Currency in the 19th Century International Trade: The Importance of Mexican Silver

The global market of trade and exchange in the 19th century was a growing behemoth the likes of which had not been seen before. Technological and industrial revolutions allowed for greater speeds of transit and delivery. Combined with colonialist endeavors of many western nations, this set up a world where trade becomes crucial for the nation’s economy and as a result a nation’s power. In the Cornelius Gold Journal, there was a strong trade in the Pacific, revealing the United State’s rapid territorial expansion of the 19th century. In order to support markets and trade on a global scale, silver became an important tool as Asian demand and desire for silver was higher than European; thus goods were cheaper in silver prices in the Asian markets. Fortunately for the United States, and many other global trade powers, Mexico had massive silver mines that had been developed in the 18th century. The mines of northern Mexico were producing the bulk of the world's silver.

The colonial output of silver in Mexico during the 18th century (1700-1810) increased fivefold. Into the 1860s, the reliance on silver can be understood in most markets around the globe, East or West, based on the Spanish silver coins. The Cornelius Gold Journal is a record of the last years where the silver standard was dominant, as the U.S. and many other nations soon adopted the gold standard after 1870. This affected the trade in Asia in particular, as the market exchange became focused on buying Asian gold with Western silver. The worked well for the west, as they bought the more expensive gold (to them) with the cheaper silver which was highly valued in the East.

With the historical context of the currency in the 1860s, when Cornelius Gold’s journal was written, it can be assumed that his trades relied heavily upon silver. This is based on the Mexican silver production and global reliance on silver for international trade, as well as the Asian demand for silver in its own markets where Gold travelled. As the mines had been developed during previous decades of colonialism, silver had already been cemented in many nation’s treasuries as currency for trade. This reliance strictly upon silver would change as the gold standard was adopted after 1870.

- Tim Firestone

Works Cited

Richard L. Garner Garner, Richard L. "Silver Production and Entre-peneurial Structure in 18th- Century México." Jahrhuchfur Geschichte von Staat, Wirtschaft und Gesellschaft Lateinamerikas 17 (1980): 157-185.

Kris James Mitchener, Hans-Joachim Voth. "Trading Silver for Gold: Nineteenth-century Asian Exports and the Political Economy of Currency Unions." RJ Barro and J.-W. Lee, eds., Costs and Benefits of Economic Integration in Asia (2011): 126-48.

Ramón A. Gutiérrez "The Latino Crucible: Its Origins in 19th-Century Wars, Revolutions, and Empire." National Parks Service. U.S. Department of the Interior, n.d. Web. 30 Apr. 2015. http://www.nps.gov/history/heritageinitiatives/latino/latinothemestudy/empireswars.htm