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Analyzing the effects of the flow of silver from the mid-16th to early-18 Century

Updated on June 13, 2014

From the mid-sixteenth to the early-eighteenth centuries there was a developing need for silver in China. This is because the Ming Chinese started to require all taxes and trade fees to be paid in silver. This started to wipe out the entire bartering and currency system. However, once a monetary system is placed, it is very hard to change it. This can be seen by the evidence shown in documents one through eight.

Documents one through four and seven, all show that there is not enough silver in the economy. Document one shows this by arguing this by saying that there is not enough silver in the weak economy. Document two shows that Spain is getting so much silver to China that they don’t need ballasts for their ships. Document three is showing that the lack of silver is devaluing grain. Document four shows that countries with silver are taking advantage of China by importing a lot of silver to get lots of other different goods from China such as gold, perfume, silk, copper, porcelain, and other luxurious goods, not available in their country. Document seven, arguing to repeal a ban of foreign trade says that because of the lack of silver in China they can increase the price of their goods due to the demand and bring in more silver.

Documents one and five show that the introduction of silver into the Chinese economy has created much more difference in the ranks of society. Document one says that a person with one bar of silver will save because once he uses that one bar he is left with nothing, whereas a person with a thousand bars of silver will waste, knowing that the still has a lot left. Document five sort of backs up document one by saying that there are some people with a lot of money and some people with very little. He states this by using the term “moneylenders” showing that people with little money had to borrow from people with a lot of money to clear off their “bills”.

Documents six and eight show that because the Chinese wanted to switch their monetary system and they didn’t have enough silver, other countries are benefiting because of the China’s need for silver. Document six shows that Spain is benefiting trade with China because they have so much silver that they don’t need to worry about anything. If they need something, they can just send some silver over to China for the goods that they want. Document eight says that England is benefiting so much from the trade that if they quit they will lose a lot of things coming in and they will not let any other nation get the benefits that they are getting.

The sources from documents one, three, and seven are all court officials so their view points were similar. They all stated that the trade of silver should be continued so that China gets all the silver they need in order the make the economy stable. This sort of shows that they all know from personal experience that China needs more silver.

The sources from documents two, four, and eight are all scholars and merchants so how they viewed the situation was also similar. They both talked about how their countries benefited from the trade with China. Document two showed how Spain benefited and document eight showed how England benefited. Document four showed how Portugal benefited because the source was a merchant, he knew how the the trade was going on. He describes the Portuguese getting so many different goods for one export of silver.

However, the source from document five was different. The source, a Chinese writer, expresses the opinion that the silver trade should stop and China should go back to its old bartering and currency system because silver is messing up the ranks of society in China. It is either making a family poor or wealthy. He expresses the need of a moneylender and sort of vaguely shows that the middle class doesn’t exist anymore. There are only two “classes”: the moneylender and the borrower.

In conclusion, the documents show how it was hard for the Chinese to try to change their monetary system, and how other countries took advantage of this. Another document that could be used to analyze the flow of silver in this time period could be one from a person, peasant or aristocrat, from China. This would help analyze the situation of the people and how they felt on this new change in the monetary system. That would give support on whether they wanted to increase the amount of silver coming into China or change back to their old monetary system. With this other piece of information, we could tell if this change was good or bad for China in a social aspect, rather than an economic aspect.


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