The Regeneration – Between the Doctrine and the Need: The Debate Over Free Banking and the Legal Tender in Colombia (1880–1903)

This article studies how the Regenerative Government (1880–1903) in Colombia positioned monetary policy as one of the central subjects in the political arena by the end of the nineteenth century, and how the struggles of this attempt transformed the political economy of the period. In the background of the monetary, debates were some relevant characteristics: the country was facing serious difficulties as a consequence of an uneven integration of sectors to international trade, the de facto bimetallic regime, the formation of conglomerates of regions, and the difficulty of implementing paper money. Facing this situation, the Regenerating Governments found themselves in the need of imposing monetary and credit rules. They attempted to implement the scientific rules prevailing at the time and the possibilities that the national reality allowed them. As a consequence, the interests of the merchant elites and bankers had eroded the existing free banking system. Some bankers took advantage of the situation of the dubious management that the State gave to the monetary issue and succeeded on speculative finance increasing their wealth. Others, on the other hand, tried to strengthen their relations with the State. In this perspective, this article will synthesize the main aspects by agents of the debate between free banking and forced course.