silver and seville -- 3/04/15

Today's selection -- from War and Gold by Kwasi Kwarteng. As the Europeans conquered the New World, it was silver, much more than gold, that they brought back with them to flood European markets. Between 1503 and 1660, they brought 16,000 metric tonnes of silver as compared to 185 metric tonnes of gold. All this precious metal came through the Spanish city of Seville:

"Peru was the most significant source of the gold and silver that flooded into Europe. The term 'Peru' applied in the sixteenth century 'to the whole of South America, not just to the territories which bear this name today'. The empire of Atahualpa, the last Sapa Inca, or emperor, had abounded in gold and silver. It was in Peru that the largest mining discovery in the New World was made. In April 1545, a minor Indian nobleman, called Diego Gualpa by the Spanish, climbed a hill in search of a shrine and was thrown to the ground by a strong gust of wind. He found himself gripping silver ore with his hands and reported the discovery to some sceptical Spanish adventurers near by. On further investigation, five rich veins of silver were discovered at Potosí, where a silver rush quickly followed. It was silver and not gold which in the eyes of the world 'became the symbol of quickly made fortunes'. To the French of the sixteenth century the term 'Peru' simply became a synonym for fabulous wealth.

"The Potosí deposits in Peru, situated in modern Bolivia, were described as 'a "silver mountain" of six miles around its base on a remote and desolate plateau, 12,000 feet above sea level'. The city built after this discovery rapidly grew in size, peopled entirely by immigrants. In 1555, only ten years after that discovery, the population of Potosí had risen from nothing to 45,000. It climbed to a peak of 160,000 just fifty-five years later in 1610. The voluntary labour of many immigrants was supplemented by conscripted teams of miners, employed under the mita system, which prescribed that a number of Indian villages within a certain radius of Potosí should provide a quota of their population to work in the mines. This system itself was abolished only in 1812. Each year the Indians of the prescribed region had to send 'roughly a seventh of all adult males to work in the mines and refining mills of Potosí -- about 13,500 men, it has been estimated. The furthest village or town that the mitayos were expected to come from was Cuzco, the historic capital of the Inca empire, from which recruits would travel for two months across the Andes to complete the 600-mile journey. Once in Potosí, the mitayos were obliged to work only one week in three, and their chiefs accordingly divided the indentured men into three shifts when they arrived. The working conditions in the mines themselves became a byword for hardship and cruelty. The indentured mitayo had to work twelve hours a day, with only an hour's break at noon, in a mine up to 500 feet deep, where the air was 'thick and evil-smelling, trapped in the bowels of the earth', and where tough physical work would be undertaken in near-darkness, with only candlelight as a source of illumination.

Indian Miners at Potosí, 1590, by Theodor de Bry

"The Spanish Crown did not own, or manage, mines directly. The Habsburgs' share of the profits from the mineral wealth of the New World took the form of a tax, the quinto real, or royal fifth. As its name implied, this was a 20 per cent royalty fee imposed on every ounce of gold and silver extracted from the New World which came into Seville, the only permissible entry port into Europe for the Spanish treasures from further west. In a period just short of 160 years, from 1503 to 1660, it has been estimated that 16,000 metric tonnes of silver arrived at Seville, enough to triple the existing silver resources of Europe, while only 185 metric tonnes of gold entered Seville from the New World during the same period, which increased Europe's gold supplies by only a fifth. Silver was the key element of the imaginary wealth of Spain. The wealth was imaginary because its effects on the Spanish monarchy were unexpected and would lead, in the long run, to bankruptcy and a diminution in the power of Spain in world affairs. ...

"Within Spain itself, it was the port of Seville which gained from the trade in gold and silver from the New World. It was in Seville that the House of Trade, a government bureau for the regulation and development of New World commerce, was established. Seville was also the location for the Council of the Indies, and it is in Seville that the extraordinary archives, documenting five centuries of the Spanish American empire, are housed in the Archivo General de Indias. It is no accident that four of the most widely performed operas in the modern era -- Mozart's The Marriage of Figaro and Don Giovanni, Rossini's Barber of Seville and Bizet's Carmen -- are set in this city, which in 2011 had a population of only 700,000. Seville in the sixteenth and seventeenth centuries was one of the greatest financial centres of the world. As if to entrench its position, in 1572 Philip II declared the town the only legal terminus of the American trade, a status which was kept in law until 1717. In Seville, the flow of bullion offered an unrivalled opportunity to 'acquire great wealth in trading' which 'lured both the local nobility and businessmen from abroad and from other regions of Spain'."



Kwasi Kwarteng


War and Gold: A Five-Hundred-Year History of Empires, Adventures, and Debt




Copyright 2014 Kwasi Kwarteng


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