‘Reversal of fortune: geography and institutions in the making of the modern world income distribution’, Quarterly Journal of Economics, 107, 4, 2002, pp. 1231–94Google Scholar.

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9 North, Douglass C., Institutions, institutional change and economic performance, Cambridge: Cambridge University Press, 1990, p. 3CrossRefGoogle Scholar.

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13 Ibid., p. 25.

14 Ibid., p. 47.

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17 Ibid.

18 Ibid., pp. 2–3.

19 de la Escosura, Leandro Prados, ‘The economic consequences of independence in Latin America’, in Bulmer-Thomas, Victor, Coatsworth, John H., and Cortés-Conde, Roberto, eds., The Cambridge economic history of Latin America, Vol. I: the colonial era and the short nineteenth century, Cambridge: Cambridge University Press, 2006, p. 463Google Scholar.

20 Ibid., p. 481. See also Centeno, Miguel Angel, Blood and debt: war and the nation-state in Latin America, University Park, PA: Pennsylvania State University Press, 2002, p. 131Google Scholar.

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23 Centeno, Blood and debt, p. 106.

24 Grafe and Irigoin, ‘The Spanish empire’, p. 36.

25 Ibid., p. 40.

26 Ibid., p. 41.

27 Ibid.

28 Perkins, Edwin J., American public finance and financial services 1700–1815, Columbus, OH: Ohio State University Press, 1994 p. 104Google Scholar.

29 Dawson, Frank Griffith, The first Latin American debt crisis: the City of London and the 1822–25 loan bubble, New Haven, CT: Yale University Press, 1990, p. 14Google Scholar.

30 Ibid., p. 22.

31 Centeno, Blood and debt, p. 134.

32 Fernando Lopez-Alves considers this relevance in ‘The transatlantic bridge: mirrors, Charles Tilly, and state formation in the River Plate’, in Centeno, Miguel and Lopez-Alves, Fernando, eds., The other mirror: grand theory through the lens of Latin America, Princeton, NJ: Princeton University Press, pp. 153–76Google Scholar.

33 For example, see Tilly, Charles, Coercion, capital and European states, AD 990–1990, Cambridge, MA: Blackwell, 1990Google Scholar; Patrick K. O’Brien, ‘Fiscal and financial preconditions for the rise of British naval hegemony, 1485–1815’, LSE Working Papers in Economic History, 2005, http://eprints.lse.ac.uk/22326/1/WP91.pdf (consulted 30 May 2010); Weiss, Linda and Hobson, John M., States and economic development: a comparative historical analysis, Cambridge, MA: Polity Press, 1995Google Scholar.

34 Vries, P.H.H., ‘Governing growth: a comparative analysis of the role of the state in the rise of the West’, Journal of World History, 13, 1, 2002, pp. 67–138CrossRefGoogle Scholar.

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36 Weiss and Hobson, States and economic development, p. 9.

37 Ibid., p. 4.

38 Oszlak, ‘Historical formation’, p. 7.

39 Ibid., pp. 7–8.

40 Ibid., p. 6.

41 Ibid.

42 Ibid., p. 14.

43 Ibid., p. 8.

44 Bushnell, David, The Santander regime in Gran Colombia, Westport, CT: Greenwood, 1954, pp. 12, 22, 24Google Scholar.

45 Ibid., p. 24.

46 Dawson, First Latin American debt crisis, p. 40.

47 A famous example of the dangerous eagerness of London financiers to create new bonds in the 1820s is the case of the loan to Poyais, a fictional country led by Gregor MacGregor. See, for example, ibid., p. 41.

48 See generally, ibid.

49 Bushnell, Santander regime, p. 113.

50 Ibid., p. 96.

51 Ibid., p. 96.

52 Dawson, First Latin American debt crisis, p. 225.

53 Bushnell, Santander regime, pp. 117–18.

54 Walther L. Bernecker, ‘Latin America and Europe in the nineteenth century: the impact of an unequal relationship’, in Bernecker and Tobler, Development and underdevelopment, p. 151.

55 Bushnell, Santander regime, p. 124.

56 Ibid.

57 Dawson, First Latin American debt crisis, p. 24.

58 Ibid., p. 92.

59 Ibid., pp. 92–93.

60 For more information about the ‘Continental’, see for example Grubb, Farley, ‘Creating the U.S. dollar currency union, 1748–1811: a quest for monetary stability or a usurpation of state sovereignty for personal gain?’, American Economic Review, 93, 5, 2003, pp. 1778–98CrossRefGoogle Scholar; idem, ‘The US Constitution and monetary powers: an analysis of the 1787 Constitutional Convention and how the constitutional transformation of the nation's monetary system emerged’, NBER Working Paper 11783, 2005; idem, ‘Benjamin Franklin and the birth of a paper money economy’, University of Delaware Working Paper 2007-01, 2007, http://www.lerner.udel.edu/economics/WorkingPapers/2007/UDWP2007-01.pdf (consulted 6 December 2011); Perkins, American public finance; Ferguson, E. James, The power of the purse: a history of American public finance, 1776–1790, Chapel Hill, NC: University of North Carolina Press, 1961Google Scholar; Bolles, Financial history.

61 Bolles, Financial history, p. 230.

62 Riley, James C. and Van Winter, Peter J., American finance and Dutch investment 1780–1805, New York, NY: Arno, 1977, p. 26Google Scholar. See also Dewey, Davis Rich, Financial history of the United States, New York, NY: Longmans Green, 1920, pp. 47–8Google Scholar.

63 Riley and Van Winter, American finance, p. 36.

64 Ibid., pp. 52, 61, 63.

65 Dewey, Financial history, p. 48.

66 Ibid., p. 58.

67 Bordo, Michael D. and Végh, Carlos A., ‘What if Alexander Hamilton had been Argentinean? A comparison of the early monetary experiences of Argentina and the United States’, Journal of Monetary Economics, 49, 3, 2002, p. 473CrossRefGoogle Scholar.

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69 Jaramillo, Meisel, and Urrutia, ‘Continuities and discontinuities’, p. 439.

70 Ibid., p. 439.

71 Rippy, Fred J., British investments in Latin America, 1822–1949: a study in the operation of private enterprise in retarded regions, Minneapolis, MN: University of Minnesota, 1959, p. 28Google Scholar.

72 Ferguson, Power of the purse, p. 58.

73 Ibid., p. 57.

74 Ibid., p. 144.

75 Grubb, ‘US Constitution’, p. 8.

76 Stabile, Origins, pp. 54, 59.

77 Ibid., p. 64.

78 Ferguson, Power of the purse, p. 318.

79 Ibid., p. 319.

80 Alexander Hamilton, quoted in Richard Sylla, ‘The United States: financial innovation and adaptation’, in Bordo and Cortés-Conde, Transferring wealth and power, p. 244.

81 Stabile, Origins, p. 12; Bordo and Végh, ‘What if Alexander Hamilton’, p. 474.

82 Ferguson, Power of the purse, p. 238.

83 Oszlak, ‘Historical formation’, p. 7.

84 Michael Bordo and Roberto Cortés-Conde, ‘Introduction’, in Bordo and Cortés-Conde, Transferring wealth and power, p. 8.

85 Jaramillo, Meisel, and Urrutia, ‘Continuities and discontinuities’, pp. 425–6.

86 Ibid., p. 425.

87 Ibid., p. 426.

88 Stabile, Origins, p. 23.

89 Ibid., pp. 54, 59.

90 Dewey, Financial History, pp. 50–1.

91 Bushnell, Santander regime, pp. 84, 85. Bolívar noted that, even though the taxes were no more oppressive than under the colonial regime, ‘the old taxes had the advantage of being habitual and therefore were considered mild’. This underscores the way in which familiarity can create legitimacy in the collection of taxes. Bolívar from La Gaceta de Colombia, 17 December 1826, as quoted in Bushnell, Santander Regime, p. 107.

92 Ibid., pp. 86, 99.

93 Bushnell, Santander regime, p. 99.

94 Gouverneur Morris, a founding father, once wrote: ‘America having never been much taxed … and the contest in question being on the very Question of Taxation the laying of Imposts unless from the Last necessity would have been Madness’ (as quoted in Stabile, Origins, p. 23).

95 Ferguson, Power of the purse, p. 27.

96 Ibid., p. 51.

97 Bolles, Financial history, p. 121.

98 Ibid.,.

99 Ferguson, Power of the purse, p. 58.

100 Bolles, Financial history, p. 129.

101 Ibid., pp. 135, 141, 142.

102 Maria Alejandra Irigion, ‘Gresham on horseback: the monetary roots of Spanish American political fragmentation in the nineteenth century’, LSE Economic History Working Paper 96/06, December 2006, http://eprints.lse.ac.uk/22321/1/wp96.pdf (consulted 6 December 2011), p. 15.

103 Ibid., p. 13.

104 Ibid. As New Granada was less productive than Peru or Mexico, it received situados (subsidies) from other parts of the empire to help cover the costs of colonial administration. Once independence was achieved, Gran Colombia relied on foreign loans to bridge the gap between its expenses and its domestic revenues. See Irigion, ‘Gresham on horseback’. See also Fisher, John R., Kuethe, Allan J., and McFarlane, Anthony, eds., Reform and insurrection in New Granada and Peru, Baton Rouge, LA: Louisiana State University Press, 1990, p. 2Google Scholar.

105 Irigion, ‘Gresham on horseback’, p. 13.

106 Ibid., p. 14.

107 Gresham's Law essentially states that bad money will drive out good money if both are required to be accepted as legal tender. When the quality of money varies, the incentive becomes to hoard higher quality currency, leading the lower quality money to be circulated more predominantly.

108 Bushnell, Santander regime, p. 107.

109 The military of Gran Colombia was dominated by Venezuelans whereas the government was more strongly influenced by Colombians. This was a persistent source of tension in the Republic. See, for instance, ibid., pp. 60–1.

110 Ibid., p. 107.

111 Dawson, First Latin American debt crisis, p. 22.

112 Grafe and Irigoin, ‘The Spanish empire’, p. 40.

113 Jaramillo, Meisel, and Urrutia, ‘Continuities and discontinuities’, p. 417.

114 Bushnell, Santander regime, p. 84.

115 Perkins, American public finance, p. 358.

116 Ibid., p. 349.

117 Bordo and Cortés-Conde, ‘Introduction’, p. 10.

118 See, for instance, Bordo and Végh, ‘What if Alexander Hamilton’; Richard Sylla, ‘The political economy of early U.S. financial development’, in Haber, North, and Weingast, Political institutions, pp. 60–91.

119 Sylla, ‘Political economy’, p. 61.

120 See for example Grubb ‘Creating the U.S. dollar’; idem, ‘US Constitution and monetary powers’; Perkins, American public finance; Ferguson, Power of the purse.

121 Sylla, ‘Political economy’, p. 85.

122 Ibid., p. 63.

123 Hansjjorg Siegenthaler, ‘Hazards of growth and conditions of long run success: the case of the United States’, in Bernecker and Tobler, Development and underdevelopment, p. 34.

124 Oszlak, ‘Historical formation’, p. 7.

125 Ibid.

126 Bushnell, Santander regime, pp. 78, 81.

127 Ibid., pp. 81, 107.

128 Orjuela, Ximena, El congreso hace historia: Colombia 1819–1929, Bogotá, Colombia: Villegas Editores, 2004, p. 69Google Scholar.

129 Sylla, ‘United States’, p. 232.

130 Ibid., p. 236.

131 Bordo and Végh, ‘What if Alexander Hamilton’, p. 473.

132 Sylla, ‘United States’, p. 237.

133 Ibid., p. 246.

134 Sylla, ‘Political economy’, p. 74.

135 Jaramillo, Meisel, and Urrutia, ‘Continuities and discontinuities’, p. 441.

136 Bushnell, David, The making of modern Colombia: a nation in spite of itself, Berkeley, CA: University Press, 1993, p. 54Google Scholar.

137 Oszlak, ‘Historical formation’, p. 7.

138 Constitution of the Republic of Colombia, trans. Bernard Moses, Philadelphia, PA: American Academy of Political and Social Science, 1893, Articles 13 and 14, p. 63.

139 Bushnell, Santander regime, p. 24.

140 Orjuela, El congreso hace historia, p. 70.

141 Bushnell, Making of modern Colombia, p. 62.

142 Irigoin, ‘Gresham on horseback’, pp. 13–14.

143 Grubb, ‘US Constitution’, p. 59.

144 Ibid., p. 52.

145 Ibid.

146 Sylla, ‘Political economy’, p. 734.

147 Ibid.

148 Grubb, ‘US Constitution’, pp. 1, 59. See also Rousseau, Peter L., ‘A common currency: early U.S. monetary policy and the transition to the dollar’, NBER Working Paper 10702, 2004, pp. 3–4Google Scholar.

149 Romero, ‘Building a new history’.