Spanish involvement in the European wars which followed the French Revolution of 1789 affected New Spain, its wealthiest colony, in several ways: Madrid attempted to meet the expenses of war by increasing taxes and eventually, in 1804, ordered the seizure and auction of non-essential Church property. Since the Church operated as the colony's main banker and most of the wealthy owed it money, this threatened ruin. Napoleon's invasion of Spain in 1808 and replacement of King Ferdinand VII with his own brother, Joseph, provoked a crisis throughout Spanish America: did legitimate authority now lie with Joseph Bonaparte, with the Spanish resistance parliament in Cadíz or with the Viceroy?

While this situation produced wars throughout Spanish America between those supporting independence and those opposed, New Spain followed a very different route to independence. On 16 October 1810 Miguel Hidalgo, parish priest in the town of Dolores, issued a call for independence; the failure of his ally, Colonel Ignacio Allende, to rally local army units made Hidalgo dependent on the large mob of rural workers who rallied to his cause. After pillaging San Miguel and Celaya, the mob sacked the wealthy silver town of Guanajuato. The insurgents seized several other towns before finally being defeated at Puente de Calderón, near Guadalajara; most of Hidalgo's troops deserted. Hidalgo and Allende were captured and taken to Chihuahua, where they were executed; their heads were hung on public display as a warning until 1821. After Hidalgo's death the insurrection continued, initially under the leadership of José María Morelos, another priest, though he was captured and executed in 1815.

Crucial to the failure of Hidalgo's rebellion were the fears of the Creoles: though many resented aspects of Spanish rule, Hidalgo's revolt raised the spectre of an Indian revolt in which they, as well as the Peninsulares, would be the victims. The situation was, however, transformed by events in Spain, where in 1820 a military revolt forced Ferdinand VII to adopt a constitution and convene a parliament. Hostile to the more liberal government in Madrid, Creole leaders backed General Augustín de Iturbide in putting forward a manifesto, the Plan de Iguala. This proposed independence but with three guarantees to reassure the Peninsulares: a European prince was to be found for the throne; Catholicism was to be the state religion and there was to be equality of Creoles and Spaniards. With Madrid unable to send troops due to unrest in the army, independence was recognized by the Viceroy.

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