Finance History | Casa Nacional de Moneda, Potosí, 1572 — The Mint Whose Coin Became the World's First Global Money

A coin struck at four thousand metres in the Andes became the money of Ming China. In 1545 an Andean prospector found silver on a mountain in what is now Bolivia. The Spanish called it Cerro Rico, the rich hill. Within decades a city of tens of thousands had appeared on a bare alpine slope where nobody had lived before, at an altitude that makes walking uphill hard work. A royal mint was established at Potosí in 1572, and the complex that houses the museum today has been rebuilt and enlarged since. What it struck was the real de a ocho, the piece of eight, carrying the mint mark P. The cover photograph is a large replica of one hanging in the courtyard, with the crowned arms and the legend naming the king of Spain and the Indies. The same year the viceroy Francisco de Toledo introduced two things that made the mountain industrial. The first was mercury amalgamation, using mercury brought from Huancavelica, which allowed silver to be won from ore too poor to smelt. The second was the mita, a rotating labour draft adapted from an Inca obligation, under which Andean communities were required to send men to the mines in turn. By the peak around 1592 the operation ran on reservoirs feeding scores of grinding mills, and the mountain was producing more silver than the rest of the world's mines together. Now the part that belongs in a finance collection rather than a mining one. Spanish silver did not simply enrich Spain. From 1571 the Manila galleons carried it from Acapulco across the Pacific, where China, having shifted its tax system onto silver, would pay far more for it than Europe would. So the piece of eight circulated in Asia, in the Americas and in Europe simultaneously, and it became the first coin that was money almost everywhere. It is the ancestor of the Spanish dollar, and through it of the United States dollar. The silver also arrived in Europe faster than Europe's output of goods, and the long inflation of the sixteenth century is conventionally laid at its door. None of that can be separated from how it was produced. Men worked at altitude in heat and darkness, and the mercury process poisoned those who handled it. Estimates of how many died at Potosí over two and a half centuries vary so enormously between polemical and academic sources that no responsible figure can be given here, which is itself worth saying plainly rather than picking the number that suits the argument. The mita survived until 1825, when it was abolished as Spanish rule ended and the new republic took Bolívar's name. Spanish still has the phrase vale un Potosí, meaning worth a fortune. UNESCO inscribed the city in 1987. Cover photo: Fremau Camps, CC BY-SA 4.0, via Wikimedia Commons. Coordinates -19.588236, -65.754152, resolved by Nominatim for the Casa Nacional de Moneda on Calle Ayacucho and matching a Commons geotag about 50 m away. Accurate to about 50 m.