The Global Flow of Silver: Social and/or Economic Effects (1500-1750 CE)

The ultimate destination for much of the silver produced in the Americas and Japan was China. Silver from the Americas flowed mostly across the Atlantic and made its way to the Far East. A popular route was around the Cape of Good Hope into the east, and sometimes it came over land. Major outposts for the silver trade were located in Southeast Asian countries, such as the Spanish Philippines. The city of Manila served as a primary outpost of the exchange of goods between the Americas, Japan, India, Indonesia and China. However, a large amount of silver was transported across the vast Pacific Ocean directly from the Americas as well, via the Manila Galleons.

When the Portuguese go from Macao, the most southern port city in China, to Japan, they carry much white silk, gold, perfume, and porcelain and they bring from Japan nothing but silver. Then have a great ship that goes to Japan every year, and brings back more than 600,000 coins worth of Japanese silver. The Portuguese use this Japanese silver to their great advantage in China. The Portuguese bring from China gold, perfume, silk, copper, porcelain, and many other luxury goods.

The venerable Elders of my home District explain that the reason grain is cheap despite poor harvests in recent years is due entirely to the scarcity of silver coin; the national government requires silver for taxes but distributes little silver in its expenditures. as the price of grain falls, tillers of the soil receive lower Returns on their laborers, and thus less land is put into cultivation.

In the past, the dye shops would allow customers to have several dozen pieces of cloth dyed before settling accounts and charging the customers. moreover, customers could pay for dying the cloth with rice, wheat, soybeans, chickens, or other foul. now, when you have your cloth dyed you receive a bill, which must be paid with silver obtained from a money lender.

The ore at Potosi silver mine is very rich black flint, and the excavation so extensive that more than 3000 Indians worked away hard with pics and hammers, breaking up the Flint or and when they have filled their little sacks, the poor fellows, loaded down with ore, climbed up those ladders or riggings some like mass and others like cables, and so trying and distressing that even an empty-handed man can hardly get up them. So huge is the wealth that has been taken out of this range since the year 1545, when it was discovered, up to the present year of 1628, that merely from the registered mines, according to most of the accounts in the Spanish royal records, 326, 000,000 silver coins have been taken out. This does not count the great amount of silver taken secretly from these mines to Spain, paying no 20 percent tax or registry fee, and to other countries outside Spain, including the Philippines and China.

The Spanish have silver mountains, which they mint into silver coins. When Chinese merchants trade in Southeast Asia and the Indian Ocean, they trade the goods we produce for the goods of others. But when they go to Luzon (Philippines) they only return with silver coins. Chinese silk yarn worth 100 bars of silver can be sold in the Philippines at a price of 200 to 300 bars of silver there. Moreover, porcelain from the official pottery works as well as sugar and fruit from my native province, are currently desired by the foreigners.

Since we were supplanted in the spice-trade by the Dutch, our chief investments or importations from the East Indies have been in dyed cotton cloth, slides, drugs, cotton-yarn, and wool: part of which commodities are for our own use, buy a much greater part, in times of peace, were brought to London for sale to France, Germany, the Netherlands, Spain, Italy, and our colonies. For Europe draws from Asia nothing of solid use; only materials to supply luxury, and only perishable commodities, but sends to Asia gold and silver, which is there buried and never returns. But since Europe has tasted of this luxury, since the custom of a hundred years has made Asian spices seem necessary to all degrees of people, since Asian silks are pleasing everywhere to the better sort, and since their dyed cotton cloth is useful wear at home, and in our own colonies, and for the Spaniards in America, it can never be advisable for England to quit this trade, and leave it to any other nation.