Authors: Timothy Brook
Vermeer's Hat (25 page)
The importation of silver on this scale highlighted the awkward distance in China between public policy and private commerce.
On the one hand, the Ming court did everything it could to restrict the mining of silver, fearing the corruption and the social
instability it believed would arise within mining communities. On the other hand, merchants were importing vast quantities
of silver into south China. When the writer Feng Menglong was serving as a county magistrate in northern Fujian in the 1630s,
he strengthened the military cordon around the seven silver mines in the county, which had been closed by imperial order a
century earlier. How ironic that Feng should be exercising his vigilance to keep vagabonds from digging in the old silver
pits, while at the other end of the province merchants were bringing in American silver by the ton. But that was the internally
contradictory situation in which China found itself in the first half of the seventeenth century. The government worked to
discourage the private accumulation of wealth among the socially marginal for fear that this wealth might feed the forces
of rebellion, while private mercantile families amassed vast fortunes by trading abroad.
Silver flowed easily into the Chinese economy because it was needed to supplement the small bronze coins that were used for
small transactions. It was the standard form of money; it was also the form in which the Ming regime collected taxes. The
amount of silver coming into China was so great that the Chinese believed its supply was endless. They also assumed that the
foreigners, by controlling that supply, were in the enviable position of buying whatever they wanted at no real cost to themselves.
Chinese converts to Christianity, in fact, suggested this very strategy to Franciscan missionaries. “As people by nature love
profit, if you give silver to everyone, there won’t be a single person who doesn’t follow” your teaching. Pedro de la Piñuela,
the Franciscan missionary who inserts this conversation into a model dialogue, offers the expected response first. “This is
not following a teaching; it is following silver.” But then he turns to the practical problem that his order doesn’t have
an endless supply of silver to hand out. “If people come for the sake of silver, then the situation is such that when the
silver runs out, they will go. Since there is a limit to the silver from the West, and since people’s avarice is inexhaustible,
then once the silver you give them runs out, won’t their desire for the Way, like the silver, run out as well?” And run out,
or at least down, it would, as we shall see.
While the supply lasted, silver gilded the Chinese world. It created a potential for accumulation and liquidity that encouraged
ostentatious spending and social competition. Those who could afford the new culture of wealth embraced its arrival and took
pleasure in spending vast amounts of silver on expensive goods, antiques, and mansions. This new wave of luxury spending excited
a powerful backlash just after the turn of the seventeenth century, however. Among conservative elites, silver became a lightning
rod for frustrations and an occasion for dire warnings about the decay of the age. Magistrate Zhang Tao was one of those appalled
by the silver economy. In 1607, Zhang was posted to an inland county south of the Yangzi River that happened to be home to
some of the greatest commercial families of the age. It was a bad match. By 1609, Zhang was fulminating in a local publication
about easy money, flamboyant display, and moral poverty. The ethical foundations that once held society together were crumbling,
and the reciprocal duties that had once sustained village life were no longer observed. He blamed it all on the lust for silver,
the one overwhelming passion that now consumed people’s hearts. Silver could not be an innocent medium for storing wealth.
By its very nature, as something without fixed use or real value and infinitely exchangeable for all other goods, silver gave
the rich free rein to amass personal fortunes while depriving the poor of the means to survive. The unfortunate result was
that “one man in a hundred is rich, while nine out of ten are impoverished.” The result, in Zhang’s baleful summary was, that
“the Lord of Silver rules heaven and the God of Cash reigns over the earth.”
Blaming silver may have felt satisfying, but by the turn of the seventeenth century, any proposal to curb the use of silver
was pointless. Silver was so thoroughly a fact of daily life that no one gave it any thought, except when he didn’t have enough
silver to acquire what he needed to subsist. When that happened—and it happened often enough in the later years of the Ming,
when colder temperatures and epidemics threatened the dynasty’s survival—they too were willing to cast silver as the villain
in the economy. Zhang Tao’s frustration at the power of the Lord of Silver may be linked to his very first experience as a
county magistrate. When he arrived to take up his post in 1607, he found the price of rice rising because the spring rains
had washed away the local crop. In normal times, the price of rice per Chinese “peck” (
dou
, a unit volume equal to 10.75 liters) stayed under half a “mace” (one
qian
was a unit of silver weighing 3.75 grams). But as the spring wore on, Zhang watched the price almost triple to 1.3
qian
(4.6 grams). At that point, he stepped in and released the stocks of rice in the county granary at below-market rates. This
intervention forced down the market price and eased the crisis for long enough for the circulation of commercial grain to
resume at close to regular prices. Zhang regarded the local reliance on silver as the cause of the problem. In his view, were
there no silver in the local economy, the price of rice would not have risen to the level it did.
Was the increase in the stock of silver circulating in China driving up prices? Economic logic argues that an increase in
money supply should have had an inflationary effect, but it is difficult to detect this from the available evidence. What
is not difficult to detect is the wild price inflation during the mounting subsistence crises of the early 1640s. Before the
seventeenth century, a local crisis might double or even triple the price of rice, but no more. The brief exceptions came
in the 1540s and again in the 1580s, when the price went beyond an informal price ceiling of 6 grams of silver per decaliter.
In the 1620s, that ceiling started to move. In 1639, according a Shanghai resident, a peck of rice was commanding a price
of 1.9 mace (6.6 grams per decaliter). “However,” the same memoirist goes on to note, “it was nothing like what happened
in the spring of 1642.” The value of currency collapsed, driving a peck of white rice up to 5 mace (17.5 grams per decaliter).
The price in Shanghai stabilized for a few years in the elevated range of 7 to 10 grams per decaliter, then in 1647 shot up
to 14 grams. These prices were only for those who had the silver to pay them, of course. For those who had none, the only
currency that could buy rice was children. In a market southwest of Shanghai in 1642, the human price of a peck of rice—barely
enough to feed one person for a week—was two children. China did not experience another crisis in the value of money this
severe until the twentieth century.
What devastated China in the 1640s was not its monetary system so much as the impact of cold weather, and with it, virulent
epidemics, falling grain production, and huge military spending to hold back the Manchus to the north. Nonetheless, people
at the time felt that money played a part. Some of the great minds of the years following the collapse of the Ming dynasty
in 1644 blamed silver (that “perfidious metal,” as one called it) for harmful, negative economic behavior, such as hoarding,
that undermined stability for the poor and encouraged wasteful extravagance among the rich. As for silver’s effect on state
fiscal administration, according to one analyst of the period, “Depending on silver to enrich the state is like resorting
to wine to sate one’s hunger.” Silver had attained a role it never should have had.
Economic historians have recently suggested that another factor may have been at work—that prices were being forced up in
the late 1630s and early 1640s not by the long-term increase in the supply of silver, but by a short-term contraction. The
flash point was Manila.
THE TRADE BETWEEN THE SPANISH and the Chinese in Manila always had balanced on a delicate pivot. Small crises of supply or
liquidity could excite a larger crisis of confidence, shutting the whole operation down. This is what began to happen in 1638.
Nuestra Señora de la Concepción
, the largest ship the Spanish had ever built, was the eastbound galleon leaving Manila that summer. Monsoons delayed its
departure, and when the
Concepción
finally did sail, its commander strangely decided to take the incoming route just above the equator, rather than follow the
standard northerly route up to Japan and then head east from there to the coast of California. The ship was loaded with a
declared cargo worth four million pesos. It also carried a large undeclared cargo. Although the Spanish governor of the Philippines
had recently been taking an active interest in reducing smuggling on the galleons lest exports go untaxed, in this sailing
he had a direct interest in letting it go undeclared.
Sebastián Hurtado de Corcuera was posted to Manila as governor in 1635 after eight years’ service in Peru, first as a garrison
commander (he had previously distinguished himself as a member of the council of war in Flanders fighting the Dutch), then
as treasurer. His transfer to Manila took him through Acapulco, where he was stunned at the scale of corruption around the
galleon trade. Writing back to Philip IV the following year, he observes, “I think it would be better to use angels rather
than men” to run places such as Acapulco. Unless “the most disinterested and zealous in Your majesty’s service” are appointed,
“the royal treasury will pay for it, for in order to make 1,000 pesos an official must steal 10,000 from the king’s vassals
and the treasury suffers.” Three years later, hoping to beat Acapulco at its payoff game, Corcuera prevented a proper manifest
of the cargo on the
Concepción
from being compiled. Without a manifest, he figured, the inspector in Acapulco would not be able to take his usual cut.
Corcuera’s concern to protect the cargo of the
Concepción
went too far, for he overlooked competent senior officers and entrusted the galleon to his favorite nephew, Pedro, a young
man with no experience in navigation or command. Pedro’s nominal authority collapsed as soon as the ship was out of Manila
harbor. On 20 September 1638, the
Concepción
was threading its way through the Mariana Islands, which lie about a quarter of the way between the Philippines and Hawaii
(no European would discover those islands until James Cook wandered into them a century later). The officers were so busy
arguing among themselves that the galleon went off course and struck a submerged reef, spilling its cargo across the coral
beds. Of the four hundred people on board, a few dozen got to shore and lived to tell the tale. The ship’s cargo, which Corcuera
had been so anxious to keep hidden, was beyond salvaging. Beachcombers today can still pick up shards of Ming porcelain along
the shore where the ship went down.
The destruction of the
Concepción
could have been borne more easily had the same disaster not repeated itself. It did so the following spring when the incoming
galleon
San Ambrosio
, laden with silver, foundered off the east coast of Luzon. The outbound galleon back to Mexico that summer also sank, this
time off the coast of Japan. These three sinkings crippled trade in Manila. The entire system teetered on the edge of collapse.
In terms of silver production in Spanish America, the timing could not have been worse, for the supply of silver that funded
the transpacific exchange had begun to contract. Silver production in Potosí was already slipping in the mid-1610s, and by
the 1630s it was not possible to produce enough silver to cover all the purchases that Spanish merchants were making in Manila.
Desperate at the prospect of declining revenues, the municipal councillors of Potosí sent someone to Madrid to plead with
the Spanish court for financial help. Potosí “until recently has supported the full weight of the Monarchy with its great
riches,” their representative declared in an open letter. Grant the silver producers of Potosí some sort of fiscal concessions
to keep production going, the councillors pleaded.
The downturn in South America coincided with new restrictions on Europeans trading with Japan, the other major source of silver
for China. The Portuguese based in Macao had enjoyed a lock on this trade for decades, but when Japan came under a centralized
authority in the 1620s, it chose to restrict foreign access. The new Tokugawa regime banned Japanese from going abroad as
of 1635, and pressured the Portuguese to stop bringing Europeans to Japan, especially missionaries, whom the Tokugawa regarded
as agents of sedition. The Tokugawa severely restricted Christianity in 1637, declaring that foreign missionaries who entered
the country did so on pain of death. A Jesuit close to Governor Corcuera went in disguise to Japan later that year, but was
soon exposed, tortured, and beheaded for flouting this law. When a Portuguese ship showed up in 1640 in the hope of reopening
trade, most of the crew were executed, leaving a few to return to make it clear back in Macao that no more Portuguese would
be welcome. Macao never fully recovered from this loss and dwindled into a colonial backwater. Thenceforth, the only Europeans
permitted to continue trading in Japan were the Dutch, and then only from a tiny island in the harbor of Nagasaki under tight
restrictions.
To make matters worse for Manila, when a new emperor came to the throne in China in 1628, his government, tired of Dutch piracy,
reimposed its earlier prohibition on maritime trade. For two years, trade at Manila stagnated, then revived to former levels.
But when the ban went back into effect in 1638, the traffic to Manila fell from its record high of fifty junks in 1637 to
sixteen. The faction in Beijing that favored an open border gained the upper hand at court the following year and got the
maritime prohibition lifted, but then when thirty well-stocked junks showed up in 1639, the sinking of the
San Ambrosio
meant that there was not enough silver to buy the cargoes. On top of that, for three years running, the viceroy of New Spain
had been trying to staunch the flow of silver by clamping down on Chinese imports into Acapulco. He viewed the swapping of
silver for cheap Chinese imports as a drain on his economy that benefited no one but the merchants in Manila. This was another
reason why Corcuera made sure there was no manifest for the goods on the
Concepción
. He was trying to get around the new restrictions.