Silver and the Spanish Conquistadors

silver barsIf you were to go to the US Mint website today and purchase a 1 troy ounce, Silver Eagle coin, would you even stop and think of the legacy of where the metal in that coin may have come from? You see, not all of it came directly from mines that are being worked today. Much of it was “recycled” – effectively melted down from previous generations of coins that the US Government has be releasing for over one hundred years. In fact, there’s a good chance that some of that silver may come from really unusual places and times.

Prior to 1873, the US Mint used to allow people to bring them silver from any origin and the Mint would melt it down, refine it and strike US dollar coins with it. Most of that silver undoubtedly came from mining operations in places like Nevada, but some of it undoubtedly came from Mexico and Central America, acquired through trade by farmers and cattle herders with Mexicans and Indians or by other more violent means.

Silver mining in Mexico and Central America has a very long history going back almost 400 years. The Spanish Conquistadors came to the New World in search of gold and were happy to take it by any means necessary. With their strategic and tactical advantages in weapons and technology, the easiest way for the Spanish to acquire their gold was to take it from the natives. Eventually, having defeated most of the indigenous population and converted them to Christianity, the Spanish began making them work in mine sites largely for gold.

By the time the 17th and 18th centuries had come, the Spanish were extracting more than 300 tons of silver every year from mine sites in Mexico and Peru. They would melt the metal down into bars for transport back to Spain or their overseas ports where it would eventually be traded for finer goods like silk and spices from China. The Spanish were not very focused on silver and took only what was visible at surface level, much of the extracted unrefined silver ore sitting around in black rocks was ignored. Platinum was another metal that was mined by the pre-Columbians that the Spanish found, but only had a passing interest in.

Many of the mines that were opened by the Spanish rulers in Mexico are still in operation today and silver is one of Mexico’s largest natural resource exports, about 30% of all the world’s silver still comes from Mexico. During the time of Conquistadors, the world’s entire supply of this precious metal doubled because of the mining operations in Mexico. While gold is often written as the prime motivator in the history books, it would be foolish to underestimate the impact and the economic benefit that silver brought to the Spanish from their conquests in the New World.

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