Chapter 22

The Riches which Spain drew from America

September 16, 2021

Spain has derived so many advantages from the American trade.

She drew from the Americas so much gold and silver that we had before. But no one expected that Spain would have misfortunes.

Philip 2nd succeeded Charles 5th. He was obliged to make the celebrated bankruptcy known to all the world. There never was a prince who suffered more from the murmurs, the insolence, and the revolt of troops constantly ill paid.

From that time, the Spanish monarchy has been incessantly declining. This is due to an interior and physical defect in the nature of these riches, which renders them vain. It is a defect which increases everyday.

Gold and silver are either a fictitious, or a representative wealth.

The representative signs of wealth are extremely durable, and, in their own nature, but little subject to decay. But the more they are multiplied, the more they lose their value, because the fewer are the things which they represent.

After the conquest of Mexico and Peru, the Spanish abandoned their natural riches, in pursuit of a representative wealth which daily degraded itself.

Gold and silver were extremely scarce in Europe. Spain suddenly became abundant with those metals. This all of a mistress of a prodigious quantity of these metals, conceived hopes to which she had never before aspired.

The wealth she found in the conquered countries, great as it was, did not however equal those of their mines.

The Indians concealed part of them. They only used it for their temples and king’s palaces without our avarice.

In short, they did not know how to draw them from every mine, but only from those in which the separation might be made with fire. They were strangers to the mercury that was needed for it.

However, those metals in Europe was doubled as seen from the price of commodities doubling everywhere.

The Spaniards:

  • raked into the mines,
  • scooped out mountains,
  • invented machines to draw out water, to break the ore, and separate it.

They forced the Indians to labour without mercy. The coin of Europe soon doubled. The profit of Spain diminished in the same proportion.

They had every year the same quantity of metal, which was become by one-half less precious. In double the time the specie still doubled, and the profit still diminished another half. It reduced even more than half= let us see how.

There was a cost to:

  • extract the gold from the mines
  • give it the requisite preparations, and
  • import it into Europe.

I will suppose this to be 1:64.

When the coin was first doubled, it lost half its value with the expence at 2:64.

Thus, the galleons which brought gold to Spain, brought a thing which really was of less value by half, though the expences attending it had been one-half higher.

If we proceed doubling and doubling, we shall find in this progression the cause of the impotency of Spain’s wealth.

It is about 200 years since they have worked their Indian mines.

The amount of specie at present in the trading world is to that before the discovery of the Indies, at 1:32. It has been doubled five times.

After 200 years, the same quantity will be to that before the discovery, at 1:64.

It will be doubled once more. Presently, 50 *quintals of ore yield 5-6 ounces of gold. When it yields only two, the miner receives no more from it than his expences.

In 200 years, when the miner will extract only four, this too will only defray his charges. There will then be but little profit to be drawn from the gold mines. The same reasoning will hold good of silver, except that the working of the silver mines is a little more advantageous than those of gold.

But, if mines should be discovered so fruitful as to give a much greater profit, the more fruitful they will be, the sooner the profit will cease.

The Portuguese in Brasil have found mines of gold so rich. They very quickly reduced the profits of those of Spain and their own.

I have frequently heard people deplore the blindness of the court of France, who repulsed Christopher Columbus when he made the proposal of discovering the Indies.

Without thinking it, they did an act of the greatest wisdom. Spain has behaved like the foolish king. It wanted that every thing it touched might turn into gold. It was obliged to beg of the gods to end its misery.

The companies and banks established in many nations, have put a finishing stroke to the lowering of gold and silver, as a sign or representation of riches.

By new fictions, they have multiplied the signs of wealth, that gold and silver having this office only in part, have become less precious. Thus public credit serves instead of mines, and reduces the profit which the Spaniards draw from theirs.

The Dutch trade to the East-Indies has increased the value of the Spanish merchandize;

They carry bullion, and give it in exchange for the merchandizes of the East. They ease the Spaniards of part of a commodity, which in Europe abounds too much. This trade is as advantageous to Spain as to those who are directly employed in carrying it on.

The last decree of the council of Spain prohibits the use of gold and silver in gildings, and other superfluities.

It is as ridiculous as the states of Holland prohibiting the consumption of spices.

My reasoning does not hold good against all mines.

Those of Germany and Hungary produce little more than the expence of working them, are extremely useful. They are found in the principal state. They employ many thousand men, who there consume their superfluous commodities. They are properly a manufacture of the country.

The mines of Germany and Hungary promote the culture of land.

The working of those of Mexico and Peru destroys it.

The Indies and Spain are two powers under the same master.

But the Indies are the principal; while Spain is only an accessory. It is in vain for politics to attempt to bring back the principal to the accessory; The Indies will always draw Spain to themselves.

Of the merchandizes, to the value of about 50,000,000 livres, annually sent to the Indies, Spain furnishes only 2,500,000.

The Indies trade for 50,000,000, the Spaniards for 2,500,000.

That must be a bad kind of riches which depends on accident, and not on the industry of a nation, on the number of its inhabitants, and on the cultivation of its lands.

The king of Spain receives great sums from his custom-house at Cadiz. He is in this respect only a rich individual in a state extremely poor. Every thing passes between strangers and himself, while his subjects have scarcely any share in it. This commerce is independent both of the good and bad fortune of his kingdom.

Were some provinces of Castile able to give him a sum equal to that of the custom-house of Cadiz, his power would be much greater.

His riches would be the effect of the wealth of the country: these provinces would animate all the others, and they would be all together more capable of supporting their respective charges= instead of a great treasury, he would have a great people.

Chapter 23= A Problem

Will Spain be able to carry on the trade of the Indies by herself?

It is for their advantage to load this commerce with as few obstacles as politics will permit. When the merchandizes, which several nations send to the Indies, are very dear, the inhabitants of that country give a great deal of their commodities, which is gold and silver, for very little of those of foreigners: the contrary to this happens when they are at a low price. It might useful for these nations to undersell each other so that the merchandizes carried to the Indies might always be cheap.

These principles should be examined together with other considerations:

  • the safety of the Indies,
  • the advantages of one only custom-house,
  • the danger of making great alterations, and
  • the foreseen inconveniencies, which are often less dangerous than those which cannot be foreseen.


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