Money, Banks and Finance in Economic Thought

Silver, money, banking and regulation in the work of Tomás de Mercado (?-1575)

Jefferies Claudia, City, University of London

Tomás de Mercado's views on transatlantic trade and the role of early modern banks in 16th- century Seville, as featured in his Suma de tratos y contratos (1571) are an important source for early modern financial history. As an authority in the area of moral theology, the main objective of Mercado in his Suma was to offer ethical advice regarding the transactions carried out by bankers and merchants on either sides of the Atlantic. Mercado grew up in Mexico (New Spain),and was therefore also familiar with the economic interactions between miners and silver merchants that took place in the Viceroyalty. Given the target audience of the Suma, Mercado's main focus was on economic issues, despite the overall normative nature of his argumentation. Although in a formal sense banks did not exist in Mexico before the 18th-century, the credit and money exchange transactions that took place in mining towns between silver merchants and miners throughout the 16th- century can be seen as the first steps towards the development of a local banking system. A discussion about the regulation of such transactions emerged already at this early stage.This paper presents Mercado's Suma alongside other primary manuscript sources found in the Archive of the Indies (Archivo de Indias) in Seville and aims to obtain an enhanced picture of Mercado's views on the trade that took place between silver merchants and miners in Mexican frontier mining towns. A better depiction of such trade relationships will reveal the ways in which frontier markets were linked to transatlantic trade and the banking system in Seville and other European financial centres.Special focus will be placed on trade regulation aspects in Mercado's writings and other contemporary manuscript sources. The aforementioned documents will be placed within an economic and social history context. Politico- philosophical aspects of Mercado's normative arguments will also be emphasised as they are an important element that shaped contemporary views on the regulation of early modern silver trade and banking.

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Keywords: Silver, money, early modern trade, regulation, Scholastic monetary theory, early modern finance, credit and banking

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