Published by Harvard University Books, periodicals, and manuscript to be addressed, EDITORS of QUARTERLY JOURNAL OF ECONOMICS, Cambridge, Mass. Business letters to be addressed, HARVARD UNIVERSITY PRESS, 2 Univ sity Hall, Cambridge, Mass. Subscription, $3.00 a year. CONTENTS FOR NOVEMBER, 1914 I. HUMAN BEHAVIOR AND ECONOMICS: A SURVEY OF RE- . II. THE CITY OF LONDON AND THE BANK OF ENGLAND, NOTES AND MEMORANDA: The War and the Financial Situation in the United States CONTENTS FOR FEBRUARY, 1915 1. WOMEN'S WORK AND WAGES IN THE UNITED STATES. II. THE CONTEST IN CONGRESS BETWEEN ORGANIZED LABOR AND ORGANIZED BUSINESS III. SCIENTIFIC MANAGEMENT IN PRACTICE IV. MONOPOLY OR COMPETITION AS THE BASIS OF A GOV- V. . WAGES BOARDS IN AUSTRALIA II. Boards Outside Victoria III. Organization and Procedure VI. DEPRECIATION AND RATE CONTROL A Criticism A Reply A Rejoinder Concluding Comments REVIEWS: The Economic Synthesis Marconcini's L'Industria Domestica Salariata NOTES AND MEMORANDA: Deposit Guaranty in Mississippi Lincoln and the Tariff: A Sequel COPYRIGHT, 1915, BY HARVARD UNIVERSITY. Wesley C. Mitchell J. M. Keynes E. Dana Durand M. B. Hammood Walter M. Adriance J. M. Clark O. M. W. Sprague Z. Clark Dickinson C. E. Persons THE QUARTERLY JOURNAL OF ECONOMICS MAY, 1915 AMERICAN GOLD AND SILVER PRODUCTION IN THE FIRST HALF OF THE SIXTEENTH CENTURY SUMMARY I. Introduction. Uncritical and exaggerated estimates before the nineteenth century, 434. — The work of Humboldt, Soetbeer and Lexis, 437.- New sources of information, 439. — II. Mexico: earliest accounts of its wealth, 440.- Information used by Soetbeer and Lexis, and conclusions drawn from it, 442. - How the present writer prepared his estimates, 442. III. Peru: its three divisions, Peru, Upper Peru and Chili, 448. Nature of the evidence used by Soetbeer and Lexis, and their results, 449. - New evidence and how employed, 452. — Summary, 458. IV. New Granada: its conquests; the early treasurers of the colony, 458.- Estimates of Soetbeer, Lexis and Restrepo; figures secured by the present writer, 462.-V. West Indies and Tierra Firme, 464. – Early gold-production on the islands and coasts of the Caribbean, 465. — Conclusions, 467. — VI. Resumé of the figures in the preceding sections, 468. VII. Seville: receipts of the India House, 1503-1560, 469.Private importations of bullion appropriated by the crown, 470. — The function of Spain as the distributor of the precious metals to the rest of Europe, 471.- Appendix: Monetary values in Spanish America in the first half of the sixteenth century, 475. I. INTRODUCTION IN the Europe of the fourteenth and fifteenth centuries, the lack of precious metals to meet the requirements of an expanding mercantile activity came to be felt with increasing severity. The production of bullion in the few mines worked in Euope was small and uncertain. A variety of circumstances, such as trade with Asia, the transforming of gold and silver into plate and jewels, and the accumulation of ecclesiastical treasure, had so far offset the output from the mines as probably to deplete the stock of money in circulation. It was the crying need of gold which fostered an increase of 1 alchemy toward the end of the Middle Ages. It also prompted the voyages of Columbus and his companions; for one of the principal motives which led to the discovery of the New World was the conviction that by sailing westward might be found Marco Polo's golden land of Zipangu. The precious commodity was not obtained from Zipangu, but in the barbarian empires of Peru and Mexico. And from these distant regions, especially after 1545, a rich stream of precious metals flowed in ever larger quantities to the shores of Spain, and through Spain to the north of Europe. Some conception of the amount of bullion which crossed the seas in the first half-century after Columbus may contribute to an appreciation of the economic problems of that age. Travellers and historians since Columbus' own time have exercised their imaginations upon the subject of American treasure. The extraordinary character of the remittances of gold, silver, pearls and emeralds gave contemporaries an exaggerated image of the revenues drawn by Spain from her new colonies. To many minds, apparently, they were the very foundation of Spain's political greatness. Early observers, it is true, were as a rule comparatively modest in their assertions; but in the seventeenth and eighteenth centuries Castilian fancy knew no bounds. Peter Martyr wrote in the second decade of the sixteenth century, before the conquests had extended to the mainland: "Solo de la Española se trae a España todos los años la suma de 1 400,000, y á veces de 500,000, ducados, se entiende que eso es, del quinto que viene para el Real Fisco, 80,000, 90,000 y 100,000 castellaños de oro, y á veces mas...." 1 The Venetian ambassador, Gaspar Contarini, in a letter of November, 1525, estimates the income of the crown from the Indies at about 100,000 ducats a year. Another Venetian, Nicolas Tiepolo, in 1533 remarked that the treasure from America in one year amounted to 150,000 ducats, in another to not more than 50,000. In 1548 Mocenigo gives the entire returns for the crown as about 350,000 ducats, and three years later Marino Cavalli raises the figure to 400,000. In 1558 Michel Soriano, ambassador to Philip II at his accession, remembers that people spoke of "millions" of pesos; but in fact the king was receiving only between 400,000 and 500,000 ducats a year. Even in 1561 Andrea Badoero reckons the income from America at not more 3 1 Decade III, lib. 8, cap. 3. Decade III was finished in October, 1516, and this chapter was probably written in that year. The Spanish coins referred to in this paper are the maravedi, castellano, ducat, real, peso de minas and peso fuerte. The usual unit of calculation in Spain was the maravedi, represented in the sixteenth century by a billon coinage of the smallest value and one which was becoming progressively more debased. The castellano, the standard gold coin of Castile before 1497, was one-fiftieth of a marc of gold of a fineness of 231 carats. As the Castilian marc weighed 230.0675 grams, the castellano contained 4.5534 grams of gold. Its legal value lay between 480 and 490 maravedis. It was superseded in 1497 by the ducat, in imitation of similar coins in Italy and Hungary. The ducat was of the same fineness as the castellano, but 65) were minted from a marc of gold instead of 50. Its value was fixed at 375 maravedis, and it contained 3.485 grams of gold. The common silver coin of Spain was the real, issued at a tale of 67 to the marc, and of a fineness of 67/72. As the legal value of a marc of silver after 1497 was 2,278 maravedis, the real was worth 34 maravedis. The peso de minas was an imaginary unit of value employed in America before the establishment of royal mints. It represented, like the castellano, one-fiftieth of a marc of gold, but of a fineness of only about 22 carats, and its value was presumed to be 450 maravedis. It was equivalent, therefore, to about 4.18 grams of gold. The peso fuerte was a silver coin of 272 maravedis or eight reals, minted in America after 1537. It became the famous Spanish dollar or " piece of eight " of trade, and in the sixteenth century contained 25.563 grams of silver. paper are all expressed in pesos fuertes of eight reals. See also the appendix to this article. Ranke, Die Osmanen, etc., 3d ed., 1857, p. 399. likely nearer 75,000 ducats. Ibidem. 108,000 ducats. The final figures given in this The actual income was very The receipts of the Casa de Contratacion in that year were little over than half a million. Finally, the Spanish historian Gómara wrote in 1552 that in the sixty years the Spaniards took to discover, conquer and explore the American continent, the gold and silver they won thereby was not to be reckoned. It passed sixty million ducats. 1 Among seventeenth century writers, we find estimates less restrained and judicial. It is true that in 1618 Luis Valle de la Cerda (Desempeño del Patrimonio Real, etc., cap. xv) calculates in round figures the amount of gold and silver received from America during the first hundred years at more than 500 millions for the king and private individuals; 1 an estimate which was probably not far from the reality. In 1626, however, Pedro Fernandez Navarrete (Conservacion de Monarquias, etc., Disc. xxi) computed the returns up to his time at 1,536 millions; 2 while the worthy Dr. Sancho de Moncada (Restoracion Politica, etc., 1619, Disc. iii, cap. i) in deploring the scarcity of money already noticeable in the peninsula, accepts the statement that the registered income from America for the sixteenth century alone had been two billion pesos.3 It would be fruitless to quote the figures of other and later Spanish publicists. Their estimates for the sixteenth century were generally based upon the word of writers who preceded them, men who possessed little real information, and whose methods were as uncritical as their own. The earliest attempt at a scholarly discussion of the problem we owe to the renowned Germanscientist and traveler, Alexander von Humboldt. In the first years of the nineteenth century, Humboldt 1 Colmeiro, Econ. Polit., vol. ii, p. 431, note 2. The unit referred to is probably the ducat. 2 Ibidem. Navarrete was copied by Gil Gonzalez Davila (Teatro de las Grandezas de la Villa de Madrid, 1623, pp. 471-472); and later in the century probably by Solorzano Pereira (De Indiarum Jure, 1629-39, lib. v, cap. i), and by Nuñez de Castro (Solo Madrid es Corte, 1669, lib. i, cap. 13). • Ibidem. |