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.
The upshot of these circumstances was that close to ten tons of anticipated silver failed to arrive in Manila. Trade was at a standstill. The fine balance collapsed at the village of Calamba southeast of Manila on the night of 19 November 1639, when several hundred Chinese farmers burst into the house of Luis Arias de Mora. These farmers had volunteered to come into the jungle to build rice paddies for the Spanish in exchange for tax breaks, but conditions were deplorable. Resources were nonexistent, and the promised tax holiday was never honored. When disease swept through the Chinese community, the farmers turned on Mora. Mora, the former Chinese Protector of Manila, was now the hated administrator of this agricultural colony. He had used his position to squeeze the Chinese for all he could get. He was aware of the discontent, but had no reason to suspect anything that night, and was sound asleep when the mob arrived. The farmers dragged him outside, denounced his oppression, and put him to death. The insurgents then set off on a march to Manila to appeal for clemency and demand redress for their sufferings.
This small outbreak of violence might have been contained, had the Chinese delegation that rushed down from the Parián to mediate been able to gain full cooperation from the Spaniards sent to suppress the uprising. During the parley, however, a junior Spanish officer attacked one wing of the insurgents, possibly without realizing that a cease-fire was in place. The Chinese fought back, and then the rest of the Spanish forces threw themselves into battle. The war that was being averted was on again. As soon as word of the insurgency spread, Chinese all over Luzon rose up and joined the rebels. The insurgents gathered across the Pasig River across from Manila and prepared for their assault. Chinese living in the Parián strove to maintain their neutrality, but on 2 December they joined the insurgents.
The governor responded by ordering all Chinese inside Manila and the nearby port town of Cavite put to death. The warden of Cavite, Alonso Garcia Romero, chose to implement the order stealthily. He invited all Chinese in Cavite to close their houses and gather in the enclave of royal buildings for their own protection. He also invited priests from all the religious orders to come and hear confessions from the Christian Chinese and baptize the non-Christians. He then announced to the Chinese who had obediently assembled that they were to be taken in groups of ten to greater safety within the walls of Manila. In fact they were being taken out for decapitation. Some thirty such groups of ten had been processed when someone noticed a guard cutting off the purse of one of the departing Chinese. Suddenly the warden’s behavior looked like a trick to take their money (no one quite yet realized it was a trick to take their lives), and an uproar ensued. The Chinese turned on their guards, who fled but closed and barricaded the only exit from the outside. A squad of arquebusiers surrounded the building, entered, and shot every Chinese inside. A Spanish chronicler, who assumed that the Chinese were plotting to rise up and murder all the Spaniards in Cavite, declared the Cavite massacre to have been “a great mercy of God.” He estimated the death toll at thirteen hundred. Only twenty-three Chinese managed to escape the massacre.
The Chinese insurgents laid siege to Manila, but the city was well fortified and the Spanish had no difficulty holding out. After three weeks, they took the offensive, launching an attack across the Pasig River. The Chinese had to fall back, and eventually were routed fr
om the area. As they passed through one burned village, Spanish soldiers found a singed but otherwise unharmed statue of Christ in the ruins of a church. They presented it to Corcuera, who declared the statue’s salvation from fire a miracle, and raised it at the head of his forces: God was on their side. A few days later, a Chinese Christian convert in a village across the Pasig River exhumed a statue he had buried of Emperor Guan, the god of war and the patron saint of merchants. The convert should have burned the statue when he converted, but decided instead to bury it behind his house against future uncertainties. When he was exhumed, according to what Spanish investigators later learned, Emperor Guan promised to aid his followers in battle. It was a promise his followers could not bring to fruition. As long as the Chinese were outgunned by their adversaries and orphaned by their ruler, the god of commerce could not prevail over the god of empire.
The Spanish eventually cornered the remnants of the Chinese insurgency and asked a Jesuit priest to negotiate their surrender. The insurgents, insisting that “they did no harm where they were not harmed,” agreed to end hostilities on the condition that the Spaniards allow them to go down to the coast and return to China. Corcuera refused. His condition for accepting their surrender was just the opposite: that they not leave the Philippines. The governor understood that Manila’s wealth and power depended on the Chinese being there. He needed them to return to Manila and resume the old arrangements if the colony were to survive. Not only did the Chinese lack leverage, but they too could appreciate the value of returning to the way things were. On 24 February 1640, eight thousand combatants laid down their arms. They were marched back to Manila in a victory parade before the city walls. The Spanish cavalry led the parade followed by their indigenous allies, who were followed in turn by the defeated Chinese. At the end of the march rode Governor Corcuera, and directly in front of him, held aloft on a pole, the fire-blackened statue of Christ that had been recovered from the burned church.
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