The Silver Standard Chris Canezaro History 361

Silver can be viewed as one of the most important commodities in world history. Silver has been the cause of social revolutions, political revolutions, world discoveries, and many more discoveries. From the ancients Greeks to modern times, many currencies have been backed by the amount of silver available. The Chaldeans first mined the precious metal, silver, in 3000 BC. They discovered the precious metal in Anatolia, modern day Turkey. The Chaldeans were some of the first people to implement a monetary system based on the silver standard. Their money was not backed by the silver, but was made from the silver that was mined. The coins produced by the Chaldeans are some of the oldest coins produced. These coins have been found in ancient Babylonian cities. Not only have these silver coins been found in Babylon, they have been found as far away as China. This leads many historians to believe that the Chaldeans were trading with Chinese as early as 3000 BC. This is the first commodification of silver in its long history.

The Chaldeans were not the only ancient people to utilize silver as a monetary export. In 1200 BC, the Greeks discovered the Laurium mines. The Divine Bounty has bestowed upon us inexhaustible mines of silver, and advantages which we enjoy above all our neighboring cities, who never yet could discover one vein of silver ore in all their dominions1. The 350 Laurium mines produced 1,000 talents of silver per year for the Greeks. This played to the advantage of the Greeks. At the time, they were the worlds largest producers of silver. The Greeks utilized this by becoming also one of the worlds largest ancient traders of silver. The trading of Grecian silver was produced mainly by the distribution of the coinage. The images of the coinage differed from city to city, but the images were struck on pure silver coins. This made the distribution easier. Many ancient Grecian coins have been discovered in India and Algeria. This discovery informs people that the Greeks were

Xenophon, the Greek philosopher was a great supporter of the mining silver.

worldwide distributors of the silver. To the Greeks, silver was the backbone of their economy. Like many other things, the Romans did not invent the mining of silver, but they did come close to perfecting the process. The Romans utilized silver as a commodity and perfected the trade. About 300 BC, the Roman Empire began developing a new coinage system. This system was based heavily on the production of silver. Before the Empire implemented a national currency system, many Roman cities had already begun coining their own currency. The cities of Naples, Florence, and Heraclea established long ago their own monetary system based on silver. Unlike many other Empires, the Romans developed coinage not out of necessity, but because they realized how well it worked for the Greeks. "Roman coinage did not result from any economic or military necessity, and could at first fulfill only the most limited functions. It arose, arguably, from the cultural influence of Greece and the Greek cities in southern Italy: the Romans wanted their city to have the civilisation of Greek cities, and saw the production of their own coinage as one important aspect of this process."2 With the establishment of the silver coinage system in Rome, the demand for
2

Andrew Burnett, 1987

silver caused the Roman Empire to conquer more lands. The Romans began conquering both the British Isles and the Iberian Peninsula. Both the British Isles and the Iberian Peninsula contained large deposits of silver ore. The Roman Empire utilized the silver coinage system until the reforms utilized by Diocletian. The reform of the coinage system changed the images on the Roman coins. This established a more generalized image of an emperor. Though Roman coinage was established and generalized, many coins featured a specific emperor and a different image on the reverse side. Depending on the region the coin was struck, the reverse image would differ. The Diocletian reform was an attempt to bring unity to the Empire. The commodification of silver was not only limited to the Western World. The Far East discovered silver ore deposits during the Han Dynasty in 206 BC, but the Chinese had been trading with the Chaldeans as early as 1200 BC. Unlike many peoples, the Asian Empires were not interested in gold. The Asians were more interested in silver. Also

unlike many Western Empires, the Asian Empires did not utilize coinage. Instead, they traded silver ingots or bars marked with the dynastys emblem. Many Asian Empires would trade with the Middle East, and only accept silver as payments. During the Han Dynasty (206 BC-220AD), the primary form of trade was with silver ingots. The only form of European trade was with the Roman Embassy established in the 3rd and 4th centuries. It was not until Niccolo and Mafeo Polo arrived in 1259 that European and Chinese trade had begun successfully. The two peoples had traded on the Silk Road informally, but this established formal trading agreements between the two countries. This also allowed more countries to venture to into trade with the Chinese. During this time, it is believed that China owned over 40% of the worlds silver. The

Chinese had a high demand for silver for one simple reason they could not produce it. On the other hand, the Chinese had many things the Europeans wanted. Europeans also viewed silver as a second hand commodity to gold. Europeans were more willing to get rid of the silver due to the unfavorable trade balance that silver to gold caused. The Chinese were not the only silver hungry Asian Empire. In 1526, the Japanese discovered the Iwami Gizan silver mine. This mine would provide Japan with over 400 years of silver mining. At the peak of its production, the Iwami Gizan mine was producing 38 tons of silver per year. Most of the silver produced by the Japanese would be exported to China. Before the discovery of this mine, the Japanese were being forced to import silver due to the lack of the resource. After this discovery, the Japanese were one of the worlds largest silver exporters of the time. Like many other countries, the Japanese turned to a silver

standard as monetary value. This was the main form of commodification of silver for the Japanese. The discovery of the New World was the most important factor for the commodification of silver. The discovery of the New World gave the Portuguese the upper hand in the trade on silver. Both the Spanish and Portuguese benefited from the discovery of abundant silver mines in South America. The Spanish would soon discover most of their silver would come from both South and Middle America. The discovery of silver deposits allowed the Spanish Empire to accomplish two things. 1. They were able to finance wars for the Catholic faith 2. To purchase the goods need to fuel the Spanish war machine. With these two things fueling the Spanish Empire, the desire for silver was higher than ever in history. The extractive economic system the Spanish implemented with the South American colonies would later prove to be detrimental in the future of the The discovery mines was not positive for the colonies. of the silver completely European

economy. From 1500 to 1650, the price of silver drops 400% due to the over abundance in the precious metal. This forced a major drop in not

only the Spanish economy, but in the European economy. The struggle placed on the economy affected not only the upper class, but also the aristocracy. In 1581, silver began to increase in global prices once again. This was caused by the discovery of silver mines in Peru. This once again brought silver back to popularity in the world economy. Not only did the price in silver increase, the amount of Spanish imports and trade increased drastically. Only eight years later, the Spanish Armada was defeated and the days of the Spanish Empire were numbered. The role of the major importer of silver would now be taken over by the English. The English did not only control the England, but they also controlled the silver rich country of Wales. The first mining of silver in Britain was by the Roman Empire.

After the fall of the Roman Empire, wealthy members of the British

aristocracy began mining for silver ore. In 1066, William of Normandy established one of the oldest and most profitable silver mines in England. This caused a demand for silver in England. This also caused a spike in mining for silver. Many peasants began mining for silver instead of utilizing their land agriculturally. Much of the silver mined in England was melted down into silver ingots and transported to Wales or Ireland as a commodity. This produced wealth throughout the British Isles. Unlike many places in the world, the demand for silver was much higher than the demand for gold in the British Isles. During the British Empire, the British were importing more silver from the far reaches of the kingdom than any other commodity. During the British Empire, India was the highest producing colony. Not only did they produce tea, indigo, and many other commodities, India was the highest exporter of silver. The world has been affected by foundation of silver. It has been the basis of monetary systems throughout history. Not only has it been the backbone of monetary basis, it has been utilized a money itself. Today, it can be used as a form of investment and currency. The silver standard has changed throughout history. Silver has been the source of countries wealth. It has been the cause of many countries downfalls.

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