Chapter II (4)

In broadest and hastiest resume, and this by way of justification of the length to which this chapter has been drawn out, the influence of American gold and silver makes itself perceptible in 1520. For forty years a level and equal advance in each of the precious metals and in prices records itself, then the relative and absolute production of silver increases enormously over that of gold, and the ratio is disturbed. The inequality of the rate at which this change of ratio spreads to successive countries, and is adopted in their various Mint regulations, is the bullionist's or exchanger's opportunity, and the disastrous effect of their activity results in the crisis of 1570 in France, and 1622 in England and Germany. Properly speaking there has been no subsequent crisis in European history fitly comparable with the latter of these. If at all, there is only one comparison possible, and that is the currency situation in which the monetary world is at this moment, or which has come upon it since 1850--a period of bullion inflation in which silver has, finally as yet, outweighed gold, to the violent disturbance of the ratio. But, as will be seen, the other conditions of the comparison are not reducible to, or expressible in, similar terms, and so far the legitimate deduction fails. None the less, the currency history of Europe during the sixteenth and seventeenth centuries has a vital didactic importance.

FOOTNOTES:

[Footnote 9: The only accounts accessible are in Cabrera (see Philippson's "Estimate of the Revenues of Spain," in his _Henrich IV. and Philipp III._, vol. ii. p. 44), and relate only to the years 1599-1610. The amounts given are not the total yield of the American mines, which is out of the question, but the amount of metal brought yearly to Spain by the Silver Fleet. The amounts (without distinction of the metals) were as follow:--

1599 8,000,000 Ducats.
1600 9,926,192 "
1600 10,000,000 "
1601 1,000,000 "
1602 10,000,000 "
1603 7,000,000 "
1604 14,500,000 "
1606 9,000,000 Ducats.
1606 4,500,000 "
1607 12,200,000 Pesos.
1608 9,000,000 Ducats.
1609 10,600,000 "
1610 10,000,000 "

]

[Footnote 10: For further details of the troubles of 1632-36, see Vicomte D'Avenel, _Histoire de la propriete, etc._, i. 120, 121.]

[Footnote 11: Such is the statement of the proclamation itself. The difference between the ratios as there proclaimed and the ratios given in the table, pp. 40 and 69, is presumably due to the calculation being made on the mark of pure metal. For the character of these figures of ratios see the Preface.]

[Footnote 12: See Hirsch, i. 318.]

[Footnote 13: "The second (cause for the decay of the trade of Spain) is the residence of many Genoa merchants amongst them, who are found in good numbers to abide in every good city, especially on the sea coasts, whose skill and acuteness in trade far surpassing the native Spaniards and Portuguese, and who, by means of their wealth and continual practice of exchanges, are found to devour that bread which the inhabitants might otherwise be sufficiently fed with; and by reason that the King of Spain is ever engaged to their commonwealth for great and vast sums at interest, he is their debtor, not only for their moneys, but also for their favour, which by many immunities throughout his kingdom he is found continually to requite them, and amongst the rest it is observed that there is no Genoa merchant resident in Spain, or any part, but has a particular licence to transport the _rials_ and _plate_ of this kingdom to a certain round sum yearly, which they seldom use really to do, but sell the same to other nations that are constrained to make their returns in plate for want of other more beneficial commodities, which, for the certain profit it is found ever to yield in other countries, is often preferred before all the other commodities of the kingdom."--_Lewis Robert's Map of Commerce_, p. 165.]

[Footnote 14: By the action of bimetallic law is meant any action of bad money on good--of worn money on new--of higher rated (or lower valuable) money on lower rated (or higher valuable) money. It does not at all matter, especially in cases of debasement, whether there are two metals in the process or only one or even three. If a currency is silver, and part of it is debased and part left good there is bimetallic action, and the good disappears. Of course, the case is argumentatively and for deduction's sake much clearer if a currency is truly bimetallic in the ordinary sense.]