Incredibly, the Basque-Vicuña war had almost no effect on the flow of silver. Even as Basques and Vicuñas fought in the streets, they cooperated on mining and refining the silver, then shipping it from Potosí. The last was a huge task. One account describes how a single shipment of 7,771 bars left the city in 1549, four years after the lode’s discovery. Each bar was about 99 percent silver and weighed more than eighty pounds. All were stamped with serial numbers by the foundry and marked with the owner’s stamp, the foundry stamp, and the tax man’s stamp. By the time the assayer individually certified its purity with his stamp, the bar looked as if it had been graffiti-tagged by a demented numerologist. Each llama could carry only three or four bars. (Mules are bigger than llamas, but need more water and are less surefooted.) The shipment required more than two thousand of the beasts. They were watched by more than a thousand Indian guards who in turn were watched by squads of Spanish pistoleros.
Despite these obstacles the Americas produced a river of silver—more than 150,000 tons between the sixteenth and eighteenth centuries, according to the silver trade’s most prominent historians, Dennis O. Flynn and Arturo Giráldez of the University of the Pacific. For those centuries Spanish silver washed around the planet—it was 80 percent or more of the world’s output—overwhelming governments and financial institutions everywhere it landed. “Right at the beginning there was this shot of silver into Europe,” Flynn told me over the course of a long conversation. “We can’t be sure about the numbers, but the amount of silver in Europe may have doubled.”
The Spanish silver peso became a universal currency, linking European nations much as the euro does today. (It was called, famously, a “piece of eight,” because it was worth eight reales—reales were then the basic Spanish coin.) Pesos were the main currency in the Portuguese, Dutch, and British empires and widely used in France and the German states. “Because silver was the money supply,” Flynn said, “there was an uncontrolled jump—an explosion, really—in the money supply across Europe.” Flynn was trained as an economist. “Rapid, unplanned shocks to the money supply are generally a bad idea,” he said. Inflation and financial instability were the result.
After sixty years of frenzied production, Flynn and Giráldez wrote, the world had accumulated so much silver that its value began to fall. A million pesos in 1640 was worth about a third of what a million pesos had been worth in 1540. The impact was multifarious and planet-wide. As the price slid, so did the profits from silver mining—the mining that was the financial backbone of the Spanish empire. Spain did not adjust its tax rates for currency fluctuations (in modern terms, they weren’t indexed to inflation). The king collected the same amount of taxes in silver as he had before, but its value plunged, throwing the government into crisis. Spain’s economy turned to ash, followed by the economies of a dozen other states equally dependent on Spanish silver, one after another like a chain of firecrackers. The well-off felt beggared; the beggars felt desperate. With nothing to lose, they picked up stones from the streets and looked for targets. Ruin was followed by riot and revolution.
Much of the silver from Potosí and Mexico was transformed into “cob” coins, hammered between crudely engraved dies. This four-reale coin was made in Potosí in the 1570s, before the coins received dates. The “L” is the initial of the mint assayer. (Photo credit 4.6)
American silver was not the sole cause of the upheaval; still, threads of silver link the revolts against Spain in the Netherlands and Portugal, the ruinous Fronde civil war in France, and even the Thirty Years’ War. Flynn and Giráldez said that one of their contributions was to point out that the turbulence in Europe, though devastating, was “a kind of sideshow—most of the silver actually went to Asia.” And not just to some generalized part of Asia. A disproportionate share of the silver ended up in a single port in a single Chinese province: Yuegang, in Fujian.
“A FINE BOATLOAD OF WOODEN NOSES”
Once one of the world’s most important ports, Yuegang has become a nondescript industrial suburb. The sole remaining sign of its former prominence is a three-story, hexagonal tower that was once part of the city walls. When I visited not long ago, the gate was locked; I had to wait for a neighbor to show up with a key. Inside the tower were signs of occupation by a homeless man: grubby blankets, empty ramen packets, girlie magazines. All I could see from the top of the tower was a printing plant and a smoky trash dump and the long rectangles of spinach and tobacco fields. The docks where chroniclers had described junks “packed together like fish scales” were almost empty. Only the geography was unchanged: beyond the harbor was the Taiwan Strait, Taiwan itself, and the South China Sea.
By the mid-1580s, barely a decade into the galleon trade, Yuegang was sending twenty or more big junks to the Philippines every March, at the start of the rainy season. (Before the silver boom, just one or two small ships went there, even during the intervals when trade was legal.) As many as five hundred merchants crammed aboard each ship with every imaginable commodity: silk and porcelain, of course, but also cotton, iron, sugar, flour, chestnuts, oranges, live poultry, jam, ivory, gems, gunpowder, lacquerware, tables and chairs, cattle and horses, and whatever else the Chinese thought Europeans might want. “Some just brought little bits of stuff,” said Li Jinming, a historian at Xiamen University who is the author of a history of Yuegang. “Whatever they could get their hands on. They could sell it at a big premium.” Merchants with little capital could only obtain goods to sell by borrowing at high interest rates. “They had to leave their wives and children with the lender as security,” Li told me. “If a trader died, the family was out of luck.” Lenders took everything they had to repay the contract. If that was not enough, he said, “the wives and children would become servants. The lender could sell their labor to someone else—it was like slavery.”
Typically each ship was chartered by a wealthy trader, who rented space in the hold to the others, usually for 20 percent of the merchant’s gross sales. Belowdecks was a warren of sealed, watertight compartments, windowless and barely the size of a closet, in which traders stored their goods. Porcelain was packed tightly in cases, Li said, with rice separating the plates and bowls. “They injected water on all sides, then set down the case in a humid place. It glued the ceramics into a solid, unbreakable mass.” Theft was rare aboard ship—thieves couldn’t escape with their loot. Nonetheless, merchants brought their own food, slept atop their goods, and stayed inside their dark, noisome compartment during the entire ten-day passage to Manila.
“If they could, they went only once,” Li said. Small-scale traders tried to avoid repeat voyages—“the trip was too dangerous.” The small islands and shallow water in the harbor restricted shipping to several narrow channels, along which oceangoing vessels had to be slowly pulled by smaller boats. Wokou lurked in the fog. To draw pirates from their hiding places, merchants sent out scouts in fast, maneuverable galleys. If they spotted wokou, they could skip away with a warning. Because the scouts could not travel as far as the Philippines, the last stage of the outward journey was particularly dangerous. Dutch pirates routinely ambushed Chinese ships on the approach to Manila, seizing everything aboard.
The merchants usually docked at Cavite, a long, skinny peninsula five miles from Manila, on the south side of the great bay.6 A crowd of Chinese men—sales agents—awaited them. Cautiously the traders would disembark from their cubicles, blinking in the sun, looking for an agent from their extended family. Agents knew how much silver was in the most recent galleon and could raise or lower prices quoted to the Spaniards accordingly; they also had contacts necessary to bribe colonial inspectors. For their services they charged 20 to 30 percent of the sales price. Only after all the Yuegang traders had chosen agents would the ship be inspected by customs agents, who collected a tax—“three percent on everything to his Majesty,” as one Manila governor put it. Then the dickering would begin. Everyone had at most two months to make a deal, because the galleons began leaving in mid-June to avoid typhoon season.
Spanish buyers usually met the agents in the Parián, a Chinese ghetto that was a kind of metastasis of Yuegang, full of Fujianese washed by the silver trade to the Philippines. Located in a swamp outside Manila’s walls, the Parián was created in 1583 by Spanish officials in an attempt to control the growing number of Chinese, whom they regarded as conniving, job-stealing illegal immigrants. Initially it consisted of nothing but four big shed-like buildings Yuegang traders had built to store their goods. To encourage Manila’s Chinese residents to leave their homes and move into their warehouses, the Spaniards announced that any non-Spaniards found outside the Parián after sunset would be executed. In some sense, the quarantine was tit for tat: Europeans were not allowed to set foot in China, so Chinese were restricted from the little piece of Europe in Manila.
Denied permanent access to the European town, the Chinese built their own. Around the warehouses grew a maze of arcade-like shopping areas crammed with intensely competitive stores, teahouses, and restaurants. The narrow streets between were jammed at all hours with men in long, floppy-sleeved robes, embroidered silk shoes, and high round caps. Doctors and apothecaries hawked jars of unguents, tisanes, and medicinal roots. People were buying, selling, and making, arguing over tiny cups of Fujianese tea, racing about with piles of carefully packed bundles, eating foods that appalled the Europeans (a Yuegang favorite: chicken embryos baked inside the egg by burying the eggs in piles of salt and exposing the piles to the sun). It was the first Chinatown in the orbit of the West.
For Spain, the Parián was an oddity and a humiliation. From the beginning, when Spain ejected Muslims and Jews from its kingdom, the empire had what it thought of as a civilizing mission: universal conversion to Christianity. Manila was thronged by missionaries, heads afire with the zeal to bring the Roman Catholic church to Asia. They forced Filipino and Malay natives to adopt the cross, but this was a side project. The true goal, at least at the beginning, was to conquer and convert China. Believing that Cortés (conqueror of Mexico) and Pizarro (conqueror of Peru) had needed only small bands of committed men to seize entire empires for Christ, these clerics and soldiers initially imagined that a few thousand Spaniards could repeat these feats in China. In Manila, the Ming realm seemed so near—vast riches, spiritual and material, almost close enough to touch. Wiser counsel eventually prevailed, as Manila’s governors and the Spanish court concluded that China was too big to conquer. Indeed, the Spaniards in the colony began to worry that China might conquer them. Fearing annihilation, they allowed the Chinese an otherwise unthinkable concession: to live in their own infidel quarter, worshipping their own un-Christian idols. They even allowed it to have its own gobernadorcillo—a mini-governor.
Frightened by the crowded Chinese ghetto called the Parián, Manila’s few hundred resident Spaniards literally walled themselves off from it. To enter Manila proper, Parián residents had to walk across this moat and through a heavily guarded gate. (Photo credit 4.9)
Parián artisans and shopkeepers sold the Spaniards everything from roof tiles to marble statues of Baby Jesus—“much prettier articles than are made in Spain, and sometimes so cheap that I am ashamed to mention it,” wrote Domingo de Salazar, bishop of the Philippines. Colonists flocked to the Chinese ghetto, where stores purveyed the latest European styles. European merchants griped about the competition. The monarchy ordered the shops moved further away, but Spaniards kept coming to them, attracted by the low prices.
The trades “pursued by Spaniards have all died out,” Salazar lamented, “because people buy their clothes and shoes from the [Parián].” As a warning, he told the story of a Spanish bookbinder and his Chinese apprentice. After carefully observing the master at his work, the apprentice set up his own shop in the Parián, driving his former master out of business. “His work is so good there is no need of the Spanish tradesman.” The Chinese were not universally successful, of course. One shopkeeper sold a wooden nose to a Spaniard who had lost his in a duel. He tried to capitalize on his success by importing “a fine boatload of wooden noses.” Sales were poor.
By 1591, twenty years after Legazpi entered Manila, the Parián had several thousand inhabitants, dwarfing the official city, which had only a few hundred European colonists. For the Chinese, the arrangement was convenient. They had created a Chinese city outside of China, where the nominal presence of the Spanish authorities insulated them from the scrutiny of the Ming. To the Spaniards, the ghetto was alarming, alien, an unwelcome necessity. And it was big, especially when compared to Manila. Despite constant exhortation, Spaniards refused to settle there in any numbers. The city was too remote, too hot, and, above all, too full of disease, especially what we now know as malaria. European residents often sought cooler air by building homes in the hills around town. By bad luck, the hills are the habitat of the mosquito that is the islands’ main malaria vector. The more Europeans escaped the heat, the more they got sick.
The only reason Manila attracted any Europeans at all was because it represented an extraordinary opportunity: China would pay twice as much for Spanish silver as the rest of the world. And its merchants were willing to sell silk and porcelain amazingly cheaply. “The prices of everything are so moderate, it’s almost for free,” one Spaniard had crowed when the Chinese first arrived in Manila. Yet somehow the deals rarely were as lucrative as the newcomers wanted. To their dismay, the Chinese were always able to play them off against each other, bargaining them down time after time. Sitting in the nexus of exchange made Manila’s colonists wealthy, but not as wealthy as they wanted. “Among all those one hundred and fifty families who are settled at Manila, there are not two who are very rich,” groused the Spanish admiral Hieronimo de Bañuelos y Carrillo in 1638.
Trying to regain the advantage, the Manila government imposed taxes, freight charges, and registration fees on Chinese merchants; they were effectively forced to pay soldiers to stand guard over their property. Angered, the Chinese staged an Ayn Rand–style producers’ strike, starving Manila of supplies, and the Spaniards backed down. Frustrated, the king ordered the colony to create a kind of cartel: it would buy all incoming Chinese goods at a single price and “distribute [them] fairly among the citizens.” In theory, this would wipe out all the Chinese retailers, which in turn would greatly reduce the Parián, which in turn would greatly reduce Spanish anxieties.
Economics 101 says that cartels rarely work, because individual cartel members will cheat and cut side deals. In this case, Economics 101 was correct. Spaniards made secret arrangements with Chinese traders, paying higher prices for better-quality silk or the first chance to select pieces of porcelain. When the galleons left Manila for Mexico, they met Spanish dories full of contraband silk and silver a few miles outside the harbor.
Madrid was dismayed by the magnitude of the galleon trade—too much silver was going out, and too much silk and porcelain was coming in. Exact figures are not possible to calculate, but somewhere between a third and a half of the silver mined in the Americas went to China, either directly via the galleon trade or indirectly, via Europeans’ purchases of Chinese goods shipped overland by Central Asian traders or around Africa by the Dutch and the Portuguese. The monarchy was furious, because the king wanted the silver to buy supplies and pay troops in Spain’s innumerable wars. (“The Manila galleon’s most fearsome adversary was beyond doubt the Spanish administration itself,” the French historian Pierre Chaunu observed.) To prune back the galleon trade, officials cut the number of ships allowed to cross the Pacific to two per year. In response the galleons became enormous, ballooning to two thousand tons. Built by conscripted Malays out of tropical hardwoods, they were castles of the sea. On the Manila-bound lap they carried more than fifty tons of silver—equal, Flynn and Giráldez have calculated, to the combined annual exports of the Dutch East India Company, the English East India Company, and the Portuguese Estado da India.
Much or most of that silver was illegal. Worried Mexican officials informed the monarchy in 1602 that the gall
eons that year had exported almost four hundred tons of silver—eight times the declared amount. Furious imprecations from Madrid changed nothing; smuggling was too lucrative. “The king of China could build a palace with the silver bars which have been carried to his country … without their having been registered,” Admiral Bañuelos y Carrillo complained thirty-six years later. In 1654 the San Francisco Javier sank near Manila Bay. Its official manifest claimed that it carried 418,323 pesos. Centuries later, divers found 1,180,865 aboard. Even if one assumes, absurdly, that the divers found every last coin, the cargo was almost two-thirds contraband.
To restrict trade on the other side, the government issued import quotas. If the junks brought too much silk or porcelain to Manila, customs officials were supposed to send it back. To get around the quotas, Chinese traders arranged to have their agents meet the junks as they approached the Philippines. Much of the onboard merchandise had been ordered the year before, by Spaniards looking at samples. In a mirror image of the Spanish practice of loading illicit silk and porcelain onto galleons after they left Manila, the Chinese offloaded illicit silk and porcelain from their junks before they arrived. Only after these transactions did the ship officially enter the harbor and let the Spanish harbor patrol guide it to its berth.
Spain had its own silk weavers and dressmakers, as did its colony in Mexico. But the scale of Chinese textile production was so much bigger that Europeans couldn’t compete. Indeed, the silver-hungry Ming dynasty actually forced farmers to plant mulberry trees, the food for silkworms. Landowners with between five and ten mu (one mu is about one-sixth of an acre) had to plant, the official history of the dynasty says, “half a mu each of mulberry and cotton.” Those with more than ten mu had to plant “twice as much.” Farmers who didn’t plant mulberry had “to pay one bolt of silk.” Spurred by these decrees, farmers in eastern China covered the hills with mulberry trees. By the 1590s, the Fujianese writer Xie Zhaozhe was reporting areas with “mulberries planted on every foot or inch.” Rich farmers, he claimed, devoted “more than a million mu” (roughly 130,000 acres) to mulberry trees—entire landscapes of a single species. Working in a frenzy, farmers upriver from Yuegang harvested silk five times a year.
1493: Uncovering the New World Columbus Created Page 19
