spain, gold, and silver--9/22/26

22 Sep 2026

spain, gold, and silver--9/22/26

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Today's selection-- from The Almighty Dollar by Brendan Greeley. Spain’s vast imports of silver from the New World brought dislocation and havoc:

“When mining began in the valley in Bohemia, what we think of today as the country of Spain was just a group of kingdoms allied by marriage. Toledo had been by medieval standards an industrial city, exporting cloth and steel all over Europe. Medieval Iberian kingdoms didn't have capital cities the way we think of them now, but up on its hill Toledo was the spiritual and political center of Castile, the largest and most powerful of the kingdoms on the Iberian Peninsula.

“Charles V, Philip II, and Philip III, the father, son, and grandson who held the Castilian crown in the sixteenth and early seventeenth centuries, had been blessed with two gifts. First, they were Habsburgs. The family had married its way into land all over Europe. Second, Castile had claimed some of North America and most of Central and South America, and with them a little bit of gold and a lot of silver. The volume of silver coming out of the Americas was wildly out of scale with anything Europe had ever seen. At their peak in the 1530s, European mines produced about eleven thousand kilograms of silver a year. By the 1550s, American mines had reached fourteen thousand kilograms. By the 1580s, that had more than doubled, to thirty-four thousand.A vast imperial apparatus served a single purpose: move silver out of the . ground, down the mountains, and out across the Atlantic to Europe, or across the Pacific to China, all so the Habsburg kings of Castile could take their cut.

“By law, the kings had the exclusive right to operate any mines underneath their pieces of the earth. But a hole in a mountain on the other side of an ocean is a difficult thing to manage, and so the Habsburgs let private speculators stake claims and run the mines, pushing that silver into existing markets. In return, speculators had to pay the quinto–a tax of a fifth of all that silver–to the Spanish crown. By the second half of the sixteenth century silver fleets arrived in Seville every year, and the Habsburgs treated their quinto on chat silver the same way Stephan Schlick had treated his monopoly right to buy at St. Joachimsthal. They went to bankers and borrowed against the future.

“All this new silver ultimately took on a familiar form. The Habsburgs coined their silver at almost the same weight, size, and purity as the joachimsthaler [a well-established European dollar], By the middle of the sixteenth century, merchants in Leipzig, Hamburg, Antwerp, Amsterdam, and even Florence and Genoa had come to expect their silver in taler, and the Habsburgs tweaked Castile's monetary system so they could coin silver in something so much like a taler that in northern Europe it was immediately recognized as one. In 1581 we get the first English mention of a ‘Philippes doler,’ for Philip II. The dollar coins that would eventually begin to circulate in England's American colonies came not from Saxony or Bohemia but from mines and mints in what are today Bolivia, Peru, and Mexico.

Electrotype copy of a 1525 Joachimsthaler of the Kingdom of Bohemia.

“The Habsburgs commanded a new empire, but they weren't in charge of Europe's silver markets, and so they minted more or less faithful copies of the old joachimsthaler. Then they eclipsed the investors at St. Joachimsthal as the world's dominant supplier of silver dollars. It was silver Spanish dollars that would end up in England's colonies in North America, by then always stamped with the two pillars of Hercules, draped with S-shaped banners and the old Habsburg motto, plus ultra–farther beyond.

“In the sixteenth and seventeenth centuries, war was the Habsburgs' single largest expense. The quinto allowed Philip II to send armadas to win at the Battle of Lepanto against the Ottoman Empire in 1571, then lose in the English Channel against England and the weather in 1588. Silver sustained a brutal, decades-long war to hold Habsburg possessions in what are today Belgium and the Netherlands. The quinto also paid to run new viceroyalties in Central and South America, and for regular subsidies to outposts like Havana to protect and sustain the fleets on their way to Seville. Silver made the Spanish Empire possible and served as its unifying purpose. By the beginning of the seventeenth century, war and expansion had turned Castile from a kingdom into a heartland–both the center and the origin of something larger called Spain.

“Castilians also looked around their own cities at home and saw an economic and demographic catastrophe. In 1500, per capita GDP in the kingdoms of Spain had been just below that of the Netherlands. By 1600, however, economic growth in the Netherlands had taken off, leaving Spain far behind. From 1530 to 1591, population more than doubled in Castile, growing more than in almost any other part of Spain. But between 1591 and 1700, population shrank by a fifth in the same region, even as it continued to grow almost everywhere else on the peninsula. Spain's empire had been good for the Habsburgs. It had been bad for Castile. It had been terrible for Toledo.

“The city had been a prize of late-antique and medieval invasions for a millennium–the Visigoths, the Moors, the Christian kings of the reconquest. It had its own archbishop. It was the home of the Inquisition, and a frequent host to the Cortes, a meeting of Castilian cities. In 1535, Charles V had taken the city's Alcázar, a medieval fort, and turned it into a palace. Bue Toledo isn't laid out for the spectacles of an imperial capital. In the sixteenth century, it was crowded and overbuilt, hemmed in by nature and surrounded by walls. And so in I 561, Philip II started building a brand-new imperial capital in the small town of Madrid. For a while, the hilltop continued to grow. In 1597, Toledo was still bigger than Madrid. Twenty years later, however, Toledo had lost three quarters of its population. In 1602, there were 1,000 baptisms in Toledo. By 1622, that had dropped to 640. Imagine that within two decades almost half the children of your city have disappeared. It would feel like the end of the world.

“Toledo had a strong intellectual community of church and civil leaders who were proud of the university and even met at regular poetry contests. They were bewildered by depopulation, and spent so much time and ink trying to explain it we can now identify a Toledo School, a philosophy to explain how an industrial city dies. The document Carlos showed me over coffee at the archives came from that community. Addressed to the king from the University of Toledo, it opens with a simple plea: Manufactured goods should not leave Spain, and foreign-made goods should not enter. We have documents like this today. It's an open letter from a trade group, begging for tariffs. The letter would have been passed around in Madrid, at a special council that Philip III had called to figure out an answer to the question that had consumed the kingdom: We have so much silver. What went wrong? Toledo's answer, grounded in the self-interest of its merchants, was to flip the question on its head. The city hadn't collapsed despite all those silver dollars. It had collapsed because of them.”