The History of the Silver Trade: The New World – Now
Our last installment of the history of silver cut off just before Columbus would travel to the New World in 1492. This discovery of new continents was perhaps the biggest milestone in the history of silver to date. The new land turned out to be a wealth of silver, particularly in the areas we now know as Mexico, Bolivia, and Peru. The silver that would be mined in these areas would account for 85 percent of the silver that would be mined for the next 300 years.
During this time, the Spanish introduced the most common coin in the time of the 16th and 19th century, the pieces of eight. These coins helped the silver trade become global, and soon became the international currency of the time.
Mexico, Bolivia, and Peru continued to put out a wealth of silver and an estimated 40 percent of that ended up in Chinese hands, helping them continue to grow their empire. The silver mining lived through many other developments, as well, including America’s independence from Great Britain. As the colonists developed the government, economy, and monetary system, silver played a big part.
In 1792, the current Secretary of the Treasury, Alexander Hamilton, proposed the adoption of both gold and silver as the official base for the United States monetary system, leading up to the Coinage Act of 1792, which demanded the establishment of a mint. Two years later, the first silver coin was formed, opening up domestic and international trade for the American colonies.
The Great California Gold Rush soon followed, which would lead to the discovery of silver in Nevada in 1858. This was a time of great excitement, as many settlers found their fortune in a wealth of both gold and silver, which could be used as legal tender at the time.
The use of silver as legal tender did not last for long in the United States, as it proved much more practical and economical to use paper money and official coinage to trade rather than straight silver, and in 1873, silver was banned from being used as legal tender.
Thus began the decline of silver in the monetary system. Though in 1890, more silver coins were minted than ever, ten years later, silver was removed from the monetary standard by the Gold Standard Act of 1900. A few decades later, during the Great Depression, President Roosevelt enacted the order to confiscate and nationalize personal holdings of silver in an attempt to stabilize the banking crisis. Over the next two decades, the United States became the largest purchaser of silver in the world.
Silver has been absent from minted coinage in the United States for almost 60 years, but the silver trade can be a prosperous market for the savvy trader, as the rates continue to rise and fall with market trends. Though it is no longer the standard, it remains a vital part of the economy today.