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Colonial Spanish America

Colonial Spanish America

Despite Spanish America's fame as the land of El Dorado, colonial mining produced comparatively little gold but huge quantities of silver. Official imports of American bullion between 1500 and 1650 probably drove up European gold stocks by 5 percent and silver stocks by 50 percent—and the age of greatest Spanish American silver production did not even begin until about 1700. Output of the Spanish colonial mines lowered the value of silver relative to gold, in Europe, from 10.5 to 1 around 1500 to 15.5 to 1 by 1800. (The Brazilian gold boom beginning in the 1690s stopped silver's further decline.)

"Gold constitutes treasure," wrote Columbus to Ferdinand and Isabella, "and anyone who has it can do whatever he likes in the world." If bullion gave Spanish adventurers the freedom they yearned for, American gold and silver also magically transformed the Spanish monarchy into a world power, seemingly freed from material constraints, to champion Catholicism against Protestant heresy, defend Habsburg imperial ambitions, and send an Invincible Armada against the English.

Colonial mining concentrated almost exclusively on precious metals. Although aware of deposits of copper and iron, Spaniards could generally import base metals more cheaply from Europe than they could produce them in America. Aside from gold and silver, mercury was the only metal mined in large quantities during the colonial period. The main, and indeed sole significant, center for mercury was Huancavelica, in Peru, discovered in 1563. The Spanish worked alluvial gold deposits in the Caribbean, Mexico, and the Andes (especially in New Granada).

Spanish settlers located all the main silver-bearing zones of Latin America in the sixteenth century. Some deposits of silver ore had been known to the native cultures. Knowledge of these led the settlers, often with success, to seek other neighboring deposits. A prime example of this progression is the Spaniards' exploitation, from 1538, of the ores of Porco in present southwestern Bolivia, which the Incas had mined and refined, and from Porco their discovery in 1545 of the far larger deposits of Potosí, twenty miles to the northeast. The main silver regions found by 1600, and still active in the early twenty-first century, were located in the central Andes (in present-day southern Peru and western Bolivia) and in a 600-mile band of Mexican territory running northwest from Pachuca to Santa Bárbara. This band included the major Mexican centers: the two just mentioned as well as Guanajuato, Zacatecas, and Sombrerete. Other lesser silver centers arose in western and southern-central Mexico before 1600, after which a few major strikes were made in the north. The geographical bounds of colonial Spanish mining essentially were drawn in the sixteenth century. Very little silver ore was ever discovered or worked in Portuguese America.

Most of the ores were found at considerable height: in the 6,000 to 8,000 feet range in Mexico and from 10,000 to 16,000 feet in the central Andes. The ore-bearing veins had been formed during Tertiary orogenesis, when the great sierras of Mexico and the Andes underwent their most recent uplifting. During those movements, hot water carrying metallic salts rose from the earth's interior to fill cracks near the surface. Silver sulfides were among those salts, along with compounds of such elements as tin, copper, lead, bismuth, and antimony. In many cases these silver sulfides (called negrillos by the Spanish) were later enriched by the action of descending water, often being converted by oxygenation into silver chlorides (known as pacos or colorados). Thus enriched, the ores near the surface often yielded high gains to the first miners to attack them. Colonial miners found little native silver (at Huantajaya in northern Chile nearly pure wire silver was extracted) but great quantities of enriched ores. These initial profits provided the capital needed for investment in shaft mining and complex refining machinery once the shallow ores had been taken.


Silver production in its first three decades in both Mexico and the Andes drew on native skills. The Tarascans of western Mexico appear to have placed their copper-smelting knowledge at the disposal of Spaniards wanting silver. In comparison with the central Andean peoples, however, Mexican natives were backward in metal production. Early Spanish miners in what is now Bolivia drew heavily on both the Andeans' abilities in subterranean mining and their refining techniques. Particularly important was the wayra, a small, wind-blown smelter. Up to the 1570s Spanish silver "miners" in the central Andes tended to leave extraction and processing of ore to native experts, simply taking a rent in exchange for access to the ore deposits. Some mining and refining technology was, of course, imported from Spain. Especially important as carriers of technology from Spain were the Basques, in whose home economy iron production had long played a prominent part. Another important, perhaps crucial, source of knowledge was the miners of Central Europe, who were present in the New World from the 1520s, though their movements are hard to track. And Central European notions may have been carried across the Atlantic by Spaniards. Finally, the possibility of technical contributions from Africa, though not yet explored, cannot be discounted. Many of the early African slaves in Spanish America came from the extreme west of Africa, where producing and working iron were ancient skills. Their techniques were crucial in the Brazilian goldfields.

The important technical role of Native Americans in silver production came to an end in the 1560s and 1570s. The main reason was the development of ore processing by amalgamation with mercury. The principles of amalgamation had been known in Europe since Roman times, but the industrial development of the process took place in Mexico in the 1550s. Bartolomé de Medina, a Spanish Dominican, is generally credited with devising the process in the mid- 1550s, particularly mixing magistral) (copper sulfate) with ground silver ore and mercury. In its genesis (still far from clear), Central European experience seems to have played a large part.

Refining by amalgamation consisted essentially of grinding the ore to a coarse dust and sprinkling a small amount of mercury over it. In time (typically, several weeks) the mercury would amalgamate with the silver atoms in the ore, forming a pasty substance. From this, pure silver could be obtained by applying enough heat to volatilize the mercury. Other ingredients were added to increase the speed and effectiveness of the process: water, to bind the dust into a loose mud; common salt, iron filings, and copper sulfate to increase the yield of silver. In Mexico after 1600, the various substances were spread out on a paved yard and there blended. Hence Spanish American amalgamation is often called the patio process. But on account of low ambient temperatures, patios were not used in the Andes. There, amalgamation was done in tanks, which were sometimes built over vaults in which fires could be set.

To supply mercury for amalgamation in the Americas, the crown established a monopoly over the only two significant quicksilver mines within the empire, at Huancavelica (Peru) and at Almadén (Spain). Huancavelica generally supplied the needs of Andean refiners, with its surplus rounding out shipments to Mexico from Almadén. Prior to 1700 this arrangement favored Andean refiners because Huancavelica provided more abundant stocks than did decadent Almadén. Lack of mercury probably limited silver output in Mexico during the 1600s. In 1698 new discoveries at Almadén led to a steady expansion in mercury production, while depletion of its richest ores by 1760 made Huancavelica less reliable for the Andes. During the latter half of the 1700s, Almadén made large shipments to South America, besides supplying massive amounts of mercury to Mexico. During the mid-1600s and late 1700s, the crown occasionally purchased mercury from Idrija (Slovenia) when imperial production failed to satisfy the silver refiners' demand.

The silver boom of the 1700s would have been impossible without the surge in mercury output. Mexican silver refiners received further incentive to step up production when the crown cut mercury prices by 50 percent between 1767 and 1778. Attempts to pass on such savings to Andean refiners never permanently materialized, in part because of production difficulties at Huancavelica and also because the government tried to profit from the sale of the mercury. Attempts to find significant mercury deposits in Mexico failed during colonial times. Ironically, however, important discoveries were made soon after independence near Santa Clara, California. Mercury from the New Almadén and New Idria mines made an important contribution to the recovery of silver mining in the new Spanish American nations.

Once amalgamation became established in Mexico during the 1550s and in the Andes during the following decade, silver production passed largely to the Spanish. One great advantage of the process was the ability to handle large volumes of low-grade ore. Its development was indeed spurred by the depletion of the rich surface ores that had previously been smelted. But pulverizing ore on a large scale demanded the building of many trituration mills, powered by animals or waterwheels. Herds of mules and horses had to be bred; dams had to be built. Mines grew deeper and longer as the economies of scale inherent in the new process became apparent. The lower workings began to flood, requiring the installation of pumps and winches. All this meant the deployment of capital that native miners did not possess and the building of machines that had European, but no American, antecedents. Indians were thus largely reduced to the role of manual laborers once amalgamation took hold; they did to some degree (occasionally quite large) continue to use native smelting techniques on the margin of the Spanish-dominated industry. Indeed, at Potosí during the late colonial period, indigenous mining and smelting operations may have produced as much as half the silver coming from the Rich Hill.


Almost all manual workers in silver mining and refining were Native Americans. In the early decades, Indians in encomienda were often sent by their masters to work mines and smelters; some of them, as suggested earlier, really operated with a substantial degree of independence. Indian slave labor too was common enough in mining, particularly in Mexico, before enslavement of natives was reigned in by the authorities in the 1550s.

Subsequently, however, the dominant work arrangements in mining were drafts and wage labor. For draft labor, precedents had existed in both the Aztec and Inca empires (coatequitl and mit'a, respectively), which undoubtedly made it simpler for the Spanish to extract forced labor from native communities. The most notorious draft was the mita of Potosí, formally created in the 1570s by Viceroy Francisco de Toledo. At least in its early years, it brought annually more than 13,000 Indian men to work in Potosí. Toledo also established a mita for Huancavelica, to supply cheap labor for the mercury mines there. In Mexico the draft was called repartimiento. In both cases, the employer paid the draftee a small wage. It was, however, insufficient to maintain the worker, let alone the family who often accompanied him in the Andean case.

Indian wage labor in silver mining appeared almost at the same time as drafts were organized. Once amalgamation was operating, demand for labor grew fast. The drafts of the 1570s were set up mainly to meet this demand but quickly proved inadequate. Mine and mill owners needing workers then began hiring individual Indians, some of them from the drafts themselves (which were thereby depleted). The wage paid to the hired men was up to five times higher than what the draftees received. Using wage workers gave employers another benefit besides a more stable labor supply: the skills that the permanently hired man was more likely than the draftee to acquire.

By 1600 most mining and refining workers were salaried. In Mexico the total labor force producing silver was by then about 9,000 men. Of these, some 68 percent were waged, 18 percent drafted, and 14 percent African slaves. Draftees worked only in the southern mines, in or near the center of Mexico, where the native population had long been sedentary. The northern nomads were not amenable to repartimiento. How many men were employed in central Andean mining by 1600 is not known. But in Potosí, which alone produced well over half the Andean silver at the time, 11,000 to 12,000 men were usually at work, barely 40 percent of them draftees in the mita. The rest were salaried Indians. In the smaller mining centers that by then had developed around Potosí, mita labor was all but unknown. Hence by 1600 the proportion of waged workers in central Andean silver production was close to that found in Mexico. Over the following two centuries, wage labor remained dominant. Drafts all but disappeared in Mexican mining but continued to provide a minority of workers in the Andes until 1812.

It is striking how few workers Spanish American silver production employed. Allowing for lesser mines in South America not mentioned here, the total workforce cannot have exceeded 25,000 in 1600. This was a small part even of the drastically shrunken native population that had survived the sixteenth-century epidemics. It also challenges allegations that the unhealthy and often dangerous labor in the mines annihilated millions of indigenous workers.

Mine owners in the seventeenth century often petitioned the crown to subsidize supplies of African slaves to remedy the deficiencies of the drafts. The crown never obliged. Mexican miners and refiners found it worthwhile to invest in small numbers of black slaves, as the figures given earlier show. But at Andean altitudes and temperatures, Africans quickly succumbed to disease when put to heavy underground labor. Africans, slave and free, were certainly present there, however, as craftsmen engaged in tasks connected with mining, such as carpentry and smithing.


Between 1560 and 1685 Spanish American mines produced 25,000 to 30,000 tons of silver and between 1686 and 1810 more than double that amount. In the first period, the central Andean mines dominated production, with Potosí leading the field, even though it reached its peak in the 1590s. After that, depletion of the better ores and rising costs of extraction and labor brought a steady decline of Potosí, which lasted until the 1730s. The contraction of Potosí itself was somewhat offset by discoveries of ore in the surrounding area—above all, at Oruro, 160 miles to the northwest, which burst onto the scene in 1606–1607. It too subsided after 1620, though it remained an important Andean producer throughout colonial times. The Andean seventeenth-century decline was severe enough to produce a falling trend in total Spanish American production from about 1630 to 1700.

In Mexico before 1685 the major producing region was Zacatecas, which embraced the important subdistrict of Sombrerete. Zacatecas was pursued closely after 1630 by Santa Bárbara and Parral and rather more distantly from about 1600 by San Luis Potosí. Other high-yielding Mexican mining centers to about 1700 were Pachuca, Taxco, Guanajuato, and Sultepec. Mexican silver output rose steeply between 1560 and 1630. The rate of growth then slackened or even leveled off, but there was definitely no broad decline of the Andean sort. Doubtless, growing costs of extraction and labor hindered Mexican mining after 1600. A major difficulty after 1630 was the preference that the crown—which controlled the distribution of quicksilver—gave to the Andean mines in the supply of this essential reagent. The Andes were favored because, although production there was dropping, they were still the largest silver-producing zone in the empire. The ensuing shortage of mercury in Mexico restricted silver production there. A return to smelting seems to have solved this difficulty after 1660, perhaps allied with the use of underground blasting. (Both the resurgence of smelting and the use of blasting need further research. Blasting was definitely being used in the Andes around Potosí by the early 1670s. Its earliest known use so far in Mexico is in the early eighteenth century.)

By 1700 Mexico was clearly ahead of the Andes in output. Pachuca, Zacatecas, and Parral flourished in the early 1700s, and San Luis Potosí began to rise rapidly after 1750. After 1730, however, all were dominated by Guanajuato. Though the enormous amounts of silver emerging from Mexican mines after 1770 catch the attention, the highest growth in output may well have taken place before 1750. Rising costs, aggravated by a declining relative value of the silver produced, seem likely to have reduced the growth rate in the late eighteenth century.

Potosí experienced a revival in the 1740s that lasted for sixty years, though in about 1800 maximum output barely reached half the levels achieved in the 1590s. This recovery was propelled by low labor costs as well as by a tax cut in 1736 from the fifth, or quinto real, that the crown had levied on Andean silver production from the beginning, to the tenth (diezmo), long paid by miners as royalty almost everywhere else in Spanish America. In the Andes a more striking development, however, was the upsurge of production from mines in Peru proper, particularly at Cerro de Pasco, from the late 1770s. This was partly a response to the increased demand for silver in Peru after the Audiencia of Charcas—in which Potosí and Oruro were located—had been assigned in 1776 to the new Viceroyalty of the Río de la Plata. Silver from Charcas now flowed out legally through Buenos Aires, and the merchants of Lima found themselves short of cash with which to trade. The result was larger investment than before in silver production in Peru itself.

Both Mexico and the central Andes benefited in the eighteenth century from a steady growth of quicksilver production at Almadén after new deposits were found there in 1698. This increase more than sufficed to offset faltering mercury production at Huancavelica. Both silver-producing regions, but especially Mexico, also responded after about 1770 to Bourbon governmental policies designed to stimulate mining, which included tax cuts, lower mercury prices, the creation of mining guilds and colleges, dispatch of teams of European experts to update production methods, and awards of titles of nobility to successful miners.

The supply of capital to mining also became more sophisticated in the eighteenth century, with Mexico again the site of the greatest advances. The main source of investment funds in both major producing areas had long been the great merchants who ran the transatlantic and transpacific trades. In late colonial Mexico these merchant houses took on functions quite close to those of banks. Their heavy investments allowed the scale of mining enterprises in Mexico to grow impressively, possibly accompanied by a rise in efficiency. In the Andes, for reasons still to be clarified, mining remained a smaller-scale and more primitive business, although the first steam engine to be used in Spanish American mining was installed in Cerro de Pasco, in Peru. This did not happen, however, until 1816.

The significance of silver mining for colonial Spanish America, for Spain itself, and for the rest of the world, is hard to exaggerate. Silver production sent ripples throughout the imperial economy; mining's fortunes affected almost every sector of colonial life. Mining monetized the Spanish American economy, drew Indians into colonial economic activities, created American demand for American products and European and Asian manufactures, and filled (if only briefly) the coffers of the Spanish crown. It also bears much responsibility for the damage that traditional Indian village life suffered under Spain, for inflation in the economy of Europe, and for lasting pollution, particularly in the form of mercury, of the mining zones' environment. Whereas silver stimulated economic life, mining also absorbed much of the capital available in the colonies and so hindered development of other economic sectors. The monarchy's emphasis on bullion production reinforced Spanish America's colonial status.


All the major regions that yielded silver in colonial times continued to produce it after Independence, though almost everywhere the wars damaged the mining industry. Destruction of machines and mines was not the most serious problem. Worse was the hiatus that the wars caused in maintenance and investment. Machinery decayed and workings often flooded or collapsed for lack of attention. After the wars, though capital was available from local and foreign (particularly British) sources, so much needed to be put right that restoration was slow. Nevertheless, silver production did not slump so severely in the post-Independence decades as has sometimes been thought. In Peru, average annual production from 1800 to 1804 was 531,000 marks (265,000 lbs.). The corresponding figure for 1820 to 1824 was 161,000 marks (80,000 lbs.); for 1830 to 1834, 295,000 marks (147,500 lbs.); and for 1840 to 1844, 500,000 marks (250,000 lbs.), close to the pre-conflict level. Much the same happened in Mexico, which, having produced 62 percent of the world's new silver between 1801 and 1810, continued to yield between 50 and 60 percent of the total to 1860. The quinquennium of highest-ever colonial production in Mexico was 1805–1809, with an annual average of some 20 million pesos (about 600 tons). Only half this amount was produced in 1822, the nineteenth-century nadir of output, but it was equaled again, after a slow recovery, in the period 1848 to 1850. In Chile, where gold had been the precious metal of colonial times, no restoration of silver was needed. But an important strike at Chañarcillo, near Copiapó, in 1832 created an instant silver boom that was sustained by further discoveries, culminating in that of Caracoles in 1870. This site was in Bolivia but was worked largely by Chileans crossing their northern border. It became Chilean in the War of the Pacific (1879–1883). Northern Chile, however, turned predominantly to copper production about 1900.

Recovery by mid-century was followed by expansion, accelerating toward 1900. New ore deposits were found and new refining methods applied. In Peru, for example, the working of fresh deposits at Casapalca and Morococha undermined the long-standing ore predominance of Cerro de Pasco. Lixiviation, a leaching process introduced to Peru in 1890, partly replaced the traditional smelting and amalgamation of silver ores. The method also was tried in Mexico, where cyanidation, introduced in the 1890s, proved a more useful refining method. Everywhere in the late nineteenth century, mechanization of mining and refining increased, often as a result of rising foreign investment, especially from the United States.

In the long term, since Independence, Mexico has been the largest Spanish American source of silver; it is still among the foremost producers in the world. In the years 1983 to 1987, for example, it ranked first, with an annual average of some 2,463 tons. Production has run at similar levels for much of the twentieth century. By the start of the twentieth century, in the central Andes, silver was yielding pride of place to other base metals often found in association with it—copper in Peru, tin in Bolivia—that proved more profitable, given shifts in world demand. Nevertheless, Peru, after wide variations in its output of silver in this century, in the mid-1980s ranked second in the world, with an annual average of some 1,969 tons. Much Peruvian silver is a by-product of copper refining.

See alsoInti; Mamaquilla; Repartimiento; Slavery: Indian Slavery and Forced Labor; Toledo y Figueroa, Francisco de.


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                                    Kendall W. Brown

                                      Peter Bakewell

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