The silver of Zacatecas

Silver from Mexico became the world's first genuinely global currency. It is also why trade between the Americas, Europe and Asia was joined into a single circuit, a century before anyone called it globalisation.

Where it came from

Zacatecas was found in 1546, Guanajuato soon after, and later Potosí in what is now Bolivia. Together, Spanish America supplied an estimated 80 per cent of world silver production over the three centuries that followed.

Timeline

1545

Potosí is discovered in the Andes

1546

Zacatecas is discovered in Mexico

1554

the patio process: mercury amalgamation makes poor ore pay

1565

the first Manila galleon crosses the Pacific

1571

Manila is founded; the route to China is fixed

1580

Ming China shifts its tax system to payment in silver

1620

production at its height

1810

the war of independence breaks out; mining collapses

1857

the Spanish silver dollar ceases to be legal tender in the United States

The circuit

The silver went two ways. One east across the Atlantic to Seville, on into European treasuries and warfare — and onward to Asia as payment for spices and textiles.

The other went straight west. The Manila galleons sailed from Acapulco to Manila once or twice a year for two hundred and fifty years, with silver one way and silk, porcelain and spices the other. It is the longest regular trade route that has existed, and it linked the Americas to China without passing through Europe.

Why China absorbed it

Ming China shifted taxation to silver rather than grain and labour. The country had little silver of its own, and demand became insatiable. The gold-to-silver ratio was twice as favourable in China as in Europe, so shipping silver there paid whatever it was afterwards used for.

An estimated third of all American silver ended in China.

What it cost

The work was done under repartimiento — forced labour in rotating shifts, with villages required to supply a fixed number of men. The patio process required mercury, ground into the ore by hand. Mercury poisoning was widespread, and the contamination is still present in soil and lake sediments around the mining towns.

The dollar sign

The Spanish silver dollar, "pieces of eight", was used as currency worldwide and was legal tender in the United States until 1857. The sign $ descends from it — probably from the pillars on the Spanish coat of arms with a ribbon around them.