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Lia Hudgins

Teague

AP World History

05 April 2019

Silver and Its Impact on Global Economy

The mid sixteenth century marked the start of the major global flow of silver that spread

all over the world from Spanish America. Major silver mines were located in South America and

Middle America, but silver quickly began to spread as far as China and Japan. Most of the

world’s supply ended up in China. China used silver to increase their power and wealth, but

ended up causing negative results by issuing a tax law that demanded all taxes be paid in silver.

In Spain, silver was used to support their empire by giving them wealth. Silver was also used in

Spain to fund their military and political expeditions to the Americas. They ended up having

such a large amount of silver that when global inflation of silver occured, Spain lost most of the

power they had gained. Japan used silver in the most beneficial way by using their wealth to

develop new technologies, ideas, and help spread their culture around the world. In most

empires, silver had more negative effects than positive. Although silver was beneficial in some

ways, it ended up causing economical problems on the global scale.

China seemed to be benefitting, but in the end, they only caused harm to their

environment. The Chinese had an advantage in their use of the Philippines to trade silver coins,

(Doc 7) so they were able to get most of the silver in the world through that and just through

exporting, even if the silver was being produced in Bolivia. (Doc 1) Over time, silver became so

beneficial to them, they introduced a tax on it. When a country wanted to trade with China, they
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had to pay in silver for their goods. Since there was such a surplus at the time, they were

exporting regularly in agriculture as well. This eventually became such a priority that when

silver later became scarce and China no longer needed to rely on it, the soil was depleted and

there was mass deforestation. The Chinese were left with a failing economy and environment.

The Spanish faced mass economic fail as a result of the way they handled the silver trade.

Most silver was being exported from Bolivia (Doc 1) and the mass amounts that didn’t go to

China went to Spain, which had control over the area. Spain was profiting very much from this

and became greedy in their conquest and in their use of the precious metal. They were Roman

Catholic, and used this as justification as to how they were treating the natives. This form of

slavery as a primary result of their conquest of the area allowed circulation of this metal to

constantly stay up. Spain was also not paying taxes on this silver, they were just hoarding it

economically. (Doc 6) Eventually, this led to their demise. There was so much silver in Spain

that it ended up causing inflation globally, but Spain was obviously affected the most as a result

of their hoarding of the silver.

The Japanese handled silver the best. They engaged in trade with China, one of the

nations that faced major negative impact, the most. They received much silver but used it wisely

as they did not hoard it nor induce a tax that revolved around it like the Spanish or the Chinese.

They would also trade away the silver and in return import many valuable or expensive things.

(Doc 4) The also used it evolve important things in their nation, such as military technology and

governmental issues within. In the end, the Japanese did not face any major negative results as
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their neighbors in trade did, because of the way that they were able to handle the income of the

precious metal.

Every nation handled the silver boom in different ways. Spain, which ultimately had the

most control, took too much and gave too little back, not only to the slaves they utilized to obtain

silver, but also to the people. They ended up suffering the most from inflation, even if it was a

global issue. The Chinese got even more than the Spanish, and their downfall came with the

beginning of their silver tax. Eventually, they were paying their workers in silver, and this led to

a need to export. China left the silver boom with mass economic and environmental destruction,

which included the Philippines they were working through. Luckily, we had the Japanese. Japan

used silver as a way to reform and better itself as a nation. They were not harders and not caught

up in the trade, in fact, they used to their advantage, realizing its use and using it to import many

useful things and fix their economy. Silver circulation and trade could’ve had better effects if it

had been handled better on a larger scale. But people in history were greedy, as they are still

greedy now, and silver was just another instance of when the majority of people did not get it

right.