of metals from the New World by means of exporting the overplus to the East. The drain of silver to the East, discernible from the very birth of European commerce, has been the salvation of Europe, and in providing for it Antwerp acted as the safety-valve of the sixteenth-century system, as London has done since. The importance of the change of the centre of gravity and exchange from Venice to Antwerp lies therefore in this fact. Under the old system of overland and limited trade, Venice could only provide for such puny exchange and flow as the mediæval system of Europe demanded. She would have been unable to cope with such a flood of inflowing metal as the sixteenth century witnessed, and Europe would have been overwhelmed. But the foundations of the commerce of the Netherlands were laid wider. Together with Portugal she opened an extensive empire along the coasts of Africa and in the Indian East; and the very time which gave birth to the revolution in the production of the precious metals in America saw provision made for the regulation of its outflow through the commerce and exchanges of Antwerp to India. In the modern system this would be a theoretically perfect world-mechanism, and its working would be normal and healthy, and the safest indicator of commerce. That it was not so to seventeenth-century Europe was simply due to the existence of a disordered, understood bimetallic system, and the crisis to which the working of this mechanism brought her has
perhaps not been since equalled at any point of time.
The underlying causes of this crisis have been already described. The currencies of the trading nations of Europe were all unconsciously bimetallic. Throughout, there was in existence one class who grasped the fact without any knowledge of the theory, and profited by it—the merchant exchangers. There was constant oscillation—change of ratio, and the least alteration of the condition of one metal made it a lever for operations upon the other. These operations were arbitrage merely. They had no relation to the ebb and flow of commerce as modern arbitrage transactions have. It was a financier's opportunity of private gain, and for private gain the system was worked. The ebb and flow of European currencies, which the sixteenth and seventeenth centuries witnessed, were as unnecessary (i.e. for the purposes of her commerce) as they were disastrous.
It is sufficient to indicate the tendency of this argument, and to leave the illustration of it to the following pages.
PRODUCTION OF THE PRECIOUS METALS
To return to the yield of precious metals during the years under discussion. Any estimate must be conjectural, in the absence of the accounts of the Spanish Mints.[9] This understood, it may be thus tabularly represented.
| Date. | Annual Average Production of Gold. | Annual Average Production of Silver. | Proportion of Gold in Total. | Proportion of Silver in Total. |
|---|---|---|---|---|
| 1493-1520 | £800,000 | £600,000 | 57% | 43% |
| 1521-45 | 1,000,000 | 1,100,000 | 47% | 53% |
| 1545-60 | 1,200,000 | 3,850,000 | 23.6 | 76.4 |
| 1560-80 | 855,000 | 3,640,000 | 20.8 | 79.2 |
| 1581-1600 | 1,030,000 | 4,945,000 | 17.2 | 82.8 |
| 1601-20 | 1,190,000 | 4,820,000 | 19.8 | 80.2 |
| 1621-40 | 1,157,850 | 3,916,300 | 22.8 | 77.2 |
| 1641-60 | 1,223,400 | 3,516,500 | 25.8 | 74.2 |
The general tendency of the first years of this period (1493-1520), if discernible at all, seems rather in favour of silver, and to the depreciation of gold. The average ratio was 10.75, speaking very generally, and with every mental reservation as to its applicability at any particular time and place. An equally rough average for the preceding time (see [Chapter I.]) would give a ratio of 11.28, showing apparently a movement in favour of silver owing to the increased production of gold.
The succeeding quarter of a century, 1521-45,