Silver and Gold

INTRODUCTION

Towards the end of the Protestant Reformation, a family called the Hapsburgs was a big European power. During the middle of the 16th century, they found themselves in financial trouble. Protestants, the English, the Dutch, and Ottoman Turks were all causing problems for the Hapsburgs. This meant that the Hapsburgs needed to maintain a large army to keep things under control, but this cost them a lot of money. They soon found themselves up to their neck in debts, and were desperately searching for a way to make more money.

This problem was the main cause of the exploration of the New World. The Hapsburgs realized that there was a lot of profit to be found in the New World, so they allowed a few private entrepreneurs to go explore. However, these entrepreneurs weren't able to work to their fullest because the Hapsburgs maintained that, since they owned the New World, they had total control over it, including being able to dictate what everyone did.

Soon, colonies were being set up in Central and South America, and there started to be some real profit in the New World. Precious metals were found in abundance, and were shipped back to Spain and the awaiting Hapsburgs in the form of bullions (bars of gold). Trade flourished between the Philippines, China, the New World, and Spain as a result of the wealth of precious metals. Everyone wanted gold and silver, and Europeans had their eyes set on silks and spices (see relating Silks and Spice website) that Asia had to offer. This led to a lot of “Global Contact”; the world was connected by a common interest in material goods.

PIZARRO AND GOLD

In 1545, before the Spanish used Indian labor to mine for gold and silver, their main way of obtaining precious metals was to steal from the indigenous peoples. A classic example of this would be Pizarro's contact with the Incas in 1533.

Francisco Pizarro landed in Cajamarca in November of 1531. Pizarro met Atahualpa, the Inca-King, in the city. After a discrepancy regarding the Incas not wanting to accept Christianity as their religion and Charles V as their ruler, ending with Atahualpa throwing the Bible to the ground, Pizarro and his men took Atahualpa captive. Atahualpa agreed with Pizarro to have a ransom of gold and silver brought. His ransom was the largest ever to

be seen in www.mrsedivy.com/explor2.htm

history. The total amount came to about $101,759,680: $96,624,000 in gold and $3,203,300 in silver. If you think that's a lot now, think about how much it would've been back then! A large Spanish family could www.fuerzasarmadasecuador.org/ live comfortably on $50 a reinoquitoquipaipan.htm year at that time.

The ransom was split up into shares; soldiers, captains, Pizarro, and the Hapsburgs all got part of the cut. Pizarro alone received 13,420 pounds of gold and 26,000 pounds of silver. The Hapsburgs, of course, got their "royal fifth" of the shares. Much of the gold had arrived for the ransom as exquisite works of art, perso.club-internet.fr/ dduguay/cajamarca.htm

which were then melted down and made into bullion to transport back to Spain and the Hapsburgs.

POTOSI

Potosi was one of the leading cities of silver mining during this time. Located in modern day Bolivia, it was a mountain rich with veins of silver. It was called “Cerro Rico”, meaning “Rich Hill”. The Natives, Aymara and Incas, didn't mine it extensively, but occasionally they took to the mines. However, that would change drastically once the Spaniards came.

The Spanish colonizers came in 1540 with a point to mine the silver. The mining industry brought prosperity to the city. For example, in 1547 the population was 14,000, in 1571 it was 40,000, and in 1600 it was 150,000, making it by far the largest human community in the Western Hemisphere.

For the first 25 years, the Indian way of mining was the most proficient, but around 1570, large mercury deposits were found not too far west of Potosi, and they started using a new technique based on how the silver interacted with the etext.lib.virginia.edu/kinney/ small/potosi.htm mercury. The revenue generated from the mines of Potosi was subject to the Hapsburgs' “royal fifth”, so Indian labor became crucial to them. Subsequently, a draft labor system called “mita” was implemented. This meant that Indian communities for hundreds of miles outside Potosi had to send one-seventh of their adult male population to work in the mines every year. These “mitayos”, the workers drafted through the “mita”, would supply about one half of the mine owners' labor need. They earned a small wage, but were otherwise oppressed.

Labor conditions in the mines were very harsh. Many sickened and died, especially from silicosis, or black lung disease, within months of arriving. Even today the miners chew coca leaves and drink alcohol so they are drugged and numb and can't feel the pain. They have to chisel granite walls and carry 150 pound bags of gravel that they carve off the mountain, and all the while they are inside these tiny mine shafts inside a mountain. In the three centuries Potosi 's mines were heavily worked, the estimated total death toll is around 8 million. At one point, Potosi had a native name meaning “the mountain that eats men”. Because no one wanted to go work (or die) in the mine, there was a huge depopulation of the area surrounding Potosi because the Indian males would flee from the area the mitayos were drawn from.

By the mid-1600s, the crest of this city was reached, and everything went downhill from there. In the 1620s, there were gang “wars” between the local miners and Castilians (people from the northwestern part of Spain), and there were also floods causing users.pandora.be/stefancr/ Reizen%20-%20Bolivia.htm problems (as they tend to do). In the 1650s and 60s, there was fraud in the silver trade. By 1700, the population was down to 60,000, and the annual silver output was down by two-thirds.

Unfortunately, people still have to work in the mines at Potosi, mining mostly zinc and tin but occasionally silver. Out of those 6000 people, most of them work there because it's what their family has always done or because there is just nothing else they can do to make a living. Nowadays, working six days a week, miners earn 12 cents for every 150-lb bag of gravel they carry, and on a good day they carry 40 bags, earning $5.

ZACATECAS

Another city known for its silver production is Zacatecas. Located in Mexico, its riches were discovered in 1546. It was soon the third largest city in Mexico, exceeded only by the capital and another city called Puebla.

By the early 17th century, Zacatecas was producing one-third of Mexico's silver and one-fifth of the world's. The prosperity of this city coincided with the silver industry. From 1690-1752, there was a period of great prosperity, but in 1752 the value of silver dropped and there was a huge economic depression until 1768 when the silver industry kicked up again. There was another period of expansion through 1810. In 1777, the population of Zacatecas was 15,000, and in 1803, it was 33,000.

http://www.mexconnect.com/mex_/travel/acogan/aczacatecas.html

MONEY

As early as 1536, gold and silver coins were being made in Mexico City at the Western Hemisphere's first mint. Silver coins were made in denominations of Ocho Reales in 1572. The silver coins called “Silver Dollars” were circulating in Europe and Asia. There was a widespread practice of cutting the coins into smaller pieces, which is where we get the terms “pieces of eight” and “two bits”. On the back of the coins, there was a cross showing where to break the coin into pieces. The point of breaking the coins was to make smaller denominations of the coin. It was like making pennies, nickels, dimes, and quarters. The dollar sign comes from the Pillars of Hercules, the design for one issue of the coin. By the end of the 18th century, Spanish dollars made up the majority of England's treasury, so they made a new seal for the coin and converted it to England's official currency.

TRANSPORTATION

This silver that was mined had to go on a long journey until it reached its final destinations. Silver from the main mining sites, such as Zacatecas and Potosi, were sent to various places. Potosi silver was sent to Panama, where Spanish Treasure fleets on their trading routes then picked it up. Silver from Zacatecas was sent to Vera Cruz, where the treasure fleets also picked it up.

The way that all the precious metals were able to reach Spain and the awaiting Hapsburgs was through the “Spanish Treasure Fleet System.” This was a system where they had two fleets of ships, called flotas, make a trip from Spain 's main seaport (Cadiz), to the New World. These flotas included not only merchant ships that carried all the trade goods, but also a host of armed www.piratehaven.org/ ~beej/pirates/ ships, scouting boats, and supply ships to help the journey along. The flotas made their long voyages twice a year, even though they were hardly ever on schedule due to the winds and weather. Colonies were completely dependant on the arrival of the fleets, as the Hapsburgs had made it illegal for them to trade with anyone else.

The Spanish Treasure Fleet System was most productive from the years 1590-1600, and eventually wasn't able to function anymore. Hapsburg leadership started to go down the drain as debts built up. The mines were starting to be overly exploited and were no longer as profitable, so the Hapsburgs weren't getting as much money out of it as they needed. The Dutch and the English began to arrive in the New World, colonizing and trading just as www.piratehaven.org/ ~beej/pirates/ much as the Spanish. This broke the Spanish colonies' total dependence on the treasure fleets. The debts started to become so great that Spain didn't even have the funding to build ships anymore, and in 1778 came the end of the Treasure Fleet System.

Here is a map of the trade routes

BIBLIOGRAPHY

http://www.common-place.org/vol-03/no-04/potosi/

http://www.geocities.com/mike_perry_80521/Potosi.htm

http://www.sptimes.com/2002/12/08/Travel/Remains_of_a _silver_e.shtml

http://www.mexconnect.com/mex_/travel/dpalfrey/dpcolo nial3.html

http://www.ourmexico.com/features/zacatecas.html

http://www.unm.edu/~ecdn/essay1600.html

http://www.geocities.com/Athens/Acropolis/7016/zacateca s/history_of_zacatecas.htm

http://www.orecity.k12.or.us/ogden/myazinproj/01bbbpizarro/pizarr opage.htm

http://www.ucalgary.ca/applied_history/tutor/eurvoya/inca.html

http://cc.usu.edu/~nanjthatcher/nancy/WEB/Stories/Pizarro.htm