POTOSÍ. Potosí was a city and a region in Upper Peru (modern Bolivia) and was the most celebrated mining district in colonial Spanish America. With the discovery of silver at the Cerro Rico (Rich Hill) in 1545, Spaniards and Andeans rushed to exploit the fabulously rich ores, and the city of Potosí grew.
The first boom ended around 1560 with exhaustion of the rich surface ores that could be refined with indigenous smelting ovens (guayras). The next, from the mid-1570s until the early 1600s, began with the introduction of amalgamation, a new technology capable of profitably refining lower-grade ores. Official annual output reached 7 million ounces, and contraband refining added to that. Vale un Potosí ("It's worth a Potosí") came to mean something priceless.
To compensate refiners for the cost of underground mining, mills to pulverize ore, and mercury for amalgamation, in 1573 Viceroy Francisco de Toledo adapted the Inca system called mita of rotating forced indigenous labor, to provide workers for the mines. It provided Potosí with as many as 13,400 low-paid corvée workers per year. Mita workers probably made up half the labor force, with free laborers the remainder. Work at Potosí was dangerous and unhealthy, and the mita disrupted life in indigenous communities.
Despite its altitude, which made it necessary to import basic necessities and luxuries alike, Potosí had more than 100,000 inhabitants by 1600. As silver output declined after 1620 with depletion of its best ores, Potosí's population dropped. After the crown halved the mining tax to a tenth, Potosí experienced a modest revival in the mid-1700s, but it only had 10,000 residents by the end of the colonial period.
Nonetheless, Potosí epitomized the grandeur and brutality of Spain's colonial system. Its silver subsidized Spanish imperialism and helped monetarize the European and world economies.
See also Coins and Medals ; Colonialism ; Exploration ; Pizarro Brothers ; Spanish Colonies: Peru .
Bakewell, Peter J. Miners of the Red Mountain: Indian Labor in Potosí, 1545–1650. Albuquerque, 1984. Excellent analysis of technological and economic aspects of silver production, as well the mita and free labor.
Tandeter, Enrique. Coercion and Market: Silver Mining in Colonial Potosí, 1692–1826. Albuquerque, 1993. Traces the crown's attempt to reverse Potosí's decline.
Kendall W. Brown
Potosí, a city and region that was the most famous silver-mining center of the Spanish Empire. The Villa Imperial (Imperial Town) of Potosí was the envy of Spain's rivals throughout the colonial era. It perches high (ca. 13,100 feet) in the eastern range of the Andes in southern Bolivia, inland from the altiplano. Mining dates from the discovery of silver ores in the upper reaches of the Cerro Rico (Rich Hill) in 1545. The town developed rapidly, with a characteristic Spanish colonial gridiron plan, on a sloping site some two miles north of the summit of the cerro.
This site was one of the largest deposits of silver ore ever found by the Spanish in America and certainly the most concentrated rich deposit. The ore from the topmost few hundred feet of the Cerro made Potosí (with some help from district mines after 1600) the source of roughly half Spanish America's silver output up to 1650. Officially registered production to that date amounted to some 450 million ounces. Actual production was surely higher. Output boomed particularly in the last quarter of the sixteenth century, after the introduction in 1571 of a method of refining the ores with mercury (the amalgamation process). The decade from 1575 to 1585 was the most extraordinary in Potosí's history, with output quintupling. The highest-yielding year ever was 1592, when some 7.1 million ounces of silver were declared at the treasury office in the town. This immense quantity of metal was refined in eighty mills extending along the Ribera (water course) descending through Potosí. The noise of their water-driven stamps and the fumes coming from furnaces roasting ores must have made this seem an industrial city—as indeed it was, the first in colonial Spanish America.
By 1600, however, much of the easily accessible ore in the summit of the Cerro had been mined. Plenty of ore remained lower in the hill, but it was less rich and, because deeper, more expensive to extract. This high cost was the main reason for production leveling off around 1600 and then slowly declining for more than a century. During this time, various lesser deposits scattered over the highlands around Potosí were discovered; they became important for periods ranging from a few years to a few decades. The most productive of them (after Oruro, which was the center of a separate district) was probably San Antonio del Nuevo Mundo, 170 miles south-southwest of Potosí, active from about 1647 until the 1690s. San Antonio was worked to especially good effect by Antonio López De Quiroga. Although these district mines occasionally yielded as much silver as the Cerro itself, they generally flared but briefly, and their bonanzas served only to interrupt the downward trend of total production. The year of lowest output in the entire colonial period was 1712, with some 915,000 ounces registered from the Cerro and the district together. By this time Potosí was being overtaken in production by northern Mexican mines such as Zacatecas (1546) and Guanajuato (1550), which dominated Spanish-American silver output for the rest of the colonial period.
After some thirty years of flat output, the Potosí district staged a recovery from 1750 to 1800, though barely reaching half the production levels of two centuries earlier. The reasons for the recovery include higher demand for silver early in the eighteenth century, a reduction of the royalty tax in 1736 from a fifth to a tenth of gross production, great pressure on draft laborers to raise their productivity after about 1750, and possibly the expanding use of blasting to reach and remove ore.
Potosí suffered greatly, as did all silver-mining centers in Spanish America, during the Wars of Independence. Refining plants were destroyed, maintenance of mines was neglected, and, after the wars, capital for restoration of productive capacity was scarce and dear. The Cerro itself, however, still yielded about half Bolivia's silver in 1846. And in the last quarter of the century Potosí mining again saw substantial recovery, though it was largely the doing of district mines, such as Huanchaca, 75 miles southwest of the town, which in 1895 yielded just over 1 million ounces. Bolivian silver mining had benefited in general from the availability of cheaper mercury once large amounts began to be produced in California in 1850. This price cut for the prime raw material needed for amalgamation encouraged investment in silver mining by Bolivians for the first time since Independence. Foreign engineers were also brought in to advise on technical renovation. The outcome, at Huanchaca, was enlarged orecrushing capacity, especially once steam-driven mills were installed in 1878, and improved methods of amalgamation. Potosí also benefited from the advice of foreign experts.
In the late 1890s a drop in the world price of silver severely depressed Bolivian silver mining. But at the same time world demand for tin was rising fast, a need that Bolivia, and particularly Potosí, was well endowed to meet. The department of Potosí proved to hold large and rich tin deposits, among the most famous of which was Uncía, 100 miles northwest of Potosí. Mining was developed there by Simón Iturri Patiño, the most famous of the Bolivian "tin barons," from 1897. Potosí shared in the tin boom, partly through extraction of tin ores from the Cerro Rico and partly through reprocessing of tailings (wastes) from silver refining, which proved rich in tin. Many tailings in Potosí have in fact been processed several times. Since the Bolivian Revolution of 1952, which nationalized the major tin companies, the large mines in the Cerro have been worked by the state mining company, Comibol (Mining Corporation of Bolivia), mainly for tin, though with some subsidiary product of silver. Enormous amounts of silver ore still remain in the Cerro, but they could be exploited profitably only by open-cast mining.
The great silver industry of colonial Potosí required many workers. From the late sixteen century on, about a half of these were wage laborers—Indians who found permanent employment in mines and refineries at a relatively high wage more desirable than other possible livelihoods. The other half, though, were native draftees, forced to work in mining and refining by the demands of the notorious Mita ("time" or "turn" in Quechua) set up in the 1570s by Don Francisco de Toledo, fifth viceroy of Peru. According to this system, some 13,400 adult male Indians came to Potosí each year from a highland catchment area reaching almost as far north as Cuzco. Each of them performed forced work in silver production for four of his twelve months' presence in Potosí. Many of these mitayos brought wives and children with them. These families often stayed on after the year was up, both men and women finding work in Potosí in a variety of possible jobs preferable to the long journey home. In this way, and because Potosí from the start offered much employment for Indians wanting to earn money for their tribute payments (among other things), the town's population grew fast. By 1600, it was very probably over 100,000. In the space of about fifty years, Potosí had become one of the world's most populous cities.
Most of this population was Indian, living in rancherías (native quarters) encircling the Spanish town center, with a particular concentration on the south side of the town beneath the Cerro. The sixteenth-century street plan of the center has changed little to the present. A rectangular pattern of streets, oriented north-south and east-west, extended out from the main plaza for three or four blocks in each direction. Mine and refinery owners, merchants, officials of the treasury and mint, town councillors, and priests lived here. Facing onto the central square were the main parish church of Potosí, the town hall, the mint, and the royal treasury offices.
Potosí had an estimated population of 768,203 as of 2005. Contrary to reports of its being a "ghost town," it is in fact an active administrative, marketing, and mining center. It is the capital of the department of Potosí, an area quite similar to the colonial mining district of which the Villa Imperial was the center. The department consists of parts of the western and eastern ranges of the Andes, with peaks approaching 20,000 feet, and the southern altiplano between them, at about 12,000 feet. It forms the southwestern corner of Bolivia, bordering on Argentina to the south and on Chile to the west. Apart from tin and silver, the department contains ores of bismuth, lead, copper, zinc, antimony, tungsten, and wolfram, some of which are worked.
Edmond Temple, Travels in Various Parts of Peru, Including a Year's Residence in Potosí (1830; repr. 1833, 1971). Philadelphia: E.E. Carey & A. Hart.
Lewis Hanke, The Imperial City of Potosí. The Hague: Nijhoff, 1956.
Cornelius H. Zondag, The Bolivian Economy, 1952–1965; the Revolution and its Aftermath. New York: Praeger, 1966.
Salomón Rivas and Raúl Carrasco, Geología y yacimientos minerales de la región de Potosí (1968).
Orlando Capriles Villazón, Historia de la minería boliviana La Paz: Banco Minero de Bolivia, 1977. Rose Marie Buechler, The Mining Society of Potosí, 1776–1810. Ann Arbor, MI: Published for Dept. of Geography, Syracuse University, by University Microfilms International, 1981.
Antonio Mitre, Los patricarcas de la plata: Estructura socioeconómica de la minería boliviana en el siglo XIX (1981).
Enrique Tandeter, "Forced and Free Labour in Late Colonial Potosí," in Past and Present 93 (1981): 98-136.
Peter Bakewell, Miners of the Red Mountain: Indian Labor in Potosí, 1545–1650. Albuquerque: University of New Mexico Press, 1984.
Jeffrey A. Cole, The Potosí Mita, 1573–1700: Cumpulsory Indian Labor in the Andes. Stanford, CA: Stanford University Press, 1985.
Gastón Arduz Eguía, Ensayos sobre la historia de la minería altoperuana. Madrid: Editorial Paraninfo, 1985.
Enrique Tandeter, Coercion and Market: Silver Mining in Colonial Potosí, 1692–1826. Albuquerque: University of New Mexico Press, 1993.
Mangan, Jane E. Trading Roles: Gender, Ethnicity, and the Urban Economy in Colonial Potosí. Durham, NC: Duke University Press, 2005.
Potosí was the most famous and most productive source of silver in the Spanish empire in the sixteenth and seventeenth centuries. Settlement on the site, deep in the eastern range of the Andes in southern Bolivia, dates from the discovery of silver ores in the Cerro Rico ("rich hill") of Potosí in 1545. Despite the great altitude (some 13,100 feet in the central plaza) the town grew quickly on moderately sloping terrain immediately north of the Cerro.
The Cerro contained the largest single concentration of silver ore ever discovered by the Spaniards in America. That deposit, augmented after 1600 by ores found over a large surrounding area, enabled Potosí to produce about half of Spanish America's silver output before 1650. Taxed production at Potosí by then totaled some 450 million ounces; true output was undoubtedly higher. By 1650, however, production had been falling for almost sixty years, and it continued to do so until the early decades of the eighteenth century. Some recovery took place from the 1730s onward; but by then Mexican mines, such as Zacatecas and Guanajuato, far exceeded Potosí in output.
Until about 1570 Indians were the main silver producers in Potosí. Spaniards who had staked claims generally rented them to native miners, who extracted ore and then smelted it using small, wind-blown furnaces of Andean design called wayras. By 1570, however, mines were growing deeper and the quality of ore lower; production consequently fell. The remedy came early in the 1570s with the transfer from Mexico of the amalgamation technique, by which silver was extracted from ore with mercury. This process allowed cheap processing of high volumes of poor ore. It required, however, large investment in refining mills, which native miners were unable to make. Hence from this time onward Spaniards controlled most aspects of silver production. Not only did Indians lose their earlier dominance in mining, they also found themselves impressed as workers in mines and refineries by the notorious mita: a Spanish development of the Inca practice of state-organized draft labor for tasks considered to be of public necessity. By the late 1570s this scheme brought to Potosí each year around 13,000 Indian working men drawn from native communities in the Andes over an area extending almost as far north as Cusco. The mita at Potosí, and one or two other central Andean mining sites, has long been taken as a symbol of Spanish maltreatment of Indians. It certainly was forced labor, which those subject to it—adult men—could avoid only with great difficulty. Working in the mines and the refineries was also hard and dangerous. Yet available records suggest that the mita was not responsible, as is still sometimes maintained, for the deaths of enormous numbers of native people. Disease was by far the larger destroyer of Indians in the Central Andes, as elsewhere in Spanish America.
The combination of amalgamation technology and abundant cheap (though paid) draft labor resulted in a boom. Potosí's output quintupled between the mid-1570s and 1592, the year of all-time highest production (according, at least, to tax records). In that year, some 7.1 million ounces of silver were refined. But by 1600 the downward trend in output had set in. Its prime cause was exhaustion of the easily accessible, rich ores near the Cerro's peak. Ore, generally poorer than before, now had to be dug and lifted from deeper mines. Flooding became a common problem. To these difficulties were added rising labor costs. Even before the end of the boom, the mita had not provided enough workers. Miners and refiners therefore began to hire additional waged hands (mingas), who by 1600 formed about half the labor force. Competition lifted their wages three or four times above those of the mita workers.
The eighteenth-century recovery of Potosí resulted from growing demand—and a higher price—for silver in the early 1700s, a cut in the Crown's royalty tax in 1736 from a fifth to a tenth, increased productivity forced from mita workers after 1750, and possibly the benefits of wide use of blasting to remove ore. Nonetheless, maximum production after 1700 barely reached half the level of the 1590s.
With the influx of workers, prospectors, traders, and artisans of all sorts, Potosí's population by 1600 probably exceeded 100,000. The town was, therefore, an enormous center of consumption. Mercury for refining came mainly from Huancavelica in Peru; large timber for machinery, from the eastern foothills of the Andes; coca, from the Cusco region; wheat, from the Cochabamba Valley and similar basins in the eastern Andes; wine, from the Peruvian coast; llamas, from the southern shores of Lake Titicaca; cattle and mules, from what is now Argentina. Productive regions up to several hundred miles from Potosí benefited from its large and varied demand. It was, indeed, the main source of economic stimulus for much of central and southern Spanish South America. Large volumes of varied goods arrived constantly in Potosí on the backs of llamas and mules—animals equal to the rugged challenge of the Andean terrain.
Clearly some of the silver produced in Spanish America was retained locally as domestic plate and church decoration. Far more—by one estimate about a half—went into intra-colonial trade. Use of Potosí's silver for exchange became simpler once a mint was founded there in the mid 1570s; it provided most of South America's coin. The rest of Potosí's production, as coin or bar, flowed outward along various trade routes. In law, the west coast of South America could trade directly only with Panama and a few other ports in western Central America and Mexico. Much of Potosí's output was indeed carried by registered ships to the Isthmus of Panama, and there transferred to Spanish transatlantic fleets that took it to Seville in southern Spain. Much, also, from the 1570s onward went first to Acapulco, in western Mexico, thence to Manila, and from there, in exchange for multifarious goods, to Japan, China, and parts of Southeast Asia. The high value placed on silver in China during much of the Spanish colonial period brought high profits to those who had silver to exchange. Coins struck in Potosí but separated, as it were, in early life must often have been reunited in the Orient after half-circling the globe in opposite directions—some westward via the Manila galleons, and others eastward through Portuguese, Dutch, or other European trading ventures with Asia.
Much Potosí silver evidently arrived at its final destination illicitly (in the view of Spanish law). The leakage of the metal southward to Buenos Aires and thence to multiple destinations around the Atlantic (including Brazil, in exchange for black slaves) proved impossible to block. Equally uncontrollable was the export of unregistered (and generally untaxed) silver in officially approved ships, often with the connivance of officials. The Manila galleons were notorious for carrying silver bullion far in excess of the limits that the Crown, anxious to keep precious metal in Spanish hands, imposed. The same happened in the official transatlantic trade with Spain.
As the largest source of silver in the empire before 1700, Potosí naturally received the close attention of the viceroys of Peru (resident in Lima). More immediate supervision came from the Audiencia (high court) of Char-cas, sited in La Plata (now Sucre, Bolivia) and from the treasury officials present in the town itself.
SEE ALSO Antwerp; Argentina; Barcelona; Board of Trade, Spanish; Bullion (Specie); CÁdiz; Chile; China; Columbus, Christopher; Conquistadors; Empire, Spanish; Encomienda and Repartimiento; Gold and Silver; Gold Rushes; Imperialism; Import Substitution;Laborers, Aztec and Inca;Laborers, Coerced;Lisbon;Magellan, Ferdinand;Mercantilism;New Spain;Peru;Philippines;Seville;Smuggling.
Arzáns de Orsúa y Vela, Bartolomé. Historia de la Villa Imperial de Potosí. 3 vols. Ed. L. Hanke and G. Mendoza L. Providence, RI: Brown University Press, 1965.
Bakewell, Peter. Miners of the Red Mountain. Indian Labor in Potosí, 1545–1650. Albuquerque, NM: University of New Mexico Press, 1984.
Cole, Jeffrey A. The Potosí mita, 1573–1700. Compulsory Indian Labor in the Andes. Stanford, CA: Stanford University Press, 1985.
Flynn, Dennis O., and Giraldez, Arturo, ed. Metals and Monies in an Emerging World Economy. Aldershot, U.K.: Variorum, 1997.
Tandeter, Enrique. Coercion and Market. Silver Mining in Colonial Potosí, 1692–1826. Albuquerque, NM: University of New Mexico Press, 1993.
Founded in 1547 at a height of over 4,000 meters (13,123 feet) in Upper Peru (modern Bolivia) and, until 1776, one of the Spanish kingdoms in the viceroyalty of Peru, the rich and imperial town of Potosí (a title granted by Philip II [1527–1598] in 1561) was the world's premier silver producer for two centuries. Its population grew to 100,000 by 1600 as it drew in prospectors, adventurers, laborers (free and coerced), functionaries, artisans, merchants, and many others attracted by the wealth generated by the abundant silver deposits of the Rich Hill above the town.
In its peak period, 1550–1630, registered production totalled 372 million pesos or ounces (compared with 90 million at its nearest rival, Zacatecas, Mexico's principal producer). These figures understate real production because an unquantifiable, but vast amount of contraband avoided registration and, thereby, payment of taxes, of which the most significant was the quint (20 percent). Potosí's preeminence was made possible by three factors: the abundance of rich ores, a guaranteed supply from nearby Huancavelica (in Central Peru) of mercury, essential for the refining process, and up to 14,000 a year native conscripts from surrounding provinces, following the implementation of the mita system by viceroy Francisco de Toledo (1515–1582) in 1573. Depopulation in the contributing provinces was one factor leading to a gradual fall in output after 1700 (when total viceregal production, including that from other centers, was 4 million pesos). The reduction in 1736 of the quint to 10 percent stimulated growth and eventually annual output stabilized at about 3 million pesos.
After the middle of the seventeenth century (when Dutch, French, and British ships began to penetrate the Pacific with increasing impunity, both to attack settlements and to trade, despite Spain's attempts to maintain a commercial monopoly) the Crown's share of this silver was used increasingly to meet the rising costs of defense and administration within the viceroyalty. However, the bulk of the private silver produced at Potosí continued to be remitted to Spain—until the early eighteenth century via the Isthmus of Panama, thereafter via Cape Horn—in exchange for manufactured goods (many of them of non-Spanish origin) and the traditional viticultural and agricultural products of the mother country.
Even in the late eighteenth century, when Spain was making strenuous efforts to promote the more systematic exploitation of South America's potential as a supplier of agricultural and pastoral products to international markets, silver represented almost 90 percent of the value of Peru's registered exports, much of which continued to flow to Lima from Potosí despite the fact that in 1776 Upper Peru was transferred to the newly-created viceroyalty of the Río de la Plata, governed from Buenos Aires. In exchange, Peru continued to supply Potosí with imported manufactures (including Chinese silks and porcelain that reached Lima via Manila-Acapulco), and a wide range of locally produced commodities, including sugar, brandy, coca, and coarse textiles. Potosí also acted as a magnet, whose silver drew in supplies from a wide range of networks of regional and intercolonial trade: for example, mules and hides from Tucumán and Córdoba (in modern Argentina), wheat from Chile, tea from Paraguay, and black slaves imported through Buenos Aires.
The formal opening of the new viceregal capital to direct trade with Spain in 1778 diverted some of the registered silver production of Potosí from Pacific to Atlantic trade routes. However, the cultural and economic ties between Upper Peru and the rump viceroyalty of Peru remained strong, and the region as a whole resisted the repeated attempts of Buenos Aires to retain political control there after the overthrow of the viceregal regime in Buenos Aires in 1810. Although the eventual solution to more than a decade of fighting would be the creation of an independent Bolivia in 1825, the struggle to achieve this led to a total collapse in activity at Potosí from 1813 to 1815 as a result of the flight of labor, destruction of equipment, and flooding. Recovery from 1816 to 1820 was only partial, with annual production averaging 1.5 million pesos. This level was sustained until the late nineteenth century when silver gave way to tin as the mainstay of Potosí's economy.
Bakewell, Peter. Miners of the Red Mountain: Indian Labor in Potosí, 1545–1650. Albuquerque: University of New Mexico Press, 1984.
Cole, Jeffrey A. The Potosí Mita, 1573–1700: Compulsory Indian Labor in the Andes. Stanford, CA: Stanford University Press, 1985.
Sempat Assadourian, Carlos, et al. Minería y espacio económico en los Andes, siglos xvi-xx. Lima, Peru: Instituto de Estudios Peruanos, 1980.
Tandeter, Enrique, Coercion and Market: Silver Mining in Colonial Potosí, 1692–1826. Albuquerque: University of New Mexico Press, 1993.
Villa Rodríguez, José, ed. Potosí: plata para Europa. Sevilla, Spain: University of Sevilla, 2000.