PotosÍ

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.

BIBLIOGRAPHY

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.

Peter Bakewell