Silver Trade and Transportation in the Spanish Atlantic

Abstract

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.