Where was an enormously rich silver deposit discovered in the sixteenth century?
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The Chinese who left their ships to settle in Manila often set up shop as traders. Many of the Chinese merchants in Manila took residence in an area adjacent to the Intramuros – a walled city hosting most of the Spanish colonial and administrative buildings. Known as Parián, this area quickly became the commercial centre of Manila. There were over a hundred shops prospering, and it was here that products arriving by junk from China were traded. Chinese who converted to Christianity (called sangleyes by the Spanish) were able to expand their business interests to other provinces in the Philippine islands Show
Growth of Manila’s Chinese populationOver the years Manila’s population became one of the most diverse in the world, with people settling there from Spain, France, England, Italy, Flanders, Germany, Denmark, Sweden, Poland, Russia, Turkey, Greece, Persia, Africa, as well as Tartars, Chinese, Japanese and others from across Asia Acapulco and Mexico CityNew Spain, especially Acapulco and Mexico City, began to depend on the China Ships for the open trade route. When galleons arrived in Acapulco they were greeted with much festive activity. There were joyful celebrations starting with Mass and followed with parties and market fairs The first global currencyManila became the central hub for trade routes linking Asia to the rest of the world, stimulating rapid international economic growth. China’s acceptance of silver in exchange for commodities such as tea, silks and ceramics would eventually result in the Spanish dollar – silver minted coins – evolving into the world’s first common currency At first the Chinese insisted on trading with bullion and would not accept payment for their goods in foreign currencies. It wasn’t until later that they started using the monetary unit of the Real of Eight Pieces of EightIn 1728 new laws and regulations standardised the coinage of the Real de a Ocho, also known as the Eight Royals Coin or Pieces of Eight, as well as the Spanish dollar. The weight was reduced and the quality improved, making the dollar ideal as a common currency. One of the improvements was the addition of a striated pattern around the edge of the coin. Any chipping, a common practice at the time, was easy to identify and the coins became harder to forge \( \newcommand{\vecs}[1]{\overset { \scriptstyle \rightharpoonup} {\mathbf{#1}} } \) \( \newcommand{\vecd}[1]{\overset{-\!-\!\rightharpoonup}{\vphantom{a}\smash {#1}}} \)\(\newcommand{\id}{\mathrm{id}}\) \( \newcommand{\Span}{\mathrm{span}}\) \( \newcommand{\kernel}{\mathrm{null}\,}\) \( \newcommand{\range}{\mathrm{range}\,}\) \( \newcommand{\RealPart}{\mathrm{Re}}\) \( \newcommand{\ImaginaryPart}{\mathrm{Im}}\) \( \newcommand{\Argument}{\mathrm{Arg}}\) \( \newcommand{\norm}[1]{\| #1 \|}\) \( \newcommand{\inner}[2]{\langle #1, #2 \rangle}\) \( \newcommand{\Span}{\mathrm{span}}\) \(\newcommand{\id}{\mathrm{id}}\) \( \newcommand{\Span}{\mathrm{span}}\) \( \newcommand{\kernel}{\mathrm{null}\,}\) \( \newcommand{\range}{\mathrm{range}\,}\) \( \newcommand{\RealPart}{\mathrm{Re}}\) \( \newcommand{\ImaginaryPart}{\mathrm{Im}}\) \( \newcommand{\Argument}{\mathrm{Arg}}\) \( \newcommand{\norm}[1]{\| #1 \|}\) \( \newcommand{\inner}[2]{\langle #1, #2 \rangle}\) \( \newcommand{\Span}{\mathrm{span}}\)\(\newcommand{\AA}{\unicode[.8,0]{x212B}}\) No headersThe Spanish discovered huge sources of wealth in South and Central America. The most important source of wealth in all of the Americas for the Spanish crown was discovered in 1545: the mountain of Potosi in present-day Bolivia. Potosi had the most enormous silver deposits in the world at the time, producing thousands of tons of silver for the crown. It also represented a horrible site of slave labor for the native peoples of the entire extended area, in which the Spanish forced them to toil in atrocious conditions, often until they died from exhaustion. Whereas the Great Dying might be the most iconic aspect of the Columbian Exchange, Potosi is probably the greatest symbol of the humongous influx of mineral wealth that flooded into Spanish coffers for over a century, as well as the site of the greatest human misery caused by that lust for bullion. The irony of the wealth generated by American mines is that it undermined the vitality of the Spanish state itself in the long run – Spain did not have to cultivate trade or pursue technological or bureaucratic innovation in the same manner as the rest of the European powers because it had such an enormous surplus of precious metals. Thus, even though Spain was the most powerful state in Europe in the sixteenth century, its longer-term trajectory was one of decline, in large part because of its commercial stagnation. In addition, so much bullion was shipped back to Europe that inflation undermined its value, another factor that weakened Spanish power over time. Much of the story of Spanish conquest is one of the abuse of the native peoples of the Americas. Part of that abuse grew out of the crusading tradition, but part of it also came out of the discomfort many of the Spanish felt in discovering people who had quite obviously never been in contact with the Christian world. The Bible did not explain their origins, so the Spanish invented various hypotheses: Native Americans were descended from the Lost Tribes of Israel described in the Old Testament of the Bible, they were somehow created and ruled by the Devil, they simply were not human beings but strange, human-like animals, and so on. The consensus by the 1530s was that, wherever they were from, Native Americans were blank slates who had to be conquered for their own good; the Pope recognized the humanity of the Indians in 1537, but the church continued to support forcible conversion. Native Americans were referred to as the “justly conquered" and either enslaved outright or conscripted as serfs in service to Spanish colonial masters. Back in Europe, funded by the incredible wealth of the New World, the still recently-united Spain became the greatest European power in the sixteenth century. In the New World, royal authority was enforced by two viceroys, royal officials who ruled over the northern and southern parts of the territory. Under them, rich nobles (often originally successful conquistadors) ran encomiendas, feudal estates with the legal right to exploit native labor. Those often evolved into the even larger haciendas, the size of whole states back in Europe. Because the vast majority of Spanish immigrants were men, even a formal ban of marriage between Spanish men and native women did not prevent the growth of a large “mixed” class of mestizos, the children of Spanish – American unions who were often recognized as the legitimate children of the former. There was still a racialized hierarchy in New World society, but more ethnic mixing occurred in Central and South America than in North America. This page titled 6.5: New World Wealth is shared under a CC BY-NC-SA 4.0 license and was authored, remixed, and/or curated by Christopher Brooks via source content that was edited to the style and standards of the LibreTexts platform; a detailed edit history is available upon request. Why did China's demand for silver rise dramatically during the sixteenth century?Why did China's demand for silver rise dramatically during the sixteenth century? Changes to the Chinese tax code required payments in silver.
Why was the discovery of American silver so important?The discovery of large amounts of American silver became incredibly important as the new global currency. In Europe, it allowed massive economic growth and allowed Europe to buy Asian imports it could not have otherwise afforded.
Why did a majority of silver end up in Spain and China?Why did a majority of silver end up in Spain and China? Silver was an important and essential in connecting countries an ocean away. It originated in Spain then made its way to Afro Eurasian countries.
What role did Europeans primarily play in the global trade of silver and in the 16th and 17th centuries?What role did Europeans primarily play in the global trade in silver in the sixteenth and seventeenth centuries? Europeans served as middlemen funneling American silver to Asia. It was the Europeans who served as middlemen transporting silver and trading it for goods produced in Asia.
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