An episode in United States foreign trade : silver and gold, Santa Fe and St. Louis (1820-1840)

The purpose of this study is to examine the overland trade with northern Mexico as international trade, to analyze its unique role in the economic development of both New Mexico and Missouri, and to evaluate the influence of Mexican gold and silver on the economic development of Missouri. The economic development of the United States between the beginning of the Revolution and the Civil War was attended by uncertainty, risk, and experimentation. The United States was exceedingly poor in specie, had almost no liquid capital, and its international credit rating was not well established. The United States currency system was based on paper money in contrast to that of New Spain and Mexico.Chapter I discusses the vagaries of a paper currency system, especially when the young nation was trying to establish its international credit rating, fight a war with England, and develop a wilderness on its western frontier. The problems were made more difficult because citizens of the United States lacked not only financial experience, but also adequate liquid capital. Mexico, however, had gold and silver ores and the capacity to mint coin. Northern Mexico was handicapped by Spanish commercial policies; until independence in 1821, it had little industrial capacity and almost no mercantile facilities. Chapter II provides an overview of New Mexico in 1820. Taken together, these two chapters show the mutual economic benefit to be derived by both New Mexico and Missouri from the development of the trade.Chapter III is a detailed chronological study of the events of the first decade of the trade between Santa Fe and Missouri. It brings together into one place the most up-to-date information on the participants in the trade from 1820-1830. Comparisons are made between the Anglo-American sources and the Spanish-American records; an effort is made to fill in as many gaps as possible and to check the accuracy of both sets of records. In this chapter the chief participants in the trade are studied.Chapter IV studies the nature of banking, credit, and currency problems in Missouri. It shows the tendency of people on the frontier of the United States to resort to experimentation in their efforts to deal with deflation, recession, and depression. Particular emphasis is given the panics of 1819 and 1837. The chapter also shows the effects in St. Louis of rapid growth and inflation. The unique role of Mexican gold and silver in the establishment of Missouri finance is studied. Between 1830 and 1840, as Chapter V shows, the merchant-capitalists of St. Louis replaced the farmer-merchants of the period 1820-1830, and the exchange of trade goods for Mexican specie and bullion increased steadily. The specie flow to Missouri reversed the usual United States frontier economic condition. Missouri accumulated enough liquid capital to launch St. Louis into position of "the Gateway to the West" as the great movement of people to California and Oregon began in the 1840's.In Chapter VI, a comparison of coin in circulation in the United States and coins minted by the United States correlates with the specie flow from Mexico to Missouri. The data vindicates the thesis that the key to St. Louis' financial success in the early years of Missouri's statehood lay in its trade with northern Mexico which resulted in the accumulation of the most valuable of all commodities, gold and silver specie and bullion.Thesis (Ph. D.