Tag Archives: Spain

The Saga of Spanish Silver: an Austrian Perspective – Part 4: Aftershock

Part 1, Part 2 and Part 3

Given the large amount of silver available in the late XVI centuries, other high content silver coins started appearing in Europe, chief among which were the Dutch leeuwendaalers and rijskdaalers. These coins had a lower nominal silver content than Spanish dollars (.885 vs .909 for the Mexican coins and .916 for the Peruvian coins) but had one big advantage over their competitors: the silver content was stable.

The big issue is, despite her well developed minting industry, the Spanish Kingdom had serious issues (or no desire) producing coins of consistent purity. This issue has never been properly addressed: mints in Saxony and Italy had absolutely no problem striking consistent coins in the XV century already. Spanish authorities were obviously powerless (or unwilling) to deal with the issue: between 1630 and 1650 the Potosì mint produced an unknown number (running in the hundreds of thousands of pieces of eight) of coins with a silver purity under .400 instead of the prescribed .916. Despite being warned many times by both the Crown assayers in Cadiz and the Genoese bankers, the Spanish government intervened only in 1650. Both the governor of the Potosì mint and the chief assayer were put to trial in Spain, sentenced to death and brutally executed, yet there were many who felt these two men were either scapegoats or just accomplices in a larger counterfeiting scheme.
Again in 1664 the chief assayer in Genoa sent a letter to both his superiors and the Spanish Crown complaining that a recent shipment of pieces of eight struck in Sevilla had a much inferior silver content than prescribed. This time no action followed.

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The Saga of Spanish Silver: an Austrian Perspective – Part 1, Before the Storm

Hi everybody. This is is my first blog post so let’s give a bit of an introduction here.

This is part one of a series of blog posts about the impact of the huge quantities of Spanish silver which started arriving in Europe in the second half of the XVI century. While massive price inflation is the only widely known consequences, there was so much more to it. The arrival of such a huge mass of precious metal had enormous consequences, many little known to the general public. Always remember these posts are written from an Austrian Economics prospective so many of my conclusions and comments may sound different from “mainstream” history. I’ll write a new blog post about it every fortnight (two weeks). Enjoy!

Ever since the days of the Roman Republic silver had been the main currency of Europe. Gold has always been the proverbial precious metal but, in reality, silver coinage was what people used in their everyday transactions. These ancient coins were a far cry from the modern, well minted descendants: they were invariably struck on small, very thin silver discs, often of low purity. The main Spanish currency when the first conquistadores sailed for the Americas was the Castillian real, first coined during the reign of Pedro I (1350-1369). It weighed a paltry 3,4 grams and was so thin it could be easily bent. This was due to both the scarcity of silver ore and the lack of efficient mining and refining technologies.

A bent real from the XV century

A one real coin issued by Pedro I, struck by the Seville mint

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