American silver allowed the Spain of the Golden Age to undertake colossal undertakings and extend its dominance throughout the world. The New World dumped more than 16,000 tons of silver on the kingdoms of Castile over the course of the 16th century, 26,000 tons in the next, and another 39,000 in the 18th century. Forced to move to Seville and then to Cádiz, the silver flows were distributed without hindrance by the Spanish monarchy, and then were transported in increasing proportions to various places in Europe and reached India, China and Japan, crossing the oceans or by land. through the Turkish Empire.
The precious metals extracted from Spanish America generated exceptional liquidity, and, during the 16th and 17th centuries, were an essential factor in international trade that was already experiencing a primitive globalization. Between 1540 and 1700, a silver age took place, and a Castilian currency, the real of eight, or piaster, expanded to the confines of the West and East.
Available silver achieved predominance as a means of payment over gold, which, until its resurgence in the 18th century, circulated little, was hoarded or was invested in luxury expenses.
The treasure that Francisco Pizarro requisitioned from Atahualpa gives an idea of the fabulous riches plundered by the Spanish in the initial stages of the conquest. A total of 5,544 kilos of gold and 11,960 kilos of silver never seen before, which were shared by the Crown (royal fifth), captains and soldiers. In 1532, the cosmographer Pedro de Medina referred to the arrival of the spoils from Cajamarca: “Ships with round gold pastes measuring four spans long have arrived and there was a ship that brought five hundred arrobas (5,751 kilos) of silver.”
Once the Aztec and Inca treasures were exhausted, the conquistadors avidly devoted themselves to the search for precious metals and became miners. Although gold was found in gold pans and veins – such as the enormous nugget of four arrobas in the shape of a horse's head sent to Charles V from Azángaro (Peru) – the true American wealth was silver. For the next three centuries, until independence, that silver paid for trade with China and Europe and financed the Spanish monarchy's wars against its rivals.
The mines of Potosí (1545) and Zacatecas (1546) were the main silver producing centers on a planetary scale. The abundance of means of exchange and payment that made possible the massive shipments of American silver was a revolutionary novelty, which completely altered the monetary and commercial systems of all of Europe. The theologian and economist Tomás de Mercado was not wrong when he wrote, in the Suma de Tratos y Contratos (1569): “Seville and Atlantic Spain, the last corner of the world that they were, have become the center.”
Inserted in the Carrera de Indias, the silver was transported in convoys of between thirty and seventy ships, escorted by two warships, the capitan and the almiranta. After the creation of the mints of Mexico City (1535) and Potosí (1574), in addition to silver loaves, Spain began to receive reales in eight minted in America. The real, or peso, of medieval origin, a thin silver disc of about 3.4 grams, displaced its rival, the golden shield, even in the most conspicuous payments, being even imitated, in form and content, by the dollar US.
In the 16th and 17th centuries, silver and American reals became essential to buy silks, ivories, porcelains and other coveted oriental merchandise, since neither China, India nor Japan had any interest in products manufactured in Europe, and They only accepted gold or silver as exchange.
In 1595, the cargo of the Indies fleets was truly spectacular. According to the Sevillian chronicler Francisco de Ariño: “On May 8, 1595, they took one hundred and three cartloads of silver and gold from the captain, and on May twenty-third of the same year, they brought five hundred and eighty-three loads of silver and gold over land from Portugal. and pearls.”
Not all years were so wonderful. Sometimes, delays or losses caused by the fury of storms and piracy by the French, English and Dutch caused serious disruption to the Spanish and European economies. According to historian John H. Elliott, “when Sevillians sneezed, all of Europe trembled.”
The power of the Spanish silver coin was such that, in 1553, Thomas Gresham, a rich merchant in the service of the king of England, said that in Antwerp gold was no longer used in any transaction. “Only silver reales are abundantly found there,” he concluded.
In 1608, a bank was established in Genoa that operated exclusively with reales of eight Castilians. And the Senate of Venice attributed, in 1610, the deterioration of its trade with the regions of the Levant, once so flourishing, to “the great and notable disadvantage that our merchants have compared to those of other nations, who carry their capital in reales of Spain as a currency known and accepted by all those eastern nations, they contract and carry merchandise with those reales with great ease and alacrity."
The writers of the time (Luis de Alcalá, Cristóbal de Villalón and Luis Saravia de la Calle, among others) denounced smuggling and leaks of precious metals. It was a common opinion that American treasures tiptoed through the kingdoms of Castile, being quickly sent to Europe to cover the voracity of war.
The economic strength was maintained throughout the 16th century, stimulated by the galleons that came from America loaded with precious metals. In 1551, Charles V, cornered in Innsbruck, granted the Genoese bankers the first “extraction license” (permission to take silver out of the peninsula), in order to collect the money advanced in exchange for silver worth 250,000 ducats.
Starting in 1566, the production of precious metals skyrocketed due to the uprising in the Netherlands. In 1567, when the Duke of Alba was heading to Flanders to quell the rebellion, two convoys loaded with coins and silver accompanied his expedition. After the invasion, the Spanish government made massive transfers of silver that was minted in Antwerp to pay the third parties.
On September 13, 1583, the Indies fleet arrived in Seville with seventy ships packed with silver and coins destined for the Crown worth twenty-eight million maravedíes, but as soon as it landed the royal treasure was distributed among some of the bankers (Simón Ruiz, the Fugger and Juan Ortega de la Torre) who financed Philip II's campaign against the Flemish heretics and rebels.
From 1583 to 1593, Philip II sent monumental quantities of silver in trains of mules and carts to Barcelona, Alicante or Cartagena, from where the galleys left to take them to Italy. These sums made it possible to finance the military operations of Alejandro Farnese and the Invincible Armada.
However, as Pierre Vilar pointed out, the precious metals corresponding to the king never exceeded a quarter of the American treasures arrived between 1503 and 1660. The remaining three quarters ended up in the pockets of individuals.
This silver also came largely from Castile, since Spanish supply could not satisfy American demand and needed to import products from Europe to send to the colonies, so the trade deficit was paid with the export of silver.
The growing shipments of silver that Castile poured into Europe did not abate during the 17th century. With Philip III, Genoese banking acquired great prominence, and millions of pesos were transported from the Levantine and Catalan ports to the capital of Liguria.
With Philip IV, the massive launch of vellón currency (a piece of silver devalued with copper) only managed to cause the silver currency that circulated in Castile to flow abroad.
The Thirty Years' War forced astronomical numbers of mercenaries to be hired, but it ended without mutinies, because the payments to the Spanish armies were made in reales of eight. The Bourbons sought monetary stability and the reactivation of American mines. But Europe had already lost interest in silver, because Brazil's gold took the scepter from it.
The kingdoms of Castile strove to take advantage of the advantage of being the metropolis of colonies rich in precious metals. Until mining licenses were granted in 1552, most of the silver remained in Spain. Then, it was managed as best it could. In any case, it cannot be argued that American silver evaporated as soon as it arrived in Seville.
The documents testify to how the treasures of the Indies were spread throughout the kingdoms of Castile, how they left Seville on horses or wheeled vehicles, with an express indication of the amount they were carrying. That a good part of the money negotiated at the payment fairs of Medina del Campo, Rioseco or Villalón, or in the exchange centers of Seville, Toledo, Granada or Burgos, went abroad is another matter.
Fraud and smuggling, difficult to quantify, existed. In 1568, the sixteen ships from New Spain and the twenty-nine from Peru that arrived in Seville, according to the record of the accompanying bull, were carrying gold and silver worth 4,500 ducats, although in reality they had transported twice as much. However, individuals smuggled very few precious metals, with few exceptions, to the Casa de Contratación in Seville, and then furtively transferred them outside the Castilian borders.
Where did the veins of Potosí and Zacatecas, so appreciated throughout the world, go? To European countries, to pay for merchandise imports; to trade with China fueled by the Manila galleon, which carried silver to the Philippines from Acapulco; to the bankers and moneylenders who advanced money for wars; and, finally, to enhance the luxury of the nobility and the Church.
Was the Far East the cemetery of Spanish American silver stagnated there by Europe's deficit trade balance? In fact, everything seems to indicate that, at the end of the journey, in China, India and Japan, precious metals reactivated trade and revived economic activities. The benefits for Europe were more fruitful, as they allowed it to advance along the steep path of commercial capitalism.
The imperial strategy of the Austrians would not have been possible without money, the reverse of which would, however, be the postponement of Castilian interests in the face of a policy that in the end was impossible to sustain.
This text is part of an article published in number 635 of the magazine Historia y Vida. Do you have something to contribute? Write to us at redaccionhyv@historiayvida.com.
