The Spanish Conquest of the New World

        The Spanish conquest of the New World led to the discovery and massive production of silver between the mid sixteenth century to early eighteenth century. Japan's silver production followed soon after. Together, their silver production had a big impact on the world. The sudden increase of silver changed China's economy and social structure, damaged Spain's economy, as well as affected outside countries that took part of the trade.

        When Spain discovered the abundance of silver in mines in their South American colonies, they excavated as much as they could and traded all they could for it. The majority was traded for Chinese goods creating a huge influx of silver into Chinese economy. The gigantic amount of incoming silver changed the Chinese economy and created social divisions, which can be seen in documents 1,3, 5, and 7. In document 7, written by He Qiaoyuan, a Ming dynasty court official, it is shown that Chinese goods can be sold for double to triple the actual price in places outside of China. He also says that foreigners desire his province's goods, such as pottery, sugar, and fruit. This may not be necessarily true due to it being a persuasive report to the emperor to try to get him to repeal the ban on foreign trade. Nevertheless, goods being sold for more silver than what they are worth is an example of the abundance of silver entering China and its economic consequences shown later on. Document 1 is issued from a Chinese government official, Ye Chunji, shortly after the Chinese government required all domestic taxes and trade fees be paid in silver. The official is urging people to limit their wedding expenses, portraying them as extravagant, and to use their silver to pay taxes to the government instead. Since Ye Chunji is a government official, of course he would want the people to pay their taxes over other things so he can earn more money. He uses his authoritative position to place a positive light on those who save their silver, rather on those who spend it. Silver has caused the Chinese government to change their monetary system and prioritize silver first. Document 3 is a government report from Wang Xijue, explaining how prices can be so low despite poor harvests. The huge amount of silver collected by the government has caused silver to be scarce among the people, leaving no means of buying tools or hiring laborers, causing some farmers to go out of business. Again, the negative effects of silver on the Chinese economy is shown. The social structure has changed as well, farmers cannot make enough money to supply for their family, tipping the social balance. Document 5 is from a Chinese writer, Xu Dunqiu Ming, about 30 years after China changed its tax policy. It shows the change from a bartering system to a banking system. The lower classes are suffering because they cannot buy the products that they need with the silver that they don't have. No longer able to trade, they must borrow silver from a money-lender, creating debt. The creditors now has control over the debtors and it creates new roles in China's social structure. The Chinese's new silver tax policy in response to the influx of silver has caused negative economic impacts on the whole country.

        The economic impact of the silver trade on Spain can be seen in documents 2 and 6. In document 2, Tomas de Mercado is a Spanish scholar writing about the impact of the global silver trade on their economy. Almost all of their silver went out to expensive Asian goods, meaning very little went to other countries besides China. As a scholar, he is concerned with China being their only customer and this a sign that the Spanish economy is falling. Spain cannot produce enough for other countries. Saying that the streets of Manila could be paved with Chinese cobblestones is used to make the point that Spain is exporting a tremendous amount of silver to China in order to get that many cobblestones. Document 6, is also from a Spaniard about the mining of silver. Antonio Vazquez prides in the huge wealth that Spain has achieved from the 326,000,000 silver coins that have been exported, not including the silver that was taken secretly. The mining was the result of strenuous and painful Native American labor as described by Vazquez. Quite surprisingly however, Vazquez sympathizes with the workers and calls them "poor fellows" that work in "so trying and distressing" conditions. Vazquez is proud of the wealth but sympathizes with the laborers' poor working conditions. Although Spain does become wealthy, they were only able to achieve it by exploiting the Native Americans but in the end they mishandle their silver and damage their economy by sending all of their silver to China.