Über die Autorin bzw. den Autor

Howard J. Erlichman (Austin, TX) has been evaluating multinational corporations, early-stage technologies and economic policies for over thirty years. He is also the author of Camino del Norte: How a Series of Watering Holes, Fords, and Dirt Trails Evolved into Interstate 35 in Texas.

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CONQUEST, TRIBUTE, AND TRADE

Prometheus Books

Contents

INTRODUCTION....................................................................9CHAPTER ONE: The Portuguese Head East...........................................19CHAPTER TWO: The Spanish Head West..............................................65CHAPTER THREE: Convergence with the House of Habsburg...........................107CHAPTER FOUR: The Great American Treasure Hunts.................................147CHAPTER FIVE: An Unlikely Bankruptcy............................................197CHAPTER SIX: Mining Revolution in Spanish America...............................235CHAPTER SEVEN: Cash Flow Squeeze in the Spanish Netherlands.....................271CHAPTER EIGHT: Convergence in the Far East......................................313CHAPTER NINE: Unimaginable Wealth and Squander..................................361CHAPTER TEN: The Dutch Advance..................................................401CHAPTER ELEVEN: Capital of the World............................................447NOTES...........................................................................463INDEX...........................................................................519

Chapter One

The seeds of the Portuguese Empire were sown by a Bavarian entrepreneur in 1367. In that year, a back-country weaver named Hans Fugger traveled down the Lech River from Graben to pursue trading opportunities in Augsburg. The ancient city had been founded in 15 BCE as Augusta Vindelicorum, along a tributary of the Danube River, and was becoming an important textile center. Few Augsburgers, including the newly arrived Hans Fugger, could have predicted in a post–Black Death year like 1367 that the river-trading town would achieve her greatest fame in association with a Central European mining boom in the late fifteenth century and that the descendants of Hans Fugger would amass the single-largest private fortune of the age.

In the meantime, the continuing ravages of the Black Death caused tremendous hardships and occasional opportunities during the second half of the fourteenth century. In bleak 1367, it was a rare opportunity in the weaving industry that induced Hans Fugger to journey north to Augsburg. He prospered by supplementing his own modest line of fustian, a coarse cotton cloth, with an array of textiles manufactured by other Augsburgers. The expanded line was marketed to the trade fairs at Nuremberg, Ulm, Donauworth, and Frankfurt. Hans's business skills were apparently superior to those of his competitors. He eventually gained possession of fifty looms, a few wagons, and three homes in Augsburg to complement the family homestead in Graben.

At his death in 1408, Hans Fugger left an estate valued at three thousand florins and had married off his son Jacob to a daughter of the master of the Augsburg Mint. While the medieval-styled marriage would prove to be fortuitous for three of Jacob Fugger's eleven children, Jacob was content with his position as a master of the Augsburg Weavers Guild. He focused all of his energies on trading local fustian for cotton, silks, textiles, and spices. Most of these items had to be imported from Venice—the commercial colossus of medieval Europe but only a ten-day journey from Augsburg. Jacob Fugger created a major textile and trading business prior to his death in 1469.

Despite a family connection to the Augsburg Mint, Jacob Fugger had declined to participate in the recovery that was taking hold in the Central European mining industry. A group of local rulers, metals-needy Venetians, and Bavarian entrepreneurs were attempting to reverse the so-called bullion famine that had spread through Europe during the Black Death century of depression (1350–1450) and had even worsened during the subsequent Ottoman onslaught. Annual production from the once-prolific silver mines of Central Europe had fallen to less than ten thousand marks (2.5 tons) in 1453 when Ottoman sultan Mehmed II conquered Constantinople, the east-west trading capital of Byzantium, and the Balkan silver mines of Serbia, Kosovo, and Bosnia. Mehmed's seizure of Novo Brdo (Kosovo) in 1455 deprived the Italian citystates of roughly nine tons of annual silver output that had flowed their way. Further dislocations caused by a series of Ottoman campaigns against Venice (by sea) and Hungary (by land) would shortly push the bullion famine to epic proportions in Western Europe. The sixty-five thousand pounds sterling minted in England in 1474 was just half of that issued in 1350. The mint output of the Netherlands was down to one-third. When currencies were tight, business activities grounded to a halt.

While the Ottoman advance was depressing to Christian Europe, the Venetians, and to a lesser extent the Florentines and Genoese, had the most to lose. The great Italian city-states had dominated Europe's east-west trade for nearly two centuries and needed a fresh supply of precious metals to maintain their cross-Mediterranean exchanges with the Mamluk spice merchants of Egypt and Syria. No matter that the Italians had helped to drain Europe of her metal supplies during this same period. The more encouraging news for the Italians, however, was that the European economy was finally on the mend. The general population had started to grow after the Black Death century had run its course, the textile industries of northwestern Europe were flourishing, and the upstart Portuguese were importing modest quantities of West African gold by sea. If the Portuguese were inevitably depriving the Italians (and Mamluks) of caravan gold that had sustained their economies for centuries, their efforts were at least making a contribution toWestern Europe's metal supply. Precious metals were essential because European trade goods were lowly regarded in the Muslim world and Christian rulers needed money to recruit armies to meet the Ottoman threat— especially after the traumatic fall of Constantinople.

As economic conditions improved, a number of Venetian merchants decided to take action. They would revisit the depleted mining districts of Saxony, Tyrolia, and Bohemia. The same Central European mines that had supported the rise of the Italian city-states in the twelfth century had not benefited from the metallurgical innovations that Saxon emigrants had applied to the more recent strikes in Hungary, Serbia, Kosovo, and Bosnia. The opportunity had been apparent to local investors as well. In 1451, the Duke of Saxony recruited teams of Saxon engineers to extend the depths of existing mines and to improve smelting and drainage processes that had remained unchanged for centuries. The duke paid special attention to the ancient cupellation technique for separating silver from copper and lead. The current separation methods were cumbersome and too expensive to process deep-seated ores economically. If Saxon emigrants could revitalize the Balkan mines in earlier centuries, a current generation of Saxon engineers could rescue mining industries closer to home.

The initiatives sponsored by the Duke of Saxony, the Venetians, and a small group of Bavarian capitalists paid off spectacularly. Ludwig Meuting of Augsburg jump-started the process in 1456 when he advanced a loan of thirty-five thousand florins to Archduke Siegmund of Tyrolia. The key point was that the loan was secured by the right to...