The underlying causes of this crisis have been already described. The currencies of the trading nations of Europe were all unconsciously bimetallic. Throughout, there was in existence one class who grasped the _fact_ without any knowledge of the _theory_, and profited by it--the merchant exchangers. There was constant oscillation--change of ratio, and the least alteration of the condition of one metal made it a lever for operations upon the other. These operations were arbitrage merely. They had no relation to the ebb and flow of commerce as modern arbitrage transactions have. It was a financier's opportunity of _private_ gain, and for _private_ gain the system was worked. The ebb and flow of European currencies, which the sixteenth and seventeenth centuries witnessed, were as unnecessary (i.e. for the purposes of her commerce) as they were disastrous.
It is sufficient to indicate the tendency of this argument, and to leave the illustration of it to the following pages.
To return to the yield of precious metals during the years under discussion. Any estimate must be conjectural, in the absence of the accounts of the Spanish Mints.[9] This understood, it may be thus tabularly represented.
[Sidenote: PRODUCTION OF THE PRECIOUS METALS]
+-----------+-------------+-------------+--------------+--------------+ | | Annual | Annual | Proportion | Proportion | | Date. | Average | Average | of Gold | of Silver | | | Production | Production | in Total. | in Total. | | | of Gold. | of Silver. | | | +-----------+-------------+-------------+--------------+--------------+ | 1493-1520 | £800,000 | £600,000 | 57% | 43% | | 1521-45 | 1,000,000 | 1,100,000 | 47% | 53% | | 1545-60 | 1,200,000 | 3,850,000 | 23.6 | 76.4 | | 1560-80 | 855,000 | 3,640,000 | 20.8 | 79.2 | | 1581-1600 | 1,030,000 | 4,945,000 | 17.2 | 82.8 | | 1601-20 | 1,190,000 | 4,820,000 | 19.8 | 80.2 | | 1621-40 | 1,157,850 | 3,916,300 | 22.8 | 77.2 | | 1641-60 | 1,223,400 | 3,516,500 | 25.8 | 74.2 | +-----------+-------------+-------------+--------------+--------------+
The general tendency of the first years of this period (1493-1520), if discernible at all, seems rather in favour of silver, and to the depreciation of gold. The average ratio was 10.75, speaking very generally, and with every mental reservation as to its applicability at any particular time and place. An equally rough average for the preceding time (see Chapter I.) would give a ratio of 11.28, showing apparently a movement in favour of silver owing to the increased production of gold.