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Too Much Silver? Prices in Spain in the 1500s

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Too Much Silver? Prices in Spain in the 1500s

Source a Salamanca professor's explanation of rising prices and test it with supply and demand.

Silver and prices

Read the passage and study the table. Then answer the questions.

The Treasure Fleets and the Price of Bread

1In the 1540s, Spanish colonists found rich silver deposits at Potosí, in the Andes, and at Zacatecas, in Mexico. Indigenous laborers, many of them forced to work, dug the ore, and the mines soon produced more silver than Europe had ever seen. Every year, armed fleets carried gold and silver across the Atlantic. By law, this treasure had to be registered at the House of Trade in Seville, so the city became the gateway for American silver into Europe. Some silver was smuggled in and never recorded.

2At the same time, prices in Spain climbed. A loaf of bread, a jug of olive oil or a length of wool cloth cost more and more as the century went on. Historians call this long rise the "price revolution." Spain's population was also growing in much of the 1500s, so more families were buying food. Wages went up too, but in many places they rose more slowly than the price of food.

3People noticed and argued about the causes. Some blamed greedy merchants or bad harvests. At the University of Salamanca, a group of professors, many of them priests, studied money, prices and fair dealing. One of them, Martín de Azpilcueta, published his explanation in 1556. In France, the writer Jean Bodin reached a similar conclusion in 1568: he argued that the main reason prices were rising was the great amount of gold and silver now in Europe.

4Spain did not keep its treasure for long. Spanish kings spent huge sums on wars in Europe and borrowed from foreign bankers, so much of the silver flowed on to Italy, the Netherlands and other lands. Merchants also carried large amounts of it to Asia to buy silk, porcelain and spices. Prices rose in many parts of Europe, though usually less than in Spain. Historians still debate how much of the price rise came from silver and how much came from population growth and other causes.

Treasure counts only what was registered at Seville. Price index: prices of common goods compared with the years 1500–1509, which are set at 100 (an index of 200 means goods cost about twice as much). All numbers are rounded estimates to show the general trend; historians' figures differ.

Treasure and Prices in Spain in the 1500s
Years	Treasure registered	Price index
1500–1509	Under 5 million pesos	100
1530–1539	About 6 million pesos	140
1550–1559	About 18 million pesos	200
1570–1579	About 29 million pesos	290
1590–1599	About 70 million pesos	400

1.

Use the table.

By 1590–1599, common goods in Spain cost about times as much as in 1500–1509.

2.

Which conclusion about the table is the most careful?

A. The table shows silver was the single cause of higher prices.B. Both rose together, but that alone does not prove a link.C. Prices began to rise before any treasure reached Seville.D. Treasure arrivals fell after the 1550s while prices kept rising.

3.

A farm worker near Seville in the 1590s earns more coins per day than his grandfather did. Based on paragraph 2, why might his family still eat worse?

A. Coins were no longer accepted in markets.B. The law stopped workers from buying bread.C. Shops in Seville refused coins made from American silver.D. Food prices rose faster than his pay did.

4.

Sort each change: does it mainly change the SUPPLY of something, or the DEMAND for something?

Source the excerpt

Read the sourcing note and the excerpt. Then answer the questions.

Sourcing note: Martín de Azpilcueta (1491–1586) was a priest and a professor of church law who taught at Salamanca. He wrote this in 1556 as part of a handbook for priests who heard confessions. It helped them judge whether merchants' money-changing deals were fair or a sin.

Excerpt: adapted from a translation of Azpilcueta's commentary on exchange
"All goods become dearer when they are in great demand and short supply. Money, too, can be bought, sold and exchanged, so it is a kind of goods, and it also is worth more when it is scarce. In Spain, in the days when money was scarcer, goods for sale and the labor of workers were given for much less than after the discovery of the Indies, which flooded the country with gold and silver. The reason is that money is worth more where and when it is scarce than where and when it is plentiful."

5.

What is Azpilcueta's main claim?

A. Plentiful money is worth less, so goods cost more of it.B. Greedy merchants caused prices to rise by cheating buyers.C. Workers in Spain were paid more before the Indies were found.D. Gold and silver are not goods, so they have no price.

6.

Circle the sentence in which Azpilcueta uses evidence from his own country.

7.

How does the purpose in the sourcing note help explain why Azpilcueta studied prices?

A. He wrote to sell Spanish goods to buyers in France.B. He was a merchant who wanted to defend his own profits.C. Priests had to tell market changes apart from cheating.D. He hoped to persuade the king to stop the treasure fleets.

8.

Jean Bodin reached a similar conclusion in 1568 (paragraph 3). Why does this strengthen Azpilcueta's argument?

A. Bodin was writing before Azpilcueta's book appeared.B. A writer in another country saw the same pattern.C. Bodin showed that prices in France were falling.D. Bodin lived in Seville and counted the treasure himself.

9.

What is one limit of the excerpt as evidence about the causes of the price revolution?

A. It does not weigh other causes, like population growth.B. It describes prices in France rather than in Spain.C. Its writer lived and taught in France, not Spain.D. It was written long after the 1500s had ended.

10.

In the 1590s a Seville baker charges a little more each year for the same size loaf. Which explanation uses supply and demand best?

A. Bread was scarce because Spain had stopped growing wheat.B. Silver made the flour heavier, so each loaf cost more.C. More coins and more hungry buyers chased the same bread.D. The bakers' guild voted to raise prices to punish buyers.

11.

Claim: The silver of the Americas did not make most ordinary people in Spain richer. Do you agree? Use evidence from the excerpt, the table and the passage, and explain your reasoning with supply and demand.