MEXICO - part 2

    In the annals of military endeavor there may be no more amazing tale than that of Hernan Cortes.  What "sane" person would have taken a few hundred truculent mercenaries into an unknown land filled with millions of hostiles, to march straight into the giant prison of the capital of its most bloodthirsty kingdom, to bamboozle its sovereign, then seize him and use him as a
puppet to run his empire, and when finally driven out of the capital with the loss of half his force, to turn right around and launch a sustained aggression that culminated in the total ruin of that kingdom and the subjection of its inhabitants?
    The answer, of course, is no one.  No superior would ever have approved the course taken.  It was not too risky.  It was impossible.  They would have waited until they got more artillery, at the very least.  Today we would call him a monomaniacal sociopath and would prescribe medication to help him control his grandiose aspirations.
    In fact, his superior, the governor of Cuba, convinced of the impossibility of his mission, and certain that Cortes could cause nothing but mischief with the force at his disposal, tried unsuccessfully to stop him.  Nowadays we would call him a rebel, which was in fact what they called him then.  Had Cortes been apprehended by the mission that was sent to catch him he would
have been condemned and executed, and everyone would have approved.  The governor complained to king Charles I back in Spain, but the king had heard from Cortes, who had sent an interesting letter, and besides, he had what he considered more important business in Germany, where he was the Holy Roman Emperor, and where Martin Luther was getting started.  No decision was made at the royal level, leaving Cortes, and all the colonies for that matter, more or less to their own devices for the time being.
    What was perhaps most galling to his bosses was that Cortes NEVER asked for advice.  He only told them what he had done already.  If you were a boss you wouldn't like it either.
    By August, 1521 Cortes was master of a territory several times the size of his homeland, and at least as populous.  He immediately began the construction of the new Spanish capital on the ruins of Aztec Tenochtitlan, and the military pacification orf the country continued.  His letters to the king expressed nothing but loyalty, but he was, in fact if not in name, the king of Mexico, and should he have declared himself independent there would have been little anyone in Spain could have done about it, at least in the short term.  It seemed politic to bring the rascal in rather than to go after him.  Accordingly, Cortes was appointed both governor and captain-general of New Spain, with full powers, and he received the letter that granted his commission in 1522.
    The successful ventures of Cortes caused a sensation in Spain and its colonies.  Look at all that land!  Look at all that gold!  People started streaming into Mexico from all over, hoping there might be something in it for them.
    Actually, it turned out that there wasn't all that much gold after all.  Yellow metal was the first thing the Spaniards looked for, and so far their colonial operations had yielded not very much of their hearts' desire, leaving them to grumpily work the local population to death on agricultural projects.  A relatively large haul was obtained in Mexico during the conquest, but it was essentially a one-shot deal.  Mexico, it turned out, did not have that much gold to offer.
    The Spanish colonies were not allowed to make decisions regarding their economic policy.  After a brief fling with silver, the Caribbean islands were restricted to coining copper.  The crown wanted to keep its hands on all the specie, and would rather send out its own product, at great expense but on which it had already collected its tax, than to allow the locals to go about their business.  It was going to get its cut, no matter how much it cost!  From the royal point of view, it didn't matter that much anyway; there wasn't any gold to speak of.  So the Caribbean colonists ended up funding most of their operations with letters of credit, while the markets got by with barter and tokens.  And don't forget that most of the population were essentially slaves, for whom slops and the whip served in place of wages, and for whom coinage was unnecessary.
    In New Spain there was a temporary abundance of gold, and the false hope of much more to come.  Great schemes were planned.  Vast sums were poured into the construction of Mexico City and the ongoing military operations.  A lot of the activity was lubricated with gold, which became ubiquitous in Spanish commerce.  The stuff was initially used "as is," in any form, but
within a short time the use of privately made coin-like disks became the norm in the Spanish sector.  Needless to say, fraudulent debasement was normal, and prices soared.  Something had to be done.
    In 1524 Cortes found himself faced with the defection of the commander of his southern expedition, who had decided to set up his own jurisdiction in Honduras.  In one of the few bad moves of his life, the captain-general set out on a punitive expedition, leaving a council in Mexico City to govern in his absence.  He thought he would be back in a few months, but it turned out to be two years, during which he executed his captive, the last Aztec emperor, Cuauhtemoc, probably for no good reason, and ruined his health.  It was all for nothing, as the rebel had fallen to a pro-Cortes coup only a few months after his secession.
    Meanwhile, the colonial government was going to Hell in a handbasket.  The council members were arguing among themselves, neglecting all their civic functions in favor of personal vendetta and ostentation.  They spent much energy in slandering Cortes to the royal court back in Spain, meanwhile putting out in the colony that he was dead.  Force and fraud had become the law of the day when Cortes finally returned in June of 1526.
    In April of that year the governing council had authorized the holders of gold to bring it to the Royal Assay Office to be made into proper slugs, which were to bear the royal mark and an indication of their fineness.  In practice this attempt at regulation was completely ineffective, because of the normal practice of hacking off bits of gold bars to make change, which had the
effect of ensuring that the majority of the circulation remained unmarked.  Fraud continued unchecked.  Making a bad situation worse, Cortes, on his return, decreed that the slugs should be marked as being 3 carats higher fineness than they actually were.  His thought was simultaneously to grease the skids of commerce and to give a leg up to his veterans, who were holding a lot of gold and were being hurt by the inflation.  Of course, his strategem made things worse than ever, and to the various charges being leveled against him at home in Spain, could be added this one of fiscal mismanagement and shenanigans.
    A month after the return of Cortes to Mexico, a royal commissioner arrived to depose him as governor and investigate the colonial situation.  Ill luck attended this venture, as first the commissioner and then his replacement died in short order, and the third appointee was incompetent.  Supposedly, dies bearing the royal arms were brought, but these were never used.
    Finally, a full commission of inquiry, the Audiencia, was sent out in 1528 with full powers to govern, and charged with the task of compelling Cortes to return to Spain to explain himself.  Cortes had already resolved to do so, and he arrived in Spain in May, 1528.  Though eventually confirmed as captain-general, he was never allowed to govern again.
    The first Audiencia was brutal and incompetent, and was replaced after two years by a more reasonable commission.  One of the early acts of the first Audiencia was another attempt to regulate the circulation of the gold slugs, by means of the application of new stamps.  This was no more successful than the 1526 act, and for the same reasons.  No examples of this proto-coinage are known today.
    Under the second Audiencia things started to settle down, and business started to boom.  The unsettled circulation really started to pinch some big feet, and agitation began for a mint to be established.  You know how it is with bureaucracies.  You make your request and they make you resubmit it, then they have to make changes to it, and so on.  It took until 1535 for the crown to authorize it.  And actually, they didn't exactly even do that.  King Charles finally turned his attention to the colonial enterprises being undertaken in his name, and he had decided that they would be governed by a system of vice-kings, or viceroys to be more properly Romantic, who would have full authority.  The viceroy would authorize a mint if he decided it was necessary.
    No sooner said then done.  The new guy, Antonio Mendoza, arrived in 1535, and immediately work was undertaken to regularize commerce.  A factory was set up, in one of Cortes' houses, as it happened, and the first coins were issued in 1536.
    Pradeau, in his Numismatic History of Mexico, states unequivocally that gold coins were struck by Mendoza to replace the gold slugs, but no such items have been seen by anyone living today.  The coining of gold was expressly prohibited until the late 17th century, and the irregular gold slug continued to be the token of big business.  Strange but true!  All the gold was supposed to go home to Spain!
    Silver coins were produced in some modest quantity under Mendoza and his immediate successors.  The initial coinage was of 4, 3, 2, 1, half and quarter reales., all but the quarter being distinguished by the lack of waves under the pillars.  The "early" series, 1536 to about 1542, is much scarcer than the waves-under-pillars "later" series, which endured after the abdication, in
1556, of the king whose name they bear, until about 1572.  The quarters are extremely rare, but you might find one for sale eventually, because little bits of silver like them, not matter how significant, tend to be ignored by the people who come up with batches of old Spanish coins.
    There are only a few three reales - enough to establish that they exist.  And there MAY have been 8 reales coins, but no authentic specimens are known at this time.  "Later" series 1, 2, and 4 reales are not hard to find.
    Copper was coined in denominations of 4 and 2 maravedis, along the lines of the well known coinage of Santo Domingo.  While the 4m is quite a bit scarcer than the common Caribbean coin, the little 2m is rare to the point of unavailability.  The coppers were extremely unpopular with the natives.  Pradeau wonders why.  My theory is that the value of the Spanish coppers was ludicrously out of line with the actual values of the country.  34 maravedis was supposed to get you a real.  But one of those T-shaped "Aztec hoes" from Oaxaca would get you 5 reales if it was full size and undamaged.  The Spanish coppers were absurdly overvalued.  No wonder they weren't accepted!  And finally their coinage was prohibited, along with that of gold, in 1538.

    One of the enduring myths of our American culture is that of the pirate.  There is not much in our lives that refers directly to the 17th century, but the image of the pirate crew swigging their rum and singing their songs while sitting atop a "dead man's chest" is there in the consciousness of young and old alike, though the kids these days know about only one of them; Captain Hook.
    The numismatic tie-in is, of course, what's inside that dead man's chest.  And probably the identity of the contents is the single most widely known numismatic fact in America.  These days if you try to spend a Buffalo nickel they're apt to look at it funny, but everyone (italic) knows that the chest was filled with gold doubloons and silver pieces of eight.  Which is to say, Spanish colonial gold and silver.
    Because everyone (italic) is aware of the basic relationship between pirates and Spanish colonial coins, there is a truly vast potential market to whom these romantic relics can be promoted.  It completely dwarfs the collector community, being made up of every kid who loves Peter Pan, every nautical buff, the tourist shops of all but the northernmost beach resorts of North America, and the casual TV watcher who saw an Errol Flynn movie on cable last night.
    Spanish colonial coins have been promoted to this general public since way before I was in business, more than two decades now, and the promotional campaigns are coming down the pike faster and stronger than ever.  The price of the stuff, at all levels, is higher than it should be, but that doesn't mean much, because it pretty much always has been.  The basic market fact of Spanish colonial is that most of it gets sold outside the collector community, to jewellers and promoters, which means that collector demand does not determine the price level.  This is a very strange situation in the coin business.
    Stranger yet to me is the fact of my own experience: that even though I know that a lot of the material ends up as jewelry, and that I have sold and continue to sell much of what I acquire as such, I think I can count on one hand the number of pieces of Spanish colonial coin jewelry I have seen actually being worn by someone.  But the world's a big place.  Somewhere, thousands of lovely necks are graced by pieces of eight.

  We were discussing Mexico, and had progressed to the reign of Philip II, who succeeded to the Spanish throne on the abdication of his father, Charles I, in 1556.  Philip's paramount interest was the war against Protestantism, and he unstintingly poured the treasure of his realms into that cause until it was all gone.  He really needed that royal fifth that was levied on all metal found within his realms.  The search for lucre was the basic reason that the colonial enterprises were launched in the first place, and it was a great disappointment that, year after year, no serious quantities of bullion were to be found.  There certainly wasn't any to be found in the Caribbean islands, and Montezuma's treasure notwithstanding, there didn't seem to be much in Mexico either.  Certainly there wasn't any gold to speak of, and the returns of the silver mines there were fairly paltry until the 1550s.
    This lack of bullion would seem to be the main cause of the scarcity of "early type" Carlos & Juana coins, and the discovery of significant silver deposits in Zacatecas, Guanajuato, San Luis Potosi, and Pachuca in the 1550s-60s provides a reasonable
justification for the relative commonness of the later series, which is thought to have been inaugurated around the year 1542.  The Carlos and Juana types seem to have been continued for some 16 years after the accession of Philip II, but the discovery of massive silver deposits in the middle of the century created the need for a more regular coinage throughout the colonies.  The reform was carried through in 1572, with the introduction of new designs, the familiar shield type cobs, in the normal denominations of 4, 2, 1 and half reales, with the addition of the 8 reales, now made necessary by the volume of
middle-level commerce.
    It is not hard to run into cobs these days.  Your average cob will either be from Potosi in Bolivia, Lima in Peru, or Mexico.  There seem to be about 10 8 reales for every other denomination, though in terms of bulk there are plenty of all the other
denominations save the four and the quarter.  And there are a lot more from Mexico than from anywhere else.
    By the 1580s Mexico had become the linchpin of the Spanish economy.  All of those tons of silver from Peru and Bolivia were sent up to Panama, carried over the isthmus to the Atlantic, and brought to Veracruz, there to be loaded, alongside the tons of Mexican silver and the treasures of the true Indies, on the ships that, God willing, would carry them home to Spain.
    And of course many of those ships never made it, being seized by pirates or sunk in storms.  I wonder what the insurance arrangements were like back then?  Salvage of those ships has been going on at a terrific rate these last twenty years, to the point that the majority of cobs for sale these days have come out of the ocean.  Salvaged gold may be pristine or may show signs of abrasion from sand, coral, etc.  Silver, depending where it was situated in the original corroded lump, may be in any condition from almost pristine to absolutely horrible.  Most salvaged coins have been worked on in one way or another
before they are sold, and sometimes you can tell what wreck a coin is from by the way it was treated.  A lot of wreck coins have been (successfully) promoted to the general public and come with fancy certificates of authenticity that make them more expensive.  Most of the time, salvaged silver cobs are not as nice as the ones that didn't spend two to three
hundred years in salt water.
    There are also counterfeits.  Lots of them.  Most of them are ludicrous, but I am always amazed at what people bring me to ask "Is this real?"  There are some good fakes too, so while there are plenty of real cobs around, you could keep the possibility in mind, especially if you are examining something impressive and expensive.  Most of the American cob dealers (and most of the Spaniards as well) are people of the highest moral rectitude and can be trusted implicitly, but the world is a big place.
    At the end of the 16th century the Mexican economy was humming loudly, there was silver everywhere, the mint was in a terrific hurry, they rushed out their coins.  Nobody cared what they looked like, just get them out on the market in a hurry.  This
situation prevailed for about a quarter of a millennium, and the mint developed the grand tradition of high volume and utterly careless execution that makes the cob coinage so picturesque.  The sloppiness was in the realm of artistry only.  Inattention to detail in the assay was a capital offense.
    The mint officials were at pains to deceive the king as to the quality of their product, and would make superb examples to send back home for his approval.  The king didn't care.  He just wanted his cut so he could go on fighting the Protestants.  No Spanish monarch ever visited the colonies.  So the king got to see the coins the way they were supposed to be, while everyone else got to use them as they actually were.  But at times some loyal subjects might be able to go to the mint, if they were dressed properly and knew someone, and could pay a little extra to get their silver made into nice pieces that they could then present to some important person they wished to importune.  Just another nice touch.  Today these special coins get special prices.
    All Mexican cobs (except for the fractionals) carry the royal arms as a shield on the obverse and the quartered arms of Castile and Leon on reverse.  These types were common to all the colonial mints in the 1580s, but later the pillars-and-waves design was adopted everywhere except (italic) Mexico.  The cross on Mexican reverses has fleur-de-lys ends that usually are rendered as knobs.  This feature was employed at no other mint, and is diagnostic if, as is common, the cob you're examining has no legend whatsoever.
    The earliest cobs were undated.  Pradeau mentions dates as early as 1580, but Frank & Dan Sedwick in their Practical Book of Cobs (italic) state unequivocally that the earliest date is 1607.  The dated coins continued on until 1733, during which time Mexico was the most prosperous place in America, an outpost of civilization in the wilderness, a land of peace and plenty.  Mexican silver greased the skids of commerce all over the world.
    The date is supposed to be at the edge at about 11 o'clock on the shield side.  In the real world the date is usually missing on 8 reales coins, and almost always on lower denominations.  If you can't see the date maybe you can see the Assayor's initial under the mintmark, which will allow you to partially pin down your coin.  There are also stylistic tendencies which will help you to assign attributions, and differences in the obverse shield.  On half real coins you will be dealing with royal mongrams on the obverse, which will mostly be variations on PHILIPVS or CAROLVS, and it will likely be impossible to decide which Philip or Charles it is due to wear and poor strike.  Of course the date and assayor will probably be missing, and likely the mintmark too, leaving just the knob-ends of the cross to tell you it's from Mexico.
Nowadays we are used to the coinage being a government operation from top to bottom, but back then the mint management jobs were auctioned off.  It was not until a debasement scandal at Potosi in the 1640s, the one that caused the design switch to
pillars-and-waves in South America (from which order Mexico was exempted owing to its clean record) that the Spanish crown started to appoint royal officers as supervisors, and it was not until the 18th century that the mint operation was fully nationalized.  Cobs are thus prime examples of a "privatized" currency.
    The minting of gold coin, which had been prohibited in the colonies, was authorized late in the 17th century, with production beginning at Bogota, Colombia in 1672.  If Bogota, why not Mexico?  Accordingly, the Mexican mint began to strike gold in
1680.  (Actually, according to the mint records, gold was struck in 1679, but no specimen of that date is known.)  Gold cobs are all expensive.  Bogota mint products are the most common, followed by Lima and Mexico.  2 escudos, the famous doubloons, are the most common denomination, followed, at least in Mexico, by 8 ecudos coins.  Unlike the silver, most of the crosses on Mexican reverses are similar to those of the other mints, so if the legend, including the mintmark and assayor are off the flan, you'll need to become an expert to identify your piece.  All gold cobs are too expensive, and there is a continuous
loss of specimens into jewelry.
    During the two and a half centuries that Mexico was peacefully cranking out cobs the situation back home in Spain was deteriorating steadily.  The Spanish kings thought of themselves as defenders of the True Faith, and they poured all their fortunes and energies into that cause, to the neglect of everything else.  All the bullion streaming into Spain was not enough to pay the bills, as well as creating inflation by its mere presence.  Taxation levels got progressively higher.  It became very difficult to make a living in Spain.  And then there were more wars, and then they had a bad king, Charles II, for thirty five years.
Charles having died without issue in 1700, the throne passed from the Hapsburgs to the Bourbons of former enemy France.  The new king was the heretofore mentioned Philip V who had to fight to retain his throne.  The Bourbons abandoned the old Hapsburg obligation to defend Catholicism against all comers and attempted to ameliorate conditions at home.  But by the 18th century the glory days were over in Spain.
    In terms of availability of cobs by monarch, all are reasonably available, except for the unfortunate Luis.  Father Philip V abdicated in favor of son on January 10, 1724, but was called back on August 31 on that same year when Luis died.  Word had gone out to the colonies in the meantime, and some coins, the great propaganda instruments of that era, were struck.  Probably all the silver denominations were struck, but only a single 1 real and no 2 reales are known today.  I actually picked a Luis half real out of a bag of cobs once back in the 1980s.  Terrible looking coin.  One of the high points of my numismatic life.  There are gold Luis coins too, but they are so rare that I might as well move on.
    In 1732 the mint in Mexico was nationalized and incorporated into the royal treasury, though the actual coinage operation remained a subcontracted private operation.  That same year work was begun on a new mint facility which would make modern coins by the new, improved machine process.  A new type was to be introduced: the "two worlds" or "pillars" type.

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