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date: 30 September 2022

Silver Trade and Transportation in the Spanish Atlanticfree

Silver Trade and Transportation in the Spanish Atlanticfree

  • Leonardo Moreno-ÁlvarezLeonardo Moreno-ÁlvarezUniversity of Pittsburgh, History


Silver was the lifeblood of Spain’s early modern transatlantic empire. Transatlantic silver transfers affected the nature of shipping, credit, and trade in the Iberian Atlantic and, eventually, across the entire globe. Large-scale silver mining in Mexico and Perú began in the mid-16th century. To sustain trade and bullion transportation across the Atlantic, the Castilian Crown developed a convoy system known as the Carrera de Indias. This system of armed fleets that sailed between authorized ports on a regular schedule began in the 1560s and peaked between 1580 and 1620. During this period, Spanish silver peso coins of eight reales (known in English as pieces of eight) became a de facto international monetary standard because of their high proportion of high-purity metal. Silver circulated in the American colonies before departing for Spain, whether through trade or inter-colonial transfers. Bullion and coins also moved through channels beyond the Castilian monarchy’s control, most notably through unregistered remittances and unauthorized trade with other European interlopers. During the Habsburg era, the Castilian monarchy’s obligations to foreign bankers, particularly the Genoese, increased.

By the 1650s, the convoy system’s efficacy, as well as the profitability of several mines, had significantly diminished. Although mining production slowly recovered during the second half of the century, silver smuggling out of Spanish American ports further reduced the volume of bullion remittances going through authorized channels. After 1720, the combined effect of administrative reforms, increased production in American mines, and the resurgence of Spanish power under the Bourbons revitalized transatlantic bullion transfers. The last peak in silver transfers from the New World to the Old began in 1780 and lasted until 1808, when the beginning of independence movements across the Spanish Americas dissolved the world’s largest monetary union. Estimates of the total volume of metal remittances and their effects on the global economy have been subject of historical debates for almost a century.


  • History of Latin America and the Oceanic World
  • 1492–1824
  • Colonialism and Imperialism

Early Silver Consumption and the First Silver Mining Boom, c. 1500–1620

For centuries, Indigenous peoples of the Americas used native mining and metalworking techniques to produce a wide variety of silver and gold objects. Archaeological studies have found evidence of silver smelting in the Andes dating back to at least the 1st century ce.1 Most Amerindian cultures considered silver to be, although precious, second to gold in value. Compared to gold, silver is harder to locate, separate from other minerals, and refine. Additionally, buried silver corrodes over centuries in a way that gold does not.2 A notable exception to this tendency was the Chimú culture of northern Perú (1100–1470), where silver seems to have been the preferred precious metal.3

Transatlantic circulation of precious metals only began after the first Europeans arrived in the Americas and pre-Columbian artifacts changed hands. Rescate, the Spanish word used to describe many transactions between early conquistadors and Indigenous peoples, was a form of coerced trading that resembled extortion more than trade. Indigenous groups that refused to give up their property to the Spanish risked becoming the targets of more violent raids. In exchange for providing permits to conduct rescates, the king of Spain received a fifth of all the loot. In the 1520s and 1530s, after the conquest of the large Mesoamerican and Andean polities, even larger quantities of gold, silver, and other precious metals traveled to Spain. Only a handful of pre-Columbian silver artifacts survived the first decades of conquest. Some pieces were preserved on account of their craftsmanship, while others remained underground or underwater until the 20th century. Most sacred objects, not deemed interesting enough for preservation in private cabinets or royal collections, were melted down.

Bullion transportation on a large scale only began when silver mines began producing large quantities of the white metal. Although gold continued to capture many early adventurers’ imaginations, exploitation of gold deposits in the Americas was relatively rare until the 18th century. Exploratory surveys in the 1530s and 1540s had shown the possibilities of the silver mines in north-central New Spain and Upper Perú. Large-scale mining, however, only took off after the 1550s. Silver, which had been of secondary interest for Spanish settlers, became their primary focus of interest. Mining historians have established how silver mining in the Americas spurred economic activity in the colonies and determined labor conditions that ruled imperial trade for hundreds of years.4

New refining techniques made mining more profitable and financed the unprecedented increase in the volumes of silver produced in the second half of the 16th century. The exploitation of American mines depended on the transportation of other heavy metals that, for the most part, were not available in the New World, particularly iron, lead, and mercury. The availability of these metals in mining towns was a fundamental factor in the profitability of several mines. Iron and steel for mining and agricultural tools came, for the most part, from mines in northern Spain, as well as from trade with northern European countries. Between 1537 and the 1550s, when lead was central to the smelting process in New Spain, large quantities of the metal traveled as ballast on ships. By 1557, a new refining method using amalgamation made the exploitation of low-purity silver ores possible.5 However, the amalgamation process consumed large quantities of mercury, which had to be extracted and transported from the mines of Almadén in Spain and Idria in Slovenia. The mercury-laden ships, the azogue fleets, became crucial to the production of silver in New Spain. The existence of mercury mines in Huancavelica, in Perú, made transportation more manageable in the Andes. Nevertheless, thousands of mules and llamas were necessary to carry the mercury from Huancavelica to Potosí.6 Like a conveyor belt, silver and other precious minerals moved in the direction of Europe, while mercury and iron, necessary for mining and refining those metals, flowed in the opposite direction.

An unintended consequence of the introduction of mercury which would affect silver’s circulation within the Americas was the progressive subordination of miners to mercantile interests. Merchants contracted with the royal administration for the distribution of mercury and other supplies to distant mines. Miners and owners of refining mills could rarely afford to finance the entire process of extracting and refining the silver ore, so they depended on merchants who provided them with the necessary equipment and financial resources. On many occasions, those same merchants were the only buyers available to the miners, especially in distant regions. Thus, merchants received payments in silver bullion, becoming the only link between the miners and the markets, setting prices at both ends, and controlling the distribution of imported goods.7

The Logistics of Silver Transportation

An early logistical problem that the Spanish faced was that of ensuring communications between mining regions and seaports. In New Spain, a road connecting Mexico City and Zacatecas, the Camino Real de Tierra Adentro, required expanding the military frontier along the royal road, with several garrisons along the way to guard against the attacks of Chichimeca peoples.8 This configuration was essential to guarantee that silver arrived in Mexico City, whence it was sent to the port of Veracruz. Although military considerations were not as relevant in South America, Peruvian silver still had to descend thousands of meters from Potosí to the Pacific port of Arica. Pre-Columbian roads and infrastructure served as the basis for communications between the Andes and the coast. Indigenous and mestizo laborers sustained a series of tambos, or way stations, along the roads. The trade in foodstuffs, wine, and coca along these networks provided fundamental support to the thousands of people who worked in the mines of Potosí.9

By the mid-16th century, the basic outlines of internal circulation were in place. Before it arrived at the port, silver moved from local treasuries in mining towns to royal mints usually located in larger urban centers. Transport specialists connecting smaller merchants in mining towns with more extensive merchant networks could profit greatly during this step. In 17th-century México, one hauling contractor owned ten enslaved individuals, thirty carts, forty horses, and a thousand mules.10 In theory, private silver owners would take the bullion to the mint and, after paying taxes and minting rights, receive their coined silver back. However, turnover times between delivering the silver to the mint and receiving currency could be very long, sometimes upward of several months. Therefore, miners and other private owners often sold their silver to merchants who had large quantities of currency available. Raw silver bullion (plata en pasta) sold at a lower price, since the costs of the royal fifth, refining, assaying, and seigniorage (not to mention freight and insurance) had to be covered by the buyer.11

The transoceanic shipping system that would be the backbone of the Spanish Atlantic empire for two centuries also took shape during the second half of the 16th century. After the 1560s, the Castilian Crown, following the designs of Admiral Pedro Menéndez de Avilés, created a system of biannual convoys and armed fleets to travel between Spain and the Caribbean. The Carrera de Indias, or Indies Run, integrated then-available knowledge of Atlantic wind patterns, underwater currents, and storm seasonality within a defense, trade, and communications system. Private merchantmen going to the Americas received protection by traveling in numbers, escorted by armed galleons. To reduce the times between departures and to curb unauthorized trade, the fleets only docked in a few authorized ports in the Caribbean. Permitting trade fairs in only a few ports had the additional advantage, from the point of view of peninsular Spanish merchants, of keeping European goods’ prices in the Americas high.12 Private and governmental letters, as well as thousands of folios of administrative paperwork, traveled in both directions. These were the basic outlines of a system designed to keep silver moving out of the Americas.

When the convoys’ ships arrived at a port, merchants scrambled to close their deals as quickly as possible. After the fairs ended, the ships that had come with European goods departed for Spain loaded with American bullion. Only a fraction of the silver sent to Spain on board the ships belonged to the Crown; most remittances, about two-thirds, belonged to private merchants. Merchants in ports on both sides of the Atlantic relied on manuals and tables for assessing the value of silver of variable quality according to fixed standards. In the preface to a printed set of such tables, a Peruvian merchant says that seeing “six or seven million” pesos in silver bars left even the most experienced merchants second-guessing their calculations.13 People on their way to Spain received commissions from their families or other members of their extended networks to buy products to sell in the Americas, as well as consumption goods (like books, furniture, or clothing) to bring back with them. They were also charged with carrying money to people’s families and donations to religious institutions in their towns of origin.14

Demand for silver objects existed on both sides of the Atlantic. The most important internal consumers of silver artifacts in the Americas were religious institutions and elite consumers. Churches and monasteries used crucifixes, chalices, reliquaries, monstrances, and other ornaments. Members of colonial elites purchased jewelry and other silver items like lamps, candlesticks, tableware, horse tack, and belt and shoe buckles.15 Plata labrada, or worked silver, was often consumed locally, but large numbers of silver objects traveled to Spain. Although there were limits to the quantities of silver that passengers could carry onto the ships, these limits slowly crept upward over the centuries.16

The Spanish monarchy taxed all products transported in the convoys, including silver in all its forms. A vast bureaucracy developed to keep track of all the silver crossing the ocean. Shipmasters registered all items embarked on ships at the port of departure, including who sent what to whom, the value of the merchandise, and, in the case of bullion, its value, form, weight, and fineness. The maestres de plata, or “masters of silver,” were key to this transportation process. Unlike shipmasters and other maestres on the ship, the master of silver did not usually have any additional authority on board beyond registering royal and private silver remittances. These officials carefully recorded the numbers marked on each silver bar and added descriptions of other silver objects (like jewelry or silverware) on board. Upon arrival in Seville, House of Trade officials would compare the written register to the cargo on board the ship to ascertain whether the silver imported had been appropriately taxed.17

Despite these attempts at control, large quantities of silver sailed across the Atlantic without entering the official tax rolls of the masters. Unmarked ingots and lumps (piñas) were smuggled in and out of the ships with the collaboration of various officers in port and on board the vessels. Sailors and shipmasters themselves would hide small pieces of silver in every nook and cranny in the ships.18 Usually, officials could only assess the divergence between the official register and the actual amount of silver on board a ship when a vessel sank or ran aground, and even then only so long as they could inspect the wreck before the silver was smuggled out.

Financial Effects of Silver Circulation in Europe

The large amounts of silver that arrived in Spain in the late 16th century had far-reaching effects on the European economy. Poet Francisco de Quevedo’s famous words about how money was born in the Indies, died in Spain, and was buried in Genoa only captured one part of the complex system that sustained silver production and transportation. American silver did not stop in Genoa: it flowed into North Africa, through the Ottoman, Safavid, and Mughal empires, and ended in China. (Despite the existence of Pacific routes to Asia, most of the American silver, two-thirds in all, traveled to the Old World across the Atlantic.)19

Between 1585 and 1600, over half of all American metal remittances and close to 85 percent of all the coins in Spain came out of the Seville mint.20 The sheer amount of bullion impressed contemporary witnesses. In 1587, Alonso de Morgado wrote about the sight of something “admirable” and “not seen in any other port” in the world but Seville: several carts, each pulled by four oxen, bringing American silver and gold bars from the Guadalquivir river to the House of Trade. Morgado also described how, on the steps of the House, merchants bought and sold “expensive clothes, rich tapestries, and very many slaves,” as well as gold and silver objects. In a nearby street, where silversmiths had their stores, was the Bank of Seville, where “an infinite amount” of silver coins were weighed every day.21 After the House of Trade, the American bullion went to the mint. German traveler Jakob Quelviz (known to the Spanish as Diego Cuelbis) described the Seville mint as “the best in the world,” “the one that mints the most money,” and a place from which “mule trains, loaded with gold and silver coins, depart continuously, as if [the coins] were any other commodities.”22 When Morgado and Quelviz wrote their accounts, the mint had become the largest center of physical money production in Europe.

Once silver shipments arrived in Seville, they entered an expanding network of transactions that, in turn, financed a further expansion of credit in Spain and the Atlantic. Crucial to this expansion were specialized merchants called compradores de oro y plata, “gold and silver buyers.” Since not all the bullion and coins arrived in Seville with the same fineness, American coins were usually melted and struck again. Gold and silver buyers purchased American silver at auctions and later delivered silver of a standardized fineness to the Seville mint. This intermediary operation was very profitable for the silver buyers.23 The liquidity of this wealth also allowed buyers to become lenders and finance shipping operations in Spain.24 Shipowners, shipmasters, and merchants made use of credit instruments to finance their voyages to the Indies. Shipmasters often used their ships as collateral to borrow the money necessary to provision and fit them for transatlantic travel. As proven by the study of credit documents, moneylenders expected shipmasters to pay their debts in precious metals upon returning to Spain.25 Over time, some gold and silver buyers also invested directly in shipping ventures, opening themselves to new risks and the possibility of bankruptcy.

These credit networks expanded during the 16th century because colonial officials, viceroys, clerics, sailors, and passengers who were about to embark for the Indies needed credit to pay for their travels. Additionally, passengers often borrowed money to buy European goods to sell in the New World, despite limits on and prohibitions against such practices. Most of the lenders were wealthy merchants and agents of Italian banks. However, there is evidence that royal officials, sailors, tailors, and silversmiths could occasionally act as creditors.26

By the late 16th century, the need for liquidity had led the Castilian Crown to confiscate private remittances on several occasions and deliver long-term bonds to silver owners. This measure, unsurprisingly, was not popular among merchants and businessmen and over time led growing amounts of silver to arrive undeclared or “out of registry.” The Crown did not necessarily use silver shipments to finance military operations directly. Instead, Spanish kings used the silver remittances expected for the coming year to guarantee the loans negotiated with foreign bankers (mostly Genoese at the turn of the 17th century). In return, the bankers would lend the monarchs the money they needed for their military operations in Europe, including the gold that the Spanish needed to pay their troops in the Low Countries.27 Through this mechanism, Genoese bankers secured the possession of high-purity silver and, simultaneously, profited from the exchange rate or premio they charged the Spanish. By the beginning of the 17th century, American silver could circulate from Seville to Barcelona, whence it would sail to Genoa, without truly entering the Spanish economy.

European markets siphoned New World silver out of Spain in other ways. The first boom in American silver took place roughly around the same time that silver production in European mines declined. Thus, New World silver entered Europe when the demand for precious metals was already high.28 Since the Spanish domestic economy could not supply many manufactured products and raw materials needed in the Americas, northern European markets soon filled that void. Sometimes, silver did not even make it into mainland Spain: bullion was often smuggled out of ships near the Azores, the Canaries, or the Bay of Cadiz. Other European states used American silver for their currencies. During the 1560s, most of the silver melted in English mints came from Spanish coins. Furthermore, chemical analyses of early modern coins have confirmed that about half of all silver coins struck between 1570 and 1640 in Spain, Italy, France, the Netherlands, and England came from the Potosí mines.29

By the end of the 16th century, three fundamental features of silver circulation had become clearly established. Firstly, the physical transportation of bullion required many people and vast resources devoted to logistical tasks. Moving metals from mine to port and loading and unloading precious metals onto and off of ships was only possible thanks to the labor of thousands of people and the use of tens of thousands of pack animals. Secondly, silver, like other precious metals, functioned both as money and as a commodity. Silver circulated as peso coins and heavy ingots. Precious metals also flowed, illegally and at various prices, in the form of bars, piñas, and small pieces. Thousands of silver objects such as tableware, candlesticks, monstrances, and reliquaries also crossed the Atlantic for purposes of luxury consumption and religious use. At various points in the circulation chain, these artifacts, including the coins, were melted, valued for their weight, and recast as something else. Finally, silver circulated quickly, and it traveled far. Although bullion stimulated both local colonial economies and the imperial state, merchant networks and other European states funneled silver out of the Spanish Atlantic.

Crisis, Decline, and the Long Road to Recovery, 1620–1695

Atlantic transportation of silver peaked in the last decades of the 16th century. Registered bullion imports to Spain reached a high point in the 1580s, while the Potosí mines hit their highest production levels in 1592.30 After the 1620s, however, bullion remittances declined, as did silver mining in the Americas as a whole. For several decades, researchers assumed that the reduction in remittances was an immediate reflection of a broader decay of Spanish power, linked to the concept of a “general crisis” of the 17th century. In the 1980s and 1990s, the consensus view shifted toward interpreting the decreasing amounts of bullion in shipping registries as a sign of the decline of the Spanish state’s fiscal capacity and an increase in illegal silver exports.31 This means that while the legal registries of silver unquestionably diminished, large amounts of silver left the Spanish Americas through circuits beyond Spanish control. Furthermore, production crises in mining regions, although real, were localized and not as prolonged as initially thought.

Silver smuggling seems to have increased during the 17th century. It is impossible to calculate the exact amount of silver smuggled out-of-register in the convoys. However, indirect evidence shows that the ships carried less registered silver over time. In 1555, inspectors found that a vessel registered with 150,000 reales on board had carried precisely double that amount. In 1642, the fleet’s vice-flagship ran aground in the Guadalquivir river; a lengthy inquiry by House of Trade officials revealed that the ship carried at least twice as much silver as had been registered in the books. The wreck of the Maravillas in 1657 revealed a similar situation. By 1704, royal officials estimated that the treasure declared in the New Spain fleet was only a tenth of what was actually on board.32 In 1634, the smuggling of silver had become intolerable to the Crown, which enacted decrees establishing harsher penalties designed to discourage smuggling. These decrees had little effect, however. By 1660, the obligation to register private silver on board the fleets was considered pointless, and it was temporarily abolished.33

At the same time that more silver escaped the Spanish state’s grasp, less silver was coming out of American mines. Production crises had multiple local causes related to the depletion of rich silver deposits and diminishing returns. In Zacatecas, royal subsidies to production, most notably in the supply of mercury, ended in the 1620s. This sudden surge in production costs, combined with increased trade taxes (alcabalas), rendered many mining operations unprofitable. As a result, silver production in New Spain decreased between 1635 and 1670.34 Production in the Potosí mines also declined steadily after 1620. After depleting the most productive ores in the late 16th century, miners had to excavate lower and lower levels inside the mountain, requiring costly drainage works to counteract flooding.35 Simultaneously, the forced drafts (mita) by which the Spanish had extracted Indigenous labor had been slowly replaced by wage labor, thus increasing production costs. Silver production at Potosí entered a decline that would last until the 1720s. Production of silver in New Spain, by contrast, recovered between the 1670s and 1690s thanks to newly discovered mines in the provinces of Nueva Vizcaya and Nueva Galicia.

A crisis of a different sort came as a result of the illegal manipulation of the silver content of the coins minted in Potosí. A network of officials and workers in the mint and the treasury had coordinated the addition of large quantities of copper (necessary as a binding agent) to the Potosí reales, in effect reducing their value by 25 percent. Foreign merchants had been aware of the lower metal content of the Potosí coins since the 1630s and, in some cases, rejected payments made with Peruvian coins. In the 1650s, the Spanish Crown resorted to devaluing the coins minted in Potosí and later ordered a full recall and re-stamping of the reales. These measures caused localized inflation and small riots in many cities around the Spanish empire.36 Besides the direct losses incurred, the “Great Fraud” of Potosí affected international trust in Spanish currency.37

The fraud in Potosí highlights the distinction between “good” and “bad” money, central to early modern silver flows. Although coins minted on both sides of the Atlantic were nominally equal, it had become apparent since the mid-16th century that the higher silver content of coins minted in the Americas made them more valuable than their Spanish counterparts. The difference in value became even starker in the 17th century. Starting in 1599, the Crown enacted a series of silver currency debasements by introducing coins with high copper content. These copper coins, known as vellón (billon), did not circulate in the Americas, despite some very timid attempts at their introduction. As a result, two different types of reales existed on either side of the Spanish Atlantic. While the Spanish Crown forced Spanish merchants to receive vellón coins at a loss, foreign traders had no interest in losing wealth by receiving coins minted in Spain. By smuggling silver directly out of the Americas, avoiding taxes, and bypassing legal exchange rates, merchants received about 24 percent more silver than they would if they accepted coins minted in Iberia. In 1686, one of the last monetary reforms of the century legally recognized the de facto difference between the two silver currencies by declaring the value of “old” American silver (plata vieja) to be 20 percent higher than that of the “new silver” mixed with copper.38

During this same period, foreign merchants became far more active in unauthorized direct trade, thanks in no small part to English, French, and Dutch settlements across the Caribbean. In South America, the route to take silver to Buenos Aires in exchange for European or Brazilian contraband products had become very profitable by the end of the century. Dutch and English merchants introduced enslaved Africans into Spanish ports, accepting, preferably, “good” silver in exchange. In the Spanish colonies, the price of silver varied depending on whether taxes had already been levied or not. For non-Spanish buyers, however, the only factor that mattered was purity. In 1690, a Spanish witness described how Jamaican merchants separated “good” coins from the “bad,” using the former for external commerce and the latter for local trade.39

Between 1665 and 1695, silver production recovered, in the case of New Spain, or stopped declining, in the case of Perú. During that same period, the foundations of the Spanish Atlantic trade shifted. Merchants established in México and Perú, many of them from the Basque provinces and other regions in northern Spain, used their organizational power to become less dependent on Seville’s monopoly-seeking merchants. Either through merchant guilds (consulados) or kin and place-of-origin networks, merchant families gained control of the distribution of mercury, as well as of taxing and minting processes. These networks allowed, for example, exchanges between New Spain and Perú via Pacific routes, allowing Mexican mines to receive Peruvian mercury and permitting the introduction of Asian goods to Perú.40 At the end of the 17th century, silver continued to be one of the pillars of world commerce. The recovery of the mining sector, along with new trade networks in the Americas, fostered exchanges between colonial elites and non-Spanish European merchants. The Castilian monarchy, however, had lost the privileged position at the center of the silver trade that it had possessed a century earlier.

Reform and Resurgence in the 18th Century

The Spanish 18th century began and ended with war at sea and severe interruptions to Atlantic trade. The century was nevertheless a period of generalized growth and recovery, both in the colonies and the Iberian peninsula. The population of the Americas increased thanks to two factors: the natural growth of Indigenous and mestizo peoples, on the one hand, and an increase in migration (voluntary for those coming from Spain, forced in the case of enslaved Africans) on the other. Thanks to the exploitation of new areas, new mining techniques, and policy reforms, silver production tripled and then surpassed the highest levels reached during the early 17th century. The number of royal mints increased from four in the 17th century to nine by the end of the 18th. By the end of the century, the number of local treasury offices in the Americas had reached almost a hundred.41

The Early Bourbon Period, 1700–1739

If Peruvian silver had financed Habsburg power in the early centuries of domination, Mexican silver would finance the empire’s resurgence under the Bourbons. Impressively, Spain rebuilt its maritime forces, in great part by using resources and shipyards outside Europe.42 Unlike other colonial powers, Spain could sustain growing military commitments using resources from its colonies, particularly New Spain. After 1780, however, many of those commitments would become untenable. A growing financial crisis came to a head in 1808, when Napoleon’s invasion of Spain created a political crisis that led to the independence of the American colonies.

In general, silver remittances and Atlantic traffic declined during the War of the Spanish Succession (1701–1714). The galleon San José, sunk in 1708 by an English squadron that attempted to capture it, exemplifies the dangers of Atlantic navigation during those years. The San José was one of the last of the heavy galleons that for centuries had linked both sides of the Spanish Atlantic. It was estimated to have carried an unprecedented amount of smuggled silver, including the personal fortune of the viceroy of Perú, and London gazettes reported that the sunken ship had carried “fifty million pieces of eight.” The vessel probably contained in the range of eight to ten million pesos of silver, although the exact quantities embarked will remain unknown.43

After the end of the war, both silver production and trade recovered. However, the unequal balance of trade between Spain and other European economies and the drain of silver towards northern Europe deepened. French, Dutch, and English penetration of Spanish American markets, which had been increasing since the mid-1600s, became more overt. A good example of this appears in the conditions of the English contract (asiento) for supplying enslaved Africans to American ports that was in force between 1713 and 1739. By the 1720s, it was clear that a large part of European trade, not just that of Spain, hinged on the circulation of American silver. Instead of passing through the complicated transactions of foreign agents in Cádiz, silver now flowed directly to other European powers, which used their silver holdings to trade with Asian markets. Foreign merchants saw the barriers that tried to keep them away from Atlantic trade slowly demolished. Despite opposition from their peninsular peers, American-born Spanish merchants eventually gained the privilege of establishing merchant guilds (consulados) and sending their own money to the Iberian peninsula, where they could freely invest it.44

Silver production increased considerably during the early 18th century, and Spanish fiscal revenue grew along with it. Some reforms reduced taxes and guaranteed essential supplies like mercury (and, later in the century, gunpowder), while others aimed at reforming American minting. In the 1720s, to reduce losses due to private contractors and their corrupt practices, the Crown began to run the Mexico City mint directly, which led to an increase in tax revenue after 1730.45 Instead of having private silver owners deliver their bullion at the royal mints, charging for the minting, and returning the coined silver later, the royal mints would simply purchase the bullion outright, which allowed the Crown to control the volume and quality of money in circulation. Mexican mines, which recovered from the production crises earlier than Peruvian ones, became the world’s largest silver sources after 1740. As in New Spain, a series of monetary reforms in the 1730s helped Peruvian silver production bounce back.46 In sum, the early Bourbon period laid the foundations for the recovery of Spanish fiscal-military power during the second half of the century.47

As silver production grew, new avenues for the flow of silver toward the Atlantic grew in importance. After 1740, the city of Córdoba, which connected Upper Perú with the Río de la Plata region to the south, benefitted from the increase in traffic of mules, supplies, and enslaved Africans toward Potosí. Silver flowed in the other direction, toward Brazil or Buenos Aires, where merchants exchanged it for sugar, enslaved Africans, and European goods.48 Smuggling networks between silver-producing regions and the Caribbean and English North America also accounted for large amounts of bullion leaving the Spanish Americas.

The End of the Convoys, 1739–1778

Some of the early Bourbon reforms had tried, unsuccessfully, to revitalize the Carrera de Indias and the convoy system. In 1717, after two centuries in Seville, the House of Trade relocated to Cádiz. The move legitimized a de facto situation: Cádiz had already replaced Seville as the nexus of Atlantic commerce in the second half of the 17th century. Despite the change, the attempts to resuscitate the golden age of the Carrera failed. Restricting the supply of European goods in American ports to keep prices high, a move that benefitted merchants and businessmen in the Iberian peninsula, was no longer a viable option.49 Faced with delays in fleet departures from Spain and the expansion of permanent Dutch, English, and French trade networks in the Caribbean, settlers in Spanish American ports had several incentives for smuggling and bypassing trade regulations. Even if tax revenue in the Americas increased, the routes through which silver and gold left the Spanish empire multiplied. Between 1720 and 1739, only a handful of fleets sailed to the Americas.

During the War of Jenkins’ Ear, the fleet system was suspended indefinitely, and commerce through individually licensed ships (navíos de registro) became the norm. Although the Crown attempted to restore the fleets in 1757, the system of registros led to an increase in the volume of goods transported to the Americas. The idea of the fleet system and “managed trade” eventually gave way to the policy of “free trade” (comercio libre). This policy opened all ports to unrestricted trade. Initially covering only the Caribbean, “free trade” was adopted in 1765 in Buenos Aires and the Pacific coast; finally, in 1778, it included all Spanish ports. In 1790, after almost three centuries as the institution that attempted to regulate traffic between Spain and the Americas, the House of Trade closed definitively.

Final Zenith and Decline of the Global Silver Standard, 1780–1808

In the 1760s, war at sea, exemplified particularly by the English siege and occupation of Havana in 1762–1763, disrupted Spanish Atlantic sea lanes once again. This decade also inaugurated Spain’s involvement in a series of imperial wars that gave rise to sizeable Mexican silver transfers. One of the linchpins of Spanish resurgence consisted in a system of inter-colonial tax transfers, or situados, which also accounted for a large volume of silver that did not cross the Atlantic. Situados redistributed currency from mining areas to ports and military bases of high strategic value, thus sustaining fort-building, garrison payments, and other defense expenses.50 From the late 17th century onward, it became clear that fortifications, garrisons, and other defensive measures around the Caribbean depended directly on the silver coming out of the Viceroyalty of New Spain. The extent and scale of 18th-century transfers between colonies dwarfed those of the previous century. Furthermore, Mexican silver subsidized defense activities in the Caribbean and all kinds of commercial activities in those ports.51

On the production side, New Spain entered a period of record silver production in the 1760s, based mostly on the exploitation of the Guanajuato mines. However, as the costs of exploitation increased, mining operations required more considerable sums of capital. For some silver merchant families, the growth in lending capacity transformed their businesses into institutions that closely resembled lending banks. (Most of these proto-banks, however, disappeared during the 1770s.) As the volume of bullion transfers increased, large merchant houses and guilds started to use orders of payment and bills of exchange (libranzas and letras de cambio). Some Bourbon policies enacted after the 1760s had the explicit intent of reducing miners’ subordination to the merchant class, but these new financial instruments sustained the power that big silver merchants exerted over the Mexican silver economy.52

In the 1780s, several challenges weakened the Spanish colonial system. At the beginning of that decade, a series of indigenous revolts in the Viceroyalty of Perú put pressure on the extraction and transportation of silver. In New Spain, production remained at a higher level than silver exports until the 1770s. The following decade saw a rapid increase in silver mining and exports, but not in minting. This situation had the seemingly paradoxical effect of making less silver currency available for circulation in the Americas at the same time that silver remittances reached an all-time high. As the silver hemorrhage accelerated, silver bars became less available as a means of payment. Simultaneously, small-denomination coins became scarcer, forcing many people to resort to monedas de la tierra or macuquinas (cobs) and tlacos (non-metallic coins) for their everyday transactions.53

An additional factor that affected the silver system was the sudden increase in gold production in Brazil and the New Kingdom of Granada. Although Spanish silver coins remained the dominant means of payment in international trade for most of the century, the conditions that had created a silver standard started to change in the 1730s, when South American mines began to export gold in vast quantities. The exchange rate of silver to gold, which had increased steadily for two centuries, began to decrease, causing European states to devalue their silver. Spain devalued its silver as well, but far less than France or England, thus benefitting French speculators who transported silver from Iberia. By the 1780s, French commerce depended heavily on American silver, and extensive smuggling networks had developed in Cantabrian seaports. Even French seasonal workers who traveled between Bayonne and Aragón smuggled goods on their way to Spain and took silver back to France.54 More crucially, Britain’s early adoption of a gold standard thwarted Spanish attempts to establish a bimetallic standard that privileged silver. The gold standard’s adoption and a series of British policies directly aimed at reducing the Spanish silver peso’s global purchasing power set the conditions for the end of the silver standard in the early 19th century.55

By the 1790s, Spanish military commitments had created a cycle in which growing bullion exports fed into an ever-growing debt, making the Spanish empire utterly dependent on a continued expansion of its fiscal revenue. The system was already close to its breaking point when the French Revolutionary and Napoleonic Wars disrupted the circulation of all commodities across the Atlantic. When Spain joined the French side in 1796, war at sea interrupted mercury supplies, bringing about a sharp fall in mining operations in México.56 Attempts to fill the financial gap deepened the crisis and created political resentment in the Americas. Starting in 1804, the Crown enacted a debt-consolidation policy that transferred vast quantities of currency out of the colonies, removing most of the liquid capital available there.57 In the following year, the outcome of the Battle of Trafalgar made it clear that Spain could not guarantee continued communications with its American territories.

The Napoleonic invasion of the Iberian peninsula in 1808 caused the collapse of the political and economic structures that had sustained Spanish domination of the Americas. The independence movements that emerged throughout the Spanish Americas between 1810 and 1825 brought an end to a monetary union that had lasted three centuries. War and lack of capital affected mining operations. The continent-wide circuits that had sustained the logistical networks that made mining profitable fell apart in the face of political fragmentation. The flows of Mexican silver to the Caribbean stopped, ending the policy of situados. After independence, the nascent Spanish American republics struck their own coins. However, these no longer shared the same standard weight or silver content, thus undoing the advantage that had made international traders adopt the Spanish peso for their transactions.58 Although silver-rich countries like México and Bolivia continued to export silver and produce silver coins throughout the 19th century, Atlantic silver circulation had changed forever.

Discussion of the Literature

The study of silver trade and transportation has a long and hotly debated history. Nevertheless, that history has accumulated new insights over time, and early monographs have remained influential for far longer than is the norm in other historical subfields. By its very nature, the study of silver circulation is closely related to the histories of mining, fiscal and monetary policy, and trade.

One of the first questions that historians have asked relates to the total amount of American bullion that entered the Old World. Starting in the 1920s, Earl J. Hamilton published some of the first methodologically coherent attempts at answering that question. Using records from the Archivo General de Indias and local Spanish archives, Hamilton sought to quantify the volume of silver imported into Europe in the 16th century. More importantly, Hamilton also tried to determine the effect of the influx of bullion on the “price revolution” during that century and its consequences for the rise of capitalism during the early modern period.59 Despite limitations in their analysis and almost a century of cumulative critiques, American Treasure and the Price Revolution in Spain, 1501–1650 (1934) and its follow-up, War and Prices in Spain, 1651–1800 (1947), still hold value as general introductions to the topic.60

In the late 1950s, Huguette and Pierre Chaunu attempted to estimate the total volume of Spanish Atlantic commerce for the first century and a half of the House of Trade. Based on summaries of the convoys’ registers for that period, the eight-volume Séville et l’Atlantique, 1504–1650 (1955–1960) has the merit of transcribing records for almost 19,000 ship voyages and their declared cargo for that period.61 However, some methodological errors and assumptions limit the validity of the study’s conclusions. In the late 1960s, Michel Morineau built the most robust case for a complete revision of Hamilton’s and the Chaunus’ insights about the volume of commerce and Atlantic trade cycles. His book Incroyables gazettes et fabuleux métaux: Les retours des trésors américains d’après les gazettes hollandaises (XVIe–XVIIIe siècles) (1985) marked a turning point in the discussion about the inner workings of the Spanish Atlantic. By studying gazettes and reports from the Low Countries, Morineau highlighted the limitations of Spanish archival sources and, at the same time, determined that much more silver had arrived in Europe than had appeared in Spanish ship registers.62 John TePaske’s posthumous volume A New World of Gold and Silver (2010) represents the culmination of efforts by one of the pioneers in the study of local treasury data to determine total bullion production levels. Combining the presentation of broad trends in bullion outputs with detailed analyses of the production of specific mining sites, A New World works as both an introduction and a summary of the subfield. The inclusion of mining regions other than Mexico and Perú is particularly valuable.63

The 1990s saw a blossoming of several studies about the silver trade and the Carrera de Indias, many of which remain unavailable in the English language. In Conjonctures opposées: La “crise” du XVIIe siècle en Europe et en Amérique ibérique (1992), Ruggiero Romano showed that it was no longer possible to assume a general 17th-century crisis in the Americas using the parameters of a European crisis.64 In La financiación de la carrera de Indias (1492–1824) (1992), Antonio-Miguel Bernal set out to provide a global picture of the credit instruments that sustained Atlantic trade. In the process, Bernal revisited old debates about the function of bullion exports within the Spanish economy.65 Bernal also edited Dinero, moneda y crédito en la monarquía hispánica in 2000, with contributions from dozens of leading scholars on silver circulation and trade.66 In his landmark study El crédito de la monarquía hispánica en el reinado de Felipe IV (1997), Carlos Álvarez Nogal further analyzes the use of American silver as a political tool for the expansion of Spanish debt.67

Studies of bullion exports moved from the Atlantic to the global in the 1990s and early 2000s. East Asia’s role as the final destination of Spanish American silver became central to several research programs during those decades. Working within the world systems theoretical framework, Andre Gunder Frank made a convincing case in ReORIENT: Global Economy in the Asian Age (1994) for studying global trade circuits as a unified system and, simultaneously, moving beyond the Atlantic as the primary unit of analysis.68 Arturo Giráldez and Dennis O. Flynn published several articles and edited volumes that underscored the interconnected nature of early modern markets.69 In these studies, Asian states and markets no longer appear as passive final stages of European-controlled silver circulation but rather as independent economic actors. Later in the decade, Alejandra Irigoin provided detailed quantitative analyses of the silver transfers of the late colonial period and published several articles on the collapse of the silver system in China and the Americas.70 From the almost exclusively monetarist focus of early researchers, silver studies have grown to encompass a wide variety of aspects, including the cultural and environmental impacts of mining operations. Since 2008, researchers from the Instituto Nacional de Antropología e Historia (Mexico) and the Universidad de León (Spain) have published several books and conference proceedings on diverse aspects of silver production, circulation, and consumption on both sides of the Atlantic.71

Primary Sources

The most important sources for studying trade between Spain and the Americas during the colonial period are kept in the Archivo Nacional de Indias, in the Contratación section. The ship registers series (registros de navíos) contains records for thousands of individual voyages, each several hundred pages long. Many of these are digitized and accessible through PARES, the Portal de Archivos Españoles website. These registers are summarized in six books in the series Libros de registros de navíos. The series Compradores de oro y plata contains records of the gold and silver buyer transactions between 1505 and 1714. Fiscal information appears in the Contaduría section, which includes detailed accounts for colonial treasury houses.

Aided by the proliferation of computers and an all-time high level of interest in economic and quantitative history, several classic studies of mining and the Spanish American financial structure appeared during the 1970s and 1980s. These studies revealed that the volume of silver transported to Spain differed, in some cases substantially, from the volume of silver produced and minted in the Americas. The collaborative efforts of John TePaske and Herbert S. Klein (plus various research partners) resulted in the four-volume The Royal Treasuries of the Spanish Empire in America (1982–1990) and Ingresos y egresos de la real hacienda de Nueva España (1986). These studies, compiling three centuries of income-expenditure summaries (cartas cuenta) for several royal treasury offices across the Spanish Americas, remain some of the most influential in Latin American economic history.72 Areas like the New Kingdom of Granada and the Caribbean, however, are absent from these books. TePaske’s A New World of Gold and Silver (2010) provides a comprehensive picture of mining data but does not do the same for bullion exports.73

Many printed sources from the period have been digitized. Works that include information on metallurgy and silverwork are Juan Arfe Villafañe, Quilatador de la plata oro y piedras (1572); José García Caballero, Theorica y practica de la arte de ensayar oro y plata (1713); and Bernardo Muñoz de Amador, Arte de ensayar oro y plata (1755).74 The Labyrintho de comercio terrestre y naual (1617) by Juan Hevia Bolaños and the Norte de la Contratación de las Indias Occidentales (1672) by José de Veitia Linage are fundamental for an understanding of trade regulations and customs during the 17th century.75 Finally, examples of tables for calculations of operations with silver of varying fineness are Pedro de Saldias, Tablas para la reducion de barras de plata de todas lleyes a marauedis, pesos ensayados y de a ocho reales (1637) and Francisco de Fagoaga, Tablas de las cuentas del valor liquido de la plata del diezmo, y del intrinseco, y natural de la que se llama quintada (1729).76

Links to Digital Materials

Further Reading

  • Álvarez Nogal, Carlos. El crédito de la monarquía hispánica en el reinado de Felipe IV. Valladolid, Spain: Junta de Castilla y León, 1997.
  • Assadourian, Carlos Sempat. “La organización económica espacial del sistema colonial.” In El sistema de la economía colonial. Edited by Carlos Sempat Assadourian, 277–321. Lima, Peru: Instituto de Estudios Peruanos, 1982.
  • Assadourian, Carlos Sempat. “La producción de la mercancía dinero en la formación del mercado interno colonial.” Economía 1, no. 2 (August 1978): 9–56.
  • Bakewell, Peter John. Silver and Entrepreneurship in Seventeenth-Century Potosí: The Life and Times of Antonio López de Quiroga. Albuquerque: University of New Mexico Press, 1988.
  • Bernal, Antonio-Miguel. La financiación de la carrera de Indias (1492–1824): Dinero y crédito en el comercio colonial español con América. Seville, Spain: Fundación El Monte, 1992.
  • Brading, David A. Miners and Merchants in Bourbon Mexico, 1763–1810. Cambridge, UK: Cambridge University Press, 1971.
  • Cipolla, Carlo M. Conquistadores, pirati, mercatanti: La saga dell’argento spagnuolo. Bologna, Italy: Il Mulino, 1996. Translated into Spanish as Carlo M. Cipolla, La odisea de la plata española: Conquistadores, piratas y mercaderes (Barcelona: Crítica, 1999).
  • Donoso Anes, Rafael. El mercado de oro y plata de Sevilla en la segunda mitad del siglo XVI: Una investigación histórico-contable a través de los libros de cuentas de la Casa de la Contratación. Seville, Spain: Ayuntamiento, 1992.
  • Flynn, Dennis Owen, and Arturo Giráldez. “Cycles of Silver: Global Economic Unity through the Mid-Eighteenth Century.” Journal of World History 13, no. 2 (2002): 391–427.
  • Garner, Richard L. “Long-Term Silver Mining Trends in Spanish America: A Comparative Analysis of Peru and Mexico.” The American Historical Review 93, no. 4 (October 1988): 898–935.
  • Hoberman, Louisa Schell. Mexico’s Merchant Elite, 1590–1660: Silver, State, and Society. Durham, NC: Duke University Press, 1991.
  • Klein, Herber S., and Sergio T. Serrano Hernández. “Was There a 17th Century Crisis in Spanish America?” Revista de Historia Económica / Journal of Iberian and Latin American Economic History 37, no. 1 (March 2019): 43–80.
  • Lacueva Muñoz, Jaime J. La plata del rey y sus vasallos: Minería y metalurgia en México (siglos XVI y XVII). Seville, Spain: CSIC, Escuela de Estudios Hispanoamericanos, Universidad de Sevilla, Diputación Provincial de Sevilla, 2010.
  • Lane, Kris. Potosi: The Silver City That Changed the World. Berkeley: University of California Press, 2019.
  • Marchena Fernández, Juan. “¿Comerciantes o especuladores de metal? Las elites mercantiles de Cartagena de Indias a principios y finales del periodo colonial.” Memorias 1, no. 10 (2010): 32–90.
  • Marichal, Carlos. “The Spanish-American Silver Peso: Export Commodity and Global Money of the Ancien Regime, 1550–1800.” In From Silver to Cocaine: Latin American Commodity Chains and the Building of the World Economy, 1500–2000. Edited by Steven Topik, Carlos Marichal, and Zephyr L. Frank, 25–52. Durham, NC: Duke University Press, 2006.
  • Marichal, Carlos. Bankruptcy of Empire: Mexican Silver and the Wars between Spain, Britain, and France, 1760–1810. New York: Cambridge University Press, 2007.
  • Morineau, Michel. Incroyables gazettes et fabuleux métaux: Les retours des trésors américains d’après les gazettes hollandaises (XVIe-XVIIIe siècles). London: Cambridge University Press, 1985.
  • Pieper, Renate, Claudia de Lozanne Jefferies, and Markus Denzel, eds. Mining, Money and Markets in the Early Modern Atlantic: Digital Approaches and New Perspectives. Cham, Switzerland: Springer International Publishing, 2019.
  • Romano, Ruggiero. Conjonctures opposées: La “crise” du XVIIe siècle en Europe et en Amérique ibérique. Geneva: DROZ, 1992. Translated into Spanish as Ruggiero Romano, Coyunturas opuestas: La crisis del siglo XVII en Europa e Hispanoamérica (Mexico City: Colegio de México, 1993).
  • Romano, Ruggiero. Moneda, seudomonedas y circulación monetaria en las economías de México. Mexico City: Colegio de México, 1998.
  • Sánchez, Rafael Torres. Constructing a Fiscal-Military State in Eighteenth-Century Spain. London: Palgrave Macmillan, 2015.
  • Stein, Stanley J., and Barbara H. Stein, Silver, Trade, and War: Spain and America in the Making of Early Modern Europe. Baltimore: Johns Hopkins University Press, 2000.
  • TePaske, John Jay. A New World of Gold and Silver. Edited by Kendall W. Brown. Leiden, The Netherlands, and Boston: Brill, 2010.
  • Tutino, John. Mexico City, 1808: Power, Sovereignty and Silver in an Age of War and Revolution. Albuquerque: University of New Mexico Press, 2018.