Mines of Silver and Gold in the Americas
Peter Bakewell’s volume, number 19 in Variorum’s An Expanding World series, contains an editor’s overview, reprints of fourteen classic essays on precious metals production in the Americas, and a detailed bibliography on the subject. It would be easy—and incorrect—to presuppose that detailed information on such specific items as gold and silver production is of interest exclusively to those specializing in precious metals history. This volume, in fact, contains important information [End Page 468] on numerous aspects of early modern American history. Moreover, the book presents a unique vantage point from which to view crucial building blocks of an emerging global economy. As a companion volume in the same series explains (see the review in this issue), the bulk of American and world silver production flowed inexorably to China because that is where the white metal’s market value was highest. A protracted fiscal and monetary “silverization” of the Chinese economy was responsible for the dramatic demand-side surge that caused the price of silver in China to rise far above its price in the rest of the world during the sixteenth and early seventeenth centuries. Like any other commodity, silver gravitated to its most profitable market. Chinese silk was the main export bartered against imported silver (China also exported gold). Thus, intercontinental trade history simply cannot be understood without paying heed to demand-side forces emanating from China, the world’s preeminent silver sink. Although Asian demand-side issues are clearly not the focus of the volume under discussion here—supply-side mining is!—Bakewell’s decision to conclude Mines of Silver and Gold in the Americas with William Atwell’s “International Bullion Flows and the Chinese Economy” underscores the global context of mining history.
The most important gold and silver mining areas in the world throughout the early modern period were located in Spanish America (although Japan was a mining powerhouse, too). Bakewell’s volume provides an excellent panorama of the evolution of Spanish American mining and the history of technology, including two essays by Robert C. West on precontact and early Spanish mining practices in Peru and Mexico, but our comments will focus only on general mining trends and certain issues surrounding new technologies and labor markets. This permits us to concentrate attention on the international (indeed, global) context of American mining.
An essay by Richard L. Garner provides a broad overview of Peruvian and Mexican mining throughout the colonial period. Taking Spanish America as a whole, silver production rates tripled during the second half of the sixteenth century, dropped by a third during the seventeenth century, then tripled again during the eighteenth century. There is no doubt that Peru—really Potosí—dominated American mine production from the mid-sixteenth century through 1620. Peruvian output plummeted during the remainder of the seventeenth century, while Mexican production grew. By the last quarter of the seventeenth century, Mexico became and remained the chief silver producer in the world. Peruvian silver production, most of which by that time exited via Buenos Aires, surged in the late eighteenth century (Fisher, [End Page 469] p. 298), but Mexican silver production was vastly greater by this time, reaching the staggering annual average of 21–24 million pesos by the end of the eighteenth century (Coatsworth, p. 266). Attempts to understand the reasons for the rise of Mexican mining (and Peru’s decline) lead to broad implications for the general, multi-century evolution of Latin American society and its trading partners. The literature states that Peruvian mines played out (that is, Peruvian ore quality was poor compared with Mexican ore), while Peru suffered higher mercury prices and state taxes than did Mexico. The ore-quality argument is sound, but the latter two arguments are less convincing (high taxes and high mercury prices also prevailed during Peru’s heyday, so why did not these negative factors kill off silver production during the earlier period?).
Several essays focus on differing labor-supply systems in Mexico and Peru. In an essay on Mexican mining in the 1590s, Bakewell argues that “a surprising conclusion about the mining force also emerges: free Indian wage labourers comprised almost 70% of it [the labor force]. This finding goes far towards contradicting past assumptions that mining labour in colonial Mexico was forced labour” (p. 172). The Mexican mining industry is therefore characterized as having been different from that of Peru in that Mexico presumably faced higher labor costs (because Mexican miners had to pay free-labor wages). But was the situation so straightforward?
The Spanish government is said to have been forced into the famous mita draft-labor system in Peru because European diseases wiped out the indigenous labor pool and because the mines were concentrated in an extremely remote region; without the forced-labor mita “many mines would not have shown any profit, even after the crown cut silver taxes and mercury prices in the 18th century, and the treasury would have lost revenue” (Garner, p. 250). Yet this issue becomes more complex when Garner states on the same page that “Peru’s draft-labor system (mita) remained in effect at both Potosí and Huancavelica until the end of the colonial period, although the majority of Peru’s workers were hired rather than drafted” (emphasis added). Moreover, with “mine labor frequently in short supply, Potosían miners quickly learned how to buy, sell, lease, and swap labor despite the state’s persistent efforts to regulate and allocate the supply. Potosí’s labor market became a hybrid. It was shaped but not dominated by either coercive or the voluntary system” (Garner, p. 251).
Ann Zulawski’s article on silver mine labor between 1607 and 1720 in Oruro (Peru’s second most important mining center, behind neighboring Potosí) also paints a complex labor picture. As in the [End Page 470] Mexican case, mine owners in Oruro depended upon voluntary workers; inhabitants paid tribute to the Spanish government, but there was no forced-labor mita system, as there was in Potosí. Indian mine workers were paid twice as much as mitayos in Potosí earned, plus workers were allowed to take a piece of ore with them when they left the mines. Moreover, independent miners worked mines owned by others on the weekends, while paying Indian workers triple their normal wage before the middle of the seventeenth century. According to Garner (p. 256), periodic “labor shortages and the absence of a large-scale, state-run labor system notwithstanding, wages for Mexican men and refinery workers do not appear to have been as high as or higher than wages for voluntary labourers in Peru.”
Many essays focus to a greater or lesser extent upon implementation of the revolutionary mercury-amalgam mining process in Spanish America. Alan Probert’s essay deals with Bartolomé de Medina’s introduction of mercury-amalgam technology in Mexico, where it was developed on an industrial scale by the 1550s, while Bakewell’s article covers Francisco de Toledo’s wildly successful implementation of amalgam technology at Potosí in the 1570s. These important cost-reducing innovations yielded immense profits for crown and private entrepreneurs alike, of course, but the ensuing explosion of mine output slowly depressed silver’s world price again, and thus mine profits. After the reforms of Viceroy Toledo, technological innovation again came to the rescue when construction of a series of expensive reservoirs above Potosí—to drive water mills throughout the dry winter and spring seasons—lowered mining costs. Peruvian silver production accordingly reached its zenith in the 1590s.
Given the importance of mercury-amalgam technology, maintenance of reliable supplies of mercury was crucial to silver mining, the financial backbone of both Spanish America’s economy and imperial Spain’s global hegemonic ambitions. In principle, European mines in Almadén and Idria were to satisfy the mercury requirements of Mexico, while Peru’s Huancavelica was to satisfy South American needs. In reality, the crown diverted European mercury from Mexico to Peru up to the 1660s, a peculiar trend during a time of declining Peruvian silver output and rising production in Mexico. In the late seventeenth century the government even authorized the shipment of mercury from Peru to Mexico, “although only a few thousand quintales of Peruvian mercury were actually delivered” (Garner, p. 246). During the mining boom of the eighteenth century, “Almaden (and Idria) became the chief source of mercury for both Mexico and Peru” (Garner, p. 248), as Huancavelica could supply less than half of the Andean [End Page 471] requirements. Again, a point worth emphasizing is that a crucial mining input (mercury) was transported internationally throughout the early modern period.
The Bakewell volume offers direct and indirect evidence of significant market influences on the American mining industry, even in areas heavily committed to forced-labor systems. We have focused on two general market forces. First, new technologies continually battled a falling world price of silver (at least up to 1640 and again through the eighteenth century); essays by John Coatsworth (pp. 263–282) and D. A. Brading (pp. 303–19) are the volume’s strongest in emphasizing how mine profits were squeezed between rising production costs and a falling market value of silver (although no one in the literature seems to recognize the crucial role of China’s dramatic expansion of demand for silver during the eighteenth century). When the price of silver descended toward its cost of production, miners always scrambled to reduce costs in one way or another. New technologies sometimes did the trick. Sometimes the crown stimulated output by reducing mercury prices or taxes; modern-sounding proposals to increase total government revenues by reducing tax rates were familiar in Habsburg Spain. Second, the government had no choice but to recognize market realities with respect to labor markets, even among draft laborers working under the mita system. Enrique Tandeter tells of Indians voting with their feet, which caused a “continuous emigration of the tax-paying Indians (tributarios) from the villages which were compelled to carry out the tasks of the mita towards other villages which were exempt from this obligation” (p. 135). He refers to “records... full of references to flights and absenteeism which suggests that in fact it was not difficult to leave the production unit, or even the city” (p. 158). Tandeter also writes of the practice known as “kajcheo,” “based on the free access to the mines during the weekends in order to collect ores without any control . . . [which] originated at the end of the seventeenth century as a means of attracting free labor to the mines of Potosí.” Indian pick-men leaders reserved particularly rich veins discovered earlier for their own versions of weekend entrepreneurship: “the ores processed in the [primitive] trapiches contained ten times more pure silver than those refined in the larger works” (p. 168). The point is that although Spaniards indeed exploited indigenous workers as much as possible, marketplace realities forced miners to grant more or fewer concessions to indigenous laborers, depending upon conditions at a particular time. A clear free-labor versus forced-labor dichotomy does not correspond to reality. [End Page 472]
A. J. R. Russell-Woods’s “Colonial Brazil: The Gold Cycle, c. 1690–1750” is the only essay in the volume to concentrate on gold. Less is always known about gold production than about silver because, unlike silver, gold deposits are widely dispersed. This lack of geographical concentration renders government control exceedingly difficult, which is why gold smuggling was rampant in Brazil. Mine-driven demand for African slave labor was so strong that the numbers of slaves increased from zero to thirty thousand during the first half of the eighteenth century in Minas Gerais (p. 344). Despite the unreliability of gold production estimates, “ships returned to Brazil from west Africa loaded with European merchandise simply because the purchase of slave cargo alone could not provide an outlet for the large amount of gold exported from Brazil” (p. 366).
Bakewell’s Mines of Silver and Gold in the Americas is a treasure trove of information about mining specifics, but also teaches us a lot about the social and economic foundation of Spanish American society. When viewed against the backdrop of the global market for silver and gold—with particular attention paid to giant demand-side China —this volume plays a vital role in elucidating the cause and consequences of the emergence of global trade. The modern world would differ significantly from the one in which we live, had the mines discussed at length in this important volume not existed. Attempts to understand world history without reference to the material contained in this volume are bound to be incomplete. It is a “must buy” for every academic library in the world.