Splendid Exchange, A

by Bernstein, William L

  Trade diasporas soon formed around the Filipino-Mexican trade in silk and silver. Silk merchants from both the Philippines and Mexico crossed the Pacific to establish trade colonies. Those who had settled in the Philippines, called Manileños, struck first, sailing east to Mexico and making vast middleman profits from their warehouse stores in Acapulco and the capital. The Mexican merchants then turned the tables by sending their own agents west to Manila.

  Once again, established interests objected. The Manileños saw themselves as the founders and rightful beneficiaries of the silk trade. Unhappy at the loss of their monopoly with the arrival of the upstart Mexicans in Manila, they complained to the governor of the Philippines. As the Spanish barbers had done before them and generations of protectionists would do after them, the Manileños attempted to state their case in terms of the national interest: “One of the things which has ruined this land is the large consignments of money which rich persons in Mexico send here.”10 The crown responded with an easily evaded edict prohibiting the sending of money and agents from Mexico; its ineffectiveness was underscored by its repeated reissuance over subsequent decades.

  The Spanish in the Philippines got not only their silk exports from China, but also their food staples and labor, both in short supply in the new Asian colony. Colonial authorities established Parián, just outside Manila, as a residence for Chinese immigrants, and within a few decades more than twenty thousand Chinese were living there. In 1628, the Spanish governor admitted of the Chinese, “There is no Spaniard, secular or religious, who obtains his food, clothing, or shoes, except through them.”11 Wealthy Manileño merchants, Mexican agents, and colonial officials all acquired Chinese servants, many of whom made their way from Parián to Acapulco on the Manila galleon. Hence the protectionist reaction to Mexico City’s Chinese barbers, four centuries before cheap Asian electronics and riots at meetings of the World Trade Organization.

  North America’s first Jews came an even greater distance. Their story begins in 1496, when King Manuel I of Portugal issued an ultimatum to them—convert or leave. Many departed for Amsterdam. (The Jews who converted and stayed became known as cristãos novos—new Christians—and many of them served the Estado in the East. Manuel extended to the Jews the medieval version of “Don’t ask, don’t tell”; thus those who remained and did not convert should have been protected from inquiry until 1534. But Manuel’s offer was a ruse; in 1504 and 1505 many were slaughtered.) When, a hundred years later, Portugal and Holland battled for control of long-distance trade, Portuguese Jews in Holland found themselves at the center of the conflict. In Asia, this struggle revolved around spices; in the New World, another cargo took center stage: sugar.

  Today sugar, a bulk commodity, sells so cheaply that it is given scarcely a second thought: the average American today consumes sixty-six pounds per year; the average European consumes eighty-seven pounds. Yet during the medieval period, it was considered a “fine” spice, as rare and expensive as cloves, nutmeg, mace, and cinnamon. Economic historians estimate that during the fifteenth century, per capita consumption in Europe was just one teaspoon per year.12

  It is not too much of an exaggeration to call sugar the heroin of foodstuffs. Babies will consume a solution of glucose in preference to water, and no human society or culture rejects the consumption of granulated sugar, even when a population is physically intolerant to it, as some Inuit tribes are.13 Sucrose is the only chemical that humans will happily consume in pure form. In virtually every part of the world, its per capita consumption has increased steadily over the course of recorded history.14

  The English, in particular, have a sweet tooth, and it dates back centuries. Consider the description of Queen Elizabeth by the German traveler Paul Hentzner, from around 1595:

  Her face oblong, fair but wrinkled, her eyes small, yet black and pleasant, her nose a little hooked, her lips narrow and her teeth black, a defect the English seem subject to, from their too great use of sugar.15

  If sugar is so addictive and grows so easily, why didn’t it spread more rapidly from its southeast Asian homeland? The cane plant, Saccharum officinarum, requires a frost-free growing season of about twelve to eighteen months, steady and copious rainfall or irrigation, and year-round temperatures averaging more than seventy degrees Fahrenheit. Cane harvesting and the subsequent extraction of pure, granulated sugar from the cut stalks are hot, backbreaking work that consumes vast amounts of both fuel and human effort.

  The production of sugar is as much an industrial process as an agricultural one, and occurs in three stages. First, the cane is crushed to release the sweet cane juice. For millennia, this was accomplished with crude, inefficient mortar-and-pestle devices, and cane juice was therefore a luxury product, even where abundant slave labor was available. Next, the sweet juice has to be reduced by boiling it down to a concentrated sucrose solution, a process that requires a large amount of fuel. Finally, the solution is repeatedly heated and cooled in a refining process that separates out the sugar into granules of purity ranging from clear crystalline rocks to a brown residue—treacle or molasses—that cannot be further crystallized. This final process, sugar refining, not only consumes yet more fuel but also requires great skill, so much so that during the colonial age it was accomplished mainly in the advanced industrial centers of Europe.16

  The natives of New Guinea were probably the first to domesticate sugarcane, sometime around 8000 BC. Its cultivation spread rapidly to southern China, Indochina, and India, where it flourished in their warm climates. Solid sugar does not appear in the historical record until its mention in Indian religious documents from AD 500.17 Later, Muslim conquerors and traders exported both the cane plant and the techniques for refining it to the Middle East and Europe. Thus the old adage: “Sugar followed the Koran.”18

  But just barely. Muslims grew Saccharum officinarum in the few narrow strips of the Middle East and Mediterranean blessed with water from rainfall or irrigation: the Nile Valley, the coasts of Palestine, northern Sicily, Spain, Crete, and a few mountainous river valleys in Morocco. Farther north, the climate was too cold; farther south, there was not enough water.

  When Europeans took over many of these areas after AD 1000, they inherited cane cultivation and the craving for sugar. The Portuguese transplanted production to their newly discovered tropical Atlantic colonies: first to the Atlantic island of Madeira, then to the Azores, and later to São Tomé, an island off the coast of equatorial Africa. These fertile islands had easy access to slave labor and provided plantation owners with far better conditions than those in the Middle East or the Mediterranean. Growers were particularly attracted to São Tomé, which was uninhabited when the Portuguese arrived in 1470, yet close to the heart of the central African slave trade.

  Even with the cultivation of the Atlantic islands, sugar remained a luxury item, as production was still not widespread enough to make it a mass good. Two problems continued to hamper growers: a lack of efficient cane-crushing devices and a shortage of fuel. The first problem was remedied sometime around 1500 with the invention of the three-cylinder mill, which could be driven by water or animal power. This device consisted of three adjacent vertical rollers and could be run by only three men: one tended the waterwheel or draft animals that provided the power, and two continuously fed the cane through the rollers to each other. The second problem, lack of fuel, resulted from the deforestation of the Middle East, Europe, and soon enough, the Atlantic Islands. With the discovery of the endless forests of the New World, this last barrier disappeared.

  By the time of Columbus’s transatlantic voyages, cane had just been transplanted to the Spanish Canaries, from where his expeditions were staged. It quickly spread throughout the tropics of the New World and touched off an explosion of cane production that powered much of the world economy for the next three centuries. The “sugar belt” of the New World, which spread from northern Brazil to Surinam and up the Caribbean chain all the way to Cuba, attracted large numbers of European set
tlers lured by the relatively short transatlantic passage, the lack of organized native opposition, and agricultural profits unimaginable in their homelands.

  The Spaniards soon lost their newcomer’s advantage in the Caribbean to the more industrious Portuguese in Brazil. The first place to feel the shock of the New World’s production was the Portuguese island of Madeira. Not only had it been the world’s premier source of sugarcane before the discovery of the New World, but it was also the major staging point on the Brazil-Lisbon route. Local producers, hurt by the large amount of Brazilian sugar being dumped into the local markets, demanded, and got, protection. In 1591, authorities in Funchal, the island’s capital, forbade the importation of New World sugar and imposed imprisonment or fines of up to a few years’ wages on violators.

  By 1591, protectionism was already an old story. One reason why the Spanish fell behind in the sugar race was the crippling of the industry in Cuba, Jamaica, and Puerto Rico by political pressure from the original growers in the New World, those on Hispañola.19

  Over the course of the sixteenth century, Portugal became further disadvantaged by the growing economic strength of Holland and England. Both of these new powers in northern Europe licked their lips at the rich, far-flung, and poorly defended trading empire that Lisbon only loosely controlled, and its great prizes: Asian spices and Brazilian sugar.

  The Dutch struck first at the Portuguese overseas empire. The results were mixed. One of their more notable failures to snatch trade and territory from Portugal occurred in South America. In 1630, the Dutch West India Company (WIC), which had been organized seven years before with the goal of cornering the sugar trade, chose as its main base in the New World some delta islands on the Brazilian coast, whose flat, maritime setting reminded its members of home. There they built the city of Mauristaad (modern Recife) at Brazil’s easternmost extremity. Initially, things went well for them; over the subsequent decade, they conquered most of Brazil’s northern coastline—from Mauristaad to the Amazon’s mouth, a distance of about a thousand miles—and thus controlled the lion’s share of the world sugar trade. In the seventeenth and eighteenth centuries, sugar and slaves were inextricably linked, so the WIC became a master of the slave trade as well; between 1636 and 1645, it sold at least 23,000 slaves in Brazil alone.

  It was natural that the Brazilian expedition of the WIC would be spearheaded by Amsterdam’s Portuguese-speaking Jews, who not only possessed the requisite language skills but also were deeply involved in the city’s sugar trade, refining operations, and financial markets. The initial success of the WIC greatly improved the status of Dutch Jews. For example, the WIC, unlike the Dutch East India Company, had many Jewish shareholders. At the height of the WIC’s operations in Brazil in the mid-1640s, over one-third of its four thousand settlers were Jewish.

  At that point, history conspired against the WIC, and, along with it, the Jews of Brazil. Sixty years before, in 1580, Philip II of Spain inherited the crown of Portugal when its own royal line died out. (To Philip, this was only natural; he had Portuguese blood, had been raised by Portuguese courtesans, spoke Portuguese as his main language, and parodied Caesar by saying, “I inherited, I bought, I conquered.”) The resultant loose union of Spain and Portugal, which left Brazil and the Estado da Índia independent of Spanish control, split apart following the Portuguese uprising of 1640.

  Portugal’s independence from Spain in 1640 produced two consequences that combined disastrously for the WIC. First, the new Portuguese king, João IV, negotiated a truce in 1641 with the Dutch government, as distinct from the WIC, forcing the company to halt its expansion and suspend its offensive operations against Portuguese ships. Second, the revolt against Spain galvanized Brazil’s Catholic Portuguese settlers, who soon rose up against their Protestant and Jewish Dutch overlords. Passions ran high in the cities, particularly Mauristaad, where many Portuguese were deeply indebted to Jewish moneylenders.20 By 1654, the Portuguese settlers had retaken Mauristaad, and Brazil’s Dutch invaders scattered north to Surinam, the Caribbean, and back to Amsterdam.

  During the seventeenth century, the Inquisition still raged in both Spain and Portugal. Fortunately for the Jews, the Portuguese commander who captured Mauristaad, Francisco Barreto de Menezes, honored the letter of canon law, which stated that only Jews who had been converted from Christianity were subject to the Inquisition—a nicety not always observed in either Spain or Portugal, where unconverted Jews were regularly persecuted.

  Twenty-three of the Jewish settlers boarded a Dutch vessel that was driven by adverse winds to Spanish Jamaica, and for a second time they wound up under the Inquisition’s sword. Once again, fortune smiled: the Spanish governor, not wishing to anger the Portuguese or the Dutch, let them go. The refugees found passage on a French vessel, the Sainte Catherine, whose captain, after extorting from them what he could, deposited the Jews in Manhattan in 1654.21

  Again, the modern reader may find the events leading up to the seventeenth-century arrival of the first Jews in New York disturbingly familiar: the sudden displacement of commodity production halfway around the planet, the inevitable calls for protection from the old centers of production, and the migration far from their native lands of those with specialized skills.

  That the governor of New Amsterdam, Peter Stuyvesant, worked for a private concern, the WIC, seemed perfectly natural. After all, the Dutch outposts in Indonesia, southern Africa, and the New World (as well as the English bases in India) were almost exclusively trading enterprises; it was only logical that they be run by company men, not government officials.

  By the early seventeenth century, mariners had mastered the world’s winds so well that there was nothing unusual about a group of Jews from Amsterdam showing up in New York via Brazil, or about Chinese silk arriving in Mexico, or even Peru, by way of Manila. But one final wind system remained to be discovered.

  How or when mariners encountered the southern version of the high-latitude westerlies that blew the Manila galleon from the Philippines to Mexico is unknown. But blow they did in the south Indian Ocean, more fiercely than in the North Pacific, because the Indian Ocean has fewer intervening landmasses—the “roaring forties” of the southern hemisphere. Da Gama and his Portuguese followers briefly took advantage of their weak northern edge on the last segment of the “wide swing” across the south Atlantic around the Cape of Good Hope. Had they but known, they could have ridden these winds almost all the way to the Spice Islands.

  In 1611, Captain Henrik Brouwer of the Dutch East India Company passed the Cape, and instead of heading northeast toward India on the summer monsoon, boldly turned southeast into the void and became the first mariner to ride the roaring forties all the way to Java. He reached Batavia (modern Jakarta) just five months and twenty-four days after leaving Holland; by comparison, the usual monsoon route took over a year. Not only was the new route cheaper and quicker, but the crew remained healthier and the supplies fresher in the cooler mid-latitudes. As a bonus, Brouwer was able to avoid the Portuguese at Malacca.

  Brouwer’s method—round the Cape of Good Hope, head east for seven thousand miles, then turn left—became standard procedure for European mariners for the next three centuries.22 The trick was knowing when to head north to thread the Sunda Strait between Java and Sumatra. John Harrison’s marine chronometers, which could accurately measure longitude, would not come along for another 150 years, and many a Dutch and English ship failed to make the turn and got carried “beyond the bend” (as Coleridge’s ancient mariner, cursed for shooting an albatross, had sailed south of Australia and shot straight into the Pacific). Only the lucky ones returned to tell of their accidental discoveries of Australia’s northern and western coastlines.

  More often than not, such missed turns proved disastrous, and Australia’s coral-studded coastlines became a graveyard for dozens of European vessels. The most infamous of these wrecks was the Batavia, which foundered on a reef in Western Australia in 1629. About one-fourth of her three hundr
ed passengers and crew drowned, but the rest made it onto a desolate strand of coral virtually devoid of fresh water. The ship’s captain and its head merchant (the latter Brouwer’s brother-in-law) reached Java in a small open boat. When rescue crews arrived three months later, they found a horror beyond description: a small group of mutineers had brutally and methodically murdered most of the remaining survivors. The Dutch East India Company attempted to censor the episode, and given the distances and lack of effective communication and transport, it nearly succeeded. The lurid events took decades to leak out and transfix the world with the story of how Europeans, in a wild place beyond the reach of law and civilization, slaughtered each other.23 (Hereafter, the Dutch East India Company will be referred to by its Dutch initials—VOC—or, in the appropriate context, simply as “the Company.”)

  Mankind’s hard-won command of the world’s winds gave rise to a new monetary system, in many ways the forerunner of today’s global credit and payment mechanisms, that bought the imported luxuries demanded by the covetous of both the Old and New worlds. Ships that traveled east on the roaring forties route carried the trade goods most in demand in Asia: fine European textiles and precious metals, most of which had been minted in Mexico and Peru into eight-real “Spanish dollars,” or pieces of eight. This coin, which flooded the European currency markets in the sixteenth century, was approximately the same size and weight as the Bohemian thaler—from which the word “dollar” derives. (Since eight reales equaled one “dollar,” and the coins were too unwieldy for everyday use, they were frequently broken up into eight one-real pieces, hence the term “piece of eight,” and the nickname of the quarter-dollar, “two bits.”)