New World Gold: Cultural Anxiety and Monetary Disorder in Early Modern Spain

279 Pages·2010·2.09 MB·English

by  Elvira Vilches

New World Gold
Cultural Anxiety and Monetary Disorder
in Early Modern Spain
E L V I R A V I L C H E S
The University of Chicago Press
Chicago and London
ELVIRA VILCHES is associate professor of Spanish at North Carolina State University.
The University of Chicago Press, Chicago 60637
The University of Chicago Press, Ltd., London © 2010 by The University of Chicago
All rights reserved. Published 2010
Printed in the United States of America
19 18 17 16 15 14 13 12 11 10 1 2 3 4 5
ISBN-13: 978-0-226-85618-6 (cloth) ISBN-10: 0-226-85618-6 (cloth) The University of Chicago Press
gratefully acknowledges the generous support of the Program for Cultural Cooperation between Spain’s
Ministry of Culture and United States Universities toward the publication of this book.
Library of Congress Cataloging-in-Publication Data Vilches, Elvira.
New World gold: cultural anxiety and monetary disorder in early modern Spain / Elvira Vilches.
p. cm.
Includes bibliographical references and index.
ISBN-13: 978-0-226-85618-6 (cloth: alk. paper) ISBN-10: 0-226-85618-6 (cloth: alk. paper) 1. Spain—
Economic conditions—16th century. 2. Spain—Economic conditions—17th century. 3. Economics—Spain
—History—16th century. 4. Economics—Spain—History—17th century. 5. Gold—Spain—History—16th
century. 6. Gold—Spain—History—17th century. 7. Credit—Spain—History—16th century. 8. Credit—
Spain—History—17th century. I. Title.
HC385.v4725 2010
330.946′04—dc22
2009052401
The paper used in this publication meets the minimum requirements of the American National Standard
for Information Sciences—Permanence of Paper for Printed Library Materials, ANSI Z39.48–1992.
Para Jordi, norte de mis caminos, estrella de mi ventura
Contents
Acknowledgments
Introduction: Money, Credit, and Value
1. New World Gold
2. Selling the Indies: Columbus and the Economy of the Marvelous
3. Gold: A Problematic Standard
4. The New World of Money
5. Writing about Debt
6. The Indies, Value, and Wealth
Conclusion: A Remote and Exotic Geography
Bibliography
Index
Acknowledgments
The research for New World Gold has benefited from the generous support of
several institutions. The American Council of Learned Societies made it possible
for me to spend a full academic year at the Library of Congress as an
International Studies Fellow. I am also indebted to the John Carter Brown
Library for funding a fellowship in Comparative New World Studies. I thank the
staffs of both institutions. Special thanks go to Prosser Gifford and Les Vogel of
the John W. Kluge Center at the Library of Congress, as well as Susan Danforth,
Michael T. Hamerly, and Richard J. Ring of the John Carter Brown Library. The
College of Humanities and Social Sciences at North Carolina State University
granted me research funds to conduct research at the Archivo General de Indias
in Seville.
Rolena Adorno, Walter Cohen, and Mary Gaylord nurtured the initial stages
of this project. Through the years, Walter and Mary have been the kindest of
mentors and sharpest of readers. Mary read the whole manuscript and offered
invaluable criticism and guidance. María Mercedes Carrión, Harry Vélez-
Quiñones, and Alison Weber read the whole manuscript and provided important
insights. Also, this project owes much to the two anonymous readers at the
University of Chicago Press for their incisive criticism, priceless comments, and
thoughtful suggestions that, without doubt, have improved this book. My deepest
thanks are due to Randy Petilos, my editor at the University of Chicago Press,
for his commitment to this book, his kindness, and his great patience during the
writing and revising of this book.
During the research for this project, I have been fortunate to benefit from
discussions and conversations with caring friends and wonderful colleagues:
Laura Bass, Diane Cady, José Cartagena-Calderón, Anne Coldiron, Enrique
García Santo-Tomás, Margaret Greer, James Iffland, Domingo Ledezma,
Gerardo Leibner, Kathleen Lynch, Gabriela Nouzeilles, Ricardo Padrón, and
Carla Rahn Phillips. Natasha Chang and Gina Herrmann read portions of the
manuscript and provided invaluable comments, advice, and sustained
enthusiasm. John Tallmadge has been my most constant, demanding reader, a
supportive critic, a great mentor, and a conscientious editor. Stephanie Sieburth
supported me through the writing process with infallible enthusiasm and
precious guidance. Louise Salstad generously and meticulously read the whole
manuscript, corrected my translations, and provided much joy and
encouragement. David Guy, Liz Moore, Patricia Phelan, John C. Pittman,
Michael Sharp, Ángela González, and Dennis Vélez helped me with their
wisdom, kindness, and friendship in more ways than they can imagine. Thank
you also to Darby Orcutt, the collection manager at D. H. Hill Library, and to
my colleagues at North Carolina State University.
I greatly value the patience of my family, whose love has been an inestimable
source of happiness and devoted affection. Completing this book would have not
been possible without Jordi Marí, my loving husband and best friend. This book
is for him.
Earlier versions of portions of chapter 1 appeared as “Columbus’s Gift:
Representations of Grace, Wealth and the Enterprise of the Indies” in MLN 119
(2004): 201–25; and as “The Economy of the Marvelous: Columbus’s
Transatlantic Tokens of Exchange,” in New Perspectives in Transatlantic
Studies, ed. Heidi Slettedahl Macpherson and Will Kaufman (Lanham:
University Press of America, 2002), 15–26. Drafts of both chapter 1 and sections
of chapter 3 were presented at the International Seminar of Atlantic History at
the Department of History at Harvard University and profited greatly from the
discussion.
Introduction: Money, Credit, and Value
During the sixteenth and seventeenth centuries, there was an explosion of
economic writing in Spain. The proliferation of treatises, tracts, and memorials
on usury, commerce, and political economy was marked by two major events:
the price revolution, which began in the first decades of the sixteenth century;
and the fiscal crisis that lingered as the series of royal bankruptcies expanded
from 1557 to 1653. Theologians pondered the sudden escalation of prices, which
they linked to the development of a sophisticated financial credit system, and the
shower of American gold. Mercantile authors discussed measures to save the
national economy and debated why the imports of American bullion had brought
ruin instead of fortune. As theologians and political economists grappled with
the effects of the credit economy, they looked at a host of monetary experiences
that, although they were not completely new, surprised everybody. No one could
imagine that a kingdom that owned the wealthiest gold and silver mines of the
Indies would ever face poverty, scarcity, and debt.
Settlers in the Indies and people in Castile witnessed that gold, either as
bullion or in the form of money, did not stand as a reliable center of value.
Castilian society observed how the number of money changers and brokers
increased, as commercial transactions grew larger and became obscure. Society
also witnessed how commerce resulted in a swift accumulation of monetary
wealth that surpassed both the value of the awe-inspiring cargoes of the treasure
fleet and the worth of large land holdings. Likewise, Castilians saw annuities
become popular investments, once the Castilian firms went under and Genoese
financiers took control.
The most popular forms of credit in Habsburg Spain included extended
payment terms for the sale of merchandise, credit sales, and the censo, which
consisted of annual percentage payments for larger sums. Creditors included
religious orders, institutions, and private citizens. People from all walks of life
contracted censos to borrow money in order to sustain farming, purchase
property, arrange extended payment terms for dowries, or manage debt. These
ordinary credit practices coexisted with more sophisticated commercial forms of
entrepreneurial credit, generally referred to as exchange. In the expanding credit
economy, financiers and merchants used exchange to transfer funds between
locations and currencies, not for any specific need, but simply to accumulate
interest while, temporarily, using someone else’s money. In this way, financiers
profited from credit, borrowing, and speculation.
The economic writing of the period held that, despite the obvious differences
in the art of exchange and censos, they were, nonetheless, closely linked. As the
commercial boom of the first half of the century began to contract and foreign
banks extended their control, smaller financiers sought economic security in
censos and short-term, high-interest loans to the upper nobility. As the economy
weakened, both exchange and censos came to be despised as a source of
unremitting indebtedness and ruin. Debtors had their property seized, while
creditors secured their landed property and entered the ranks of the nobility.
Late scholastic economic thinkers viewed credit, finance, and speculation as
challenges to the principles of distributive justice, the interdicts of usury, and
received notions about money and value. In their treatises, they joined the
outcries expressed from both pulpit and Parliament about money lenders and
exchangers burdening the gentry, small merchants, and peasants with debts.
Mercantilist authors debated the failing health of the national economy and
scorned the bourgeois for seeking profits and status in nonproductive
investments.
Colonial disappointments regarding gold, inflation, the credit economy, and
the fiscal crisis revealed preoccupations about how to guarantee and represent
the center of value. Spanish society managed this problem in various ways,
including representing the crisis in different forms of writing. Rather than being
unique to economic writing, this task involved a large corpus that integrated
economic treatises with literary figurations, New World historiography, and
documentation and pamphlets concerning the treasure fleet. This array of
discourses engaged not only all sorts of monetary tokens, such as coins and
credit instruments, but also, and more importantly, strove to mediate value,
palliate the loss of meaning, and restore truth in value.
Early modern Spanish culture embraced the spirit of advancing capitalism,
while remaining, paradoxically, attached to gold as a substance of intrinsic
value.1 The overwhelming spectacle of treasures from the Indies seemed at first
to materialize such a notion. But if treasures generated wonder, they also created
confusion and distress, as gold—supposedly an object of everlasting value—
began to fluctuate in an array of scenarios that spread to both sides of the
Atlantic. In the Indies, the quest for gold revealed that the valued metal was not
only more scarce and difficult to obtain than had been expected, but also more of
a symbolic commodity and a problematic standard of value. The New World
exposed monetary disarrays that would soon reappear in Castile on a larger
scale: the surprise of conquerors and settlers preceded the outcries about the
weakening purchasing power of money at the Cortes. In Spain, the influx of
American treasure brought unheard of wealth along with a maze of monetary
phenomena that, while not altogether new, struck people as strange, disturbing,
and intractable. Money was at once an agent of social mobility as well as an
object of suspicion and mystery as it shifted from a medium of exchange to an
emblem of abstract value.
This book explores the impact of American gold on early modern Spanish
culture in light of the economic writing that flourished with the age of
mercantilism in Spain. American gold raised doubts about the assurance of truth
in value that money represented as a claim upon society; New World Gold:
Cultural Anxiety and Monetary Disorder in Early Modern Spain traces the
genealogy of this problematic of representation as it develops with the quest for
gold, the credit economy in the first half of the sixteenth century, and the fiscal
crisis that materialized in the 1590s.2 Preoccupation with the vagueness of
monetary tokens such as gold, coin, or credit went beyond the economic writing
of the period and resonated across different forms of cultural production of early
modern Spain. Late scholastic writers proposed that money was losing value
because of the abundance of American bullion. As the chronic deficit became a
major source of concern, economic writing concentrated on salvaging the wealth
of the nation. These economic investigations on money, credit, and value were,
in turn, bracketed by the efforts of both chroniclers and literary writers to
exemplify the goodness of gold. To the cultural scholar, these documents and
treatises also dialogue with colonial texts and literature, forming a continuum of
writing that responded to the problematic of representation that such dramatic
monetary shifts provoked.
The oscillations of value between the Indies and Castile astonished
conquistadors and royal officials alike. Castilians admired the flood of treasures,
worried about the swift expansion of commerce, and speculated as to whether
money had, in fact, gotten out of control, as prices went through the roof, on the
one hand, and virtue, merit, and truth succumbed to the new market model of
value, on the other. The lure of American gold created a commercial boom of
unprecedented proportions. As both continental and Atlantic trade expanded, so
did the number of banks, the money market, and the credit instruments that had
been in place since the fourteenth century.
The new sophisticated credit system had a disorienting effect. To most people,