What happened to the Spanish Gold from the Incas?

I’m currently reading A History of the World by Andrew Marr (it’s a good read so far). There’s an interesting chapter about the consequence of Spain gaining a large quantity of gold and silver from the Incas during the Sixteenth Century. Almost overnight, Spain became very rich taking home unprecedented quantities of gold and silver. These were stolen from the Incas and the mines that the Spanish came to control.

The gold was used by the Spanish monarchy to pay off its debts and also to fund its ‘religious’ wars. Therefore, gold started to trickle out to other European countries who benefited from the Spanish wealth.

The Spanish also were able to purchase an unprecedented quantity of imported goods from around the world – including Europe and China.


Impact of inflow of Gold on Spanish economy

For me, the most interesting thing is the theory that the sudden influx of gold actually contributed to Spain’s relative decline and low living standards in future centuries. How could an influx of gold cause this?

One theory suggests that – because the Spanish had so much gold, they could easily buy commodities from other countries without producing them itself. Because consumer goods could easily be bought, there was little incentive to produce goods and undertake the necessary investment and develop the technology to produce goods. Therefore, it is argued this ‘easy wealth’ was a factor in limiting economic development.

In macro terms, we could see Sixteenth-Century Spain has a country with a very large trade deficit – financed by capital inflows (stolen gold). But, this is an unbalanced economy – consumption enables high current living standards, but when the gold dried up, Spanish business and industry had been left behind other European nations. Nations without a windfall of gold had a much greater drive to create wealth rather than just consume it.

Therefore, the sudden inflow of gold was not good for the long-term development of the Spanish economy. But, partly explains why the Spanish economy came to lag behind the rest of Europe until the post-war period.

Great Britain, by contrast, arguably, gained just about the right amount of gold. National hero Francis Drake was really just a pirate. He attacked Spanish ships and took some of the gold. (It is estimated about 10% of Spanish gold was lost to piracy). Francis Drake gave a good portion of his stolen gold to Queen Elizabeth I – who used this windfall to pay off the UK national debt. (so, I suppose piracy is one way to deal with a national debt).

However, Great Britain never gained enough of the Latin American gold to become just a nation of consumers. The prospect of gold actually motivated a rapid expansion in naval technology. It was around this time, that Britain’s navy and shipbuilding capacity increased rapidly. This sowed the seeds of Britain’s future Empire. But, it was an Empire which was at least partly based on industry and production. We may have exploited natural resources in countries like India, but we also had the incentive to manufacture goods – and this motivation contributed to the industrial revolution.

It is an irony of history that had Great Britain received a huge windfall of gold, the industrial revolution may not have started in Great Britain – because the incentive for business to take risks and develop industry would not have been as strong. Therefore, be careful what you wish for!

Modern equivalents?

You could argue the windfall from oil could have a similar effect if the oil revenues are used just for consumption. Oil producing countries comparative advantage comes from producing oil. For a country like Saudi Arabia and Qatar, oil enables a high consumption, low tax economy. But, to some extent, it discourages any alternative forms of investment and business development. When oil runs out, oil producers could find themselves left behind (unless they can foresee this and diversify in anticipation of oil ending)

Inflow of Gold and inflation

Another feature of the gold rush into Spain was that it was probably a cause for the high inflation of the Sixteenth Century. Economist Earl Hamilton argues that prices in Spain rose 300 percent between 1500 and 1600. Part of this reason was the rapid increase in money (then silver and gold) chasing a fixed amount of goods. The consequence was that Spanish exports became uncompetitive in Europe. Instead, the wealthy Spanish imported goods from abroad.

But, what happened to the Spanish gold?

Basically, it slowly spread around the world. As the Spanish bought goods. It is also worth noting, although it was huge sums for the time,  it was still a fraction of today’s annual gold production.

From 1500-1600, total gold production is estimated at 36 tons. From 1900 to 1976 it was estimated at 76,428 tons.


47 thoughts on “What happened to the Spanish Gold from the Incas?”

  1. Interesting article. I wonder if there were similar consequences to Portugal with the influx of gold from Brazil? Do you think the amount of gold in both cases would be comparable?

    • To my knowledge, Brazil did not have large quantities of gold. Wealth there came from agriculture. In contrast, in both the Spanish colonies of Peru and Mexico there were old established civilizations and large supplies of gold. As well, Argentina had silver, and Chile copper.

    • Does anyone know anything about Spanish gold mining camps or what they looked for when they were prospecting

  2. Why hasn’t any talked about the $7 trillion dollars of gold and silver coins and bouyon that Spain retrieved from the Smithonian in Janurary of 2010 when they won the case against the scavanger hunter?? Hello?!

    • Just a back of the napkin google check of your premises:

      1) The amount of gold salvaged was worth ~USD$500M at the time it was awarded to Spain by a U.S. court in 2011, not $7trillion.

      2) The sunken ship, Nuestra Señora de las Mercedes, was in fact sunken by the the British in 1804, in an unprovoked peacetime attack. The American Revolutionary War was old news at this time.

      3) The Spanish ship’s destination was the Spanish Port of Càdiz, on a domestic cargo run. England was not the destination of the ship or the gold and silver bullion it held.

      4) Spain did not politically endorse the American Revolution. As a colonial power itself, colonial rebellion was viewed by the Spanish as inherently threatening.

      5) Spain did supply the American rebels with arms and material, both for a profit, and as a means of proxy war against its colonialist arch rival England.

      To summarize, nobody is talking about your subject matter because your subject matter is not real.

  3. In Jan. 2010 Spain legally won their case against treasure/bounty sea hunter, through the Smithonian. The scavanger hunter found a Spainish ship filled with gold and silver coins and thousands of pounds of bouyon bars, estimated by the courts to worth $7 trillioin dollars, just narrowly out of the sea boundaries of Spain. The log retrieved stated that the Spanish gold/silver was headed to the Queen of England to support the British in their war against the founding fore-fathers of the soon to be United States of America. How come no one is talking about it? This is my second try to comment on your Spanish gold article.

    • I find that very interesting, shouldnt it been given to the Queen if those were the intentions of Spain then?
      What will they do with that 7T$ of gold and silver? Hmmm

      • Given it to the Queen? Are you insane , they should Give it back to the American people-Amerindians – it was take from them with sweat, blood and rape.
        The Americas should be billing Spain/ Ingland/ France/ Portugal/German-Dutch crowns for every single once of gold taken by these thieves!

        • You mean the same natives who warred with their neighbors and stole their gold and lands after enslaving their defeated foes? So by right of conquest they lost what they had themselves stolen? Isn’t Karma a bitch?

        • I wholeheartedly agree. Give it back to the people who can trace their ancestry back to the Incas. Even the king was brutally killed after he filled a room with gold, so the Spanish would let him go. Of couse the Spanish killed him anyway. Why? It’s not like the Incas could mount any defense or offense against the Conquistadors. There weapons were ineffective. The Europeans did the same thing to the indians in everyplace in the America’s. Spain has proven that they don’t know how to handle wealth. All that gold was to the detriment of their nation. The coins in that wreck were probably Inca precious metals anyway. At least the Inca’s made beautiful art from the gold and silver, instead of buying more weapons to kill more people.

          • By this time the Incas were offering human sacrifices. Cultures that get to that point are usually “judged” by other cultures. Fact of history.

          • I love your comment and respectfully agree with you. Spain has no right to that treasure that was stolen in the first place from the indigenous people of the Americas. The conquistadors we’re just barbarians,rapists and murderers. The catholic priests were no better with there inquisition and brutality. That gold belongs partly to the salvagers for finding and retrieving it. And the indigenous people of the Americas. Spain can go retrieve their piece of shit ship that Couldn’t handle the weight of all that gold they murdered people for. The US had a big part in giving that to Spain. Can only imagine what benefited them.

        • Exactly! I’m doing my English speech on this topic and absolutely believe that it should of been returned to Peru where it should of been rightfully invested in helping people who can trace their ancestry back to the Incas, or at least be put on display to earn more revenue to help the native people!!

        • I totally agree! Can you imagine how that kind of wealth, would improve the lives of the indigenous people of central and south America. I can only blame it on their lack of centralized leadership today, and ignorance of what happened, and what they can do about it. I can think of one legal firm smart and tough enough to pull that off.

        • Yes, it should be given back ! The gold and silver was plundered and stolen, it wasn’t ‘acquired’ or ‘gained’ as the articles and comments state. European countries stole the gold ! It should be given back.

      • No ship of the 15th or 16th century was large enough to heal a cargo of $7 trillion in gold and silver, even a small fleet of that era could not haul this massive weigh.

    • No. The Odyssey find is worth $500M, not $7T. All the gold ever mined is only worth $8.5T. Smoking weed is fine. Commenting when so is problematic for the rest of us.

      • Well said.

        And another thing –

        “they should Give it back to the…”

        Who shouldn’t give back to who ? Should I bill the Romans for their deeds in 100AD ? Should East Asia bill the Han ? Should the other Amer-indians bill the Aztec ? Should Mexico divide it’s DNA and have the conquistador half pay the Aztec portion so that they can pay out to the tribes the Aztec murdered and plundered ?

        I owe nothing to no-one for ‘man’s’ inhumanity to man’ in the past. If one believes reparations are owed – one needs to study all of history and prehistory. All of it.

        • If theft is not a problem that needs to be addressed, many people will admire your generous attitude. Perhaps you could give them your address so they can come take your stuff without fear of ever having to pay it back.

      • Wade

        Thank you, I am glad that someone yook the time to do the math on this absurd statement. As I also commented, no ship of the day was capable of ferrying or hauling $7 trillion of gold, silver or anything else, even multiple ships would not be sufficient.

  4. Please keep in mind that this gold was melted down religious plates. An entire civilization’s culture was melted down.

    • Quite true- this is what greed and stupidity does to people and it has been happening since the dawn of civilization as well, so lett’s not only point the finger of barbarianism at the Spanish, the Romans, Egyptians, Greeks, Persians, Chinese etc- have all melted down the booty from their conquests.

  5. By international maritime law, any recovery party/entity is still entitled to a reasonable ‘salvage right(s)’, regardless of who owns the treasure, lest no one would take the financial risk of retriving any sunken treasure.

  6. The seven trillion of dollars worth in todays todays money,the alegation of no roon the ship to transport the gold at that era is not true

  7. A very inaccurate account of how the Great Britain was actually benefitted by gold and money from colonies. It’s portrayed here as though the British got such less gold and other resources (“Just the right amount” it seems?!) that they couldn’t get into the culture of over spending without manufacturing. Please do read about the extent of losses the colonies specially India incurred due to the unwanted British rule. And please read the actual account of it not the fabricated one that is propagated in British education systems and media.

  8. Cool,would wonder what you get for pirate plunder being found in America.IRS would also like to know who’s it for for appropriate taxation.State level would want its cut all the way down to the dog catcher.Funny that church and state still exists so no tax is paid.

  9. As a Spaniard, I concur totally with this theory which I have read before from other sources, by the way, as to the late onset of industrial development in Spain.

    I’d just like to point out that “stolen” might not be the most fair term for the goods that were earned through conquest, as, as somebody already pointed out in the comments before, this has been a constant throughout history in every empire, simply because those were the rules of the game back then. It’s laughable to say the least when affected peoples complain about the inherent injustice to that matter. You’ll certainly never see me complaining about the unfairness set by the Roman empire rule in Spain centuries ago. Sure enough their expansion onto the Spanish region back then had bad consequences we may be suffering of off still to this day, just as we can similarly enjoy the consequential benefits of the civilization that was brought here as well. Yet, for the Spanish case, some people seem to be either incapable of realizing the latter, or perhaps (and I believe this to be the actual case, as per the designs set on by the black legend) indoctrinated to reject it. I personally wish we could have as a good a relationship with our native speakers all over the world, as the Commonwealth have with their members.

  10. I recall having read an article in the Readers’ Digest way back in the 1960’s about what happened to Spanish gold and silver from the Americas and where these had gone. I faintly recall having read in that article that bulk of the Spanish gold and silver shifted hands from Spain to the fellow Hapsburg-ruled nations like France, Holland, Belgium, Germany, Austria and Hungary for trade and industy. A substantial part of the residual gold in Spain and Austria and Hungary found its way to Russia after the Axis nations were defeated in WWII. I however stand to be corrected for my poor memory and recall. I would be thankful if someone could give references of the Readers’ Digest article I have referred to on the subject. A message to my email id would be gratefully appreciated.

  11. Most of the Spanish gold — if not all of it — was shipped to Stalin’s Soviet Union in 1937, in exchange for weapons and NKVD security troops to fight Franco in the Civil War, 1936-1939.

    • But later, in WW2, Stalin paid the west in gold (Spanish gold?) for the weapons he used to fight the Nazis.
      Zelensky of Ukraine doing the same, but selling land to the west for guns.
      Ukraine has the best land for farming in the world.

  12. Thanks.
    Look like you are the only one honest here,all others still thinking to still frome the Americas.
    That treasure suppose to comeback to the owner,not to the Rats.

  13. I have heard Spanish gold from ocean wreaks from hundreds of years ago, Spain still has a claim on- if that is true, then shouldn’t the Latin America’s countries also have more of a claim? ie the money was stolen from them… unless Spain can produce a 400 year old bill of sale from the indinigiuos people.

  14. LOL Spain took gold from Mexico and Peru 400 years ago and USA took and from Mexico less than 200 years ago so who should pay first?

  15. Yes, the US took California and a number of other states from Mexico, after it attacked Mexico in 1847 and won.
    California had a lot of gold, owned by Mexico, so became valuable to the US.
    US offered $30 million to Mexico for California, Mexico refused.
    Later, Mexico lost everything to the US.
    Highway robbery in plain sight!
    Rules of the old days!

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