Chapter III: Preface (2)

189-190. [This memorial may be "reduced to five points: In the first it is proved that, for the preservation of the islands, and the propagation of the Catholic faith in them and in the adjoining regions, their commerce with Nueva España is necessary. In the second, it is declared that for the above result it is necessary that the commerce be carried on and allowed with a capital corresponding to the returns of 1,200,000 pesos every year. In the third, it is made plain that returns to that amount are impossible, if the traffic in the silken fabrics and goods from China, and their transportation, are prohibited to the merchants of Manila. In the fourth, it is demonstrated that no value should be attached to the exaggerated statement that damages will ensue to the commerce of España if that of Manila be allowed to embark and convey silk fabrics to Acapulco. In the fifth, it is explained how desirable is the continuation of the last regulation of the commerce, granted to the islands in the year 1726; and the advantages which result from that ordinance, notwithstanding the representations made by the viceroy." This memorial presents a brief résumé of the various royal orders and decrees and the principal events connected with the Manila-Acapulco commerce during its history, from 1587 to 1726; another, of the investigations made by the viceroy of Mexico regarding the galleon of 1731; and another, of the proceedings of the junta which he called together for discussion of the measures to be taken regarding the galleon of 1734. Then the above five points are considered seriatim, and at considerable length--mainly by restating and enforcing the arguments formerly employed, rather than by adducing new ones. In section i, the king is reminded that the islands serve as a safeguard and defense to Nueva España, and have kept the foreigners, infidels, and pagans of the East from getting a foothold therein by way of the Pacific coast; and it closes thus: "Thus, Sire, if this commerce ceases--the only foundation on which rests the maintenance of these islands--the Spaniards will abandon them; without their protection, the [religious] ministers will be persecuted to the utmost; the works of piety and charity in which the holy house of La Misericordia and the other foundations in Manila distribute enormous sums will cease; the religious orders will be reduced to uselessness; those villages will be desolated, by which your Majesty will lose many vassals; the foreigners and infidels adjoining those countries will make themselves masters of the islands; and (which is most cause for grief), when the fortunate advancement of our religion which has been secured there ceases, those who had embraced the faith will go to seek their living in the lands of the pagans, with evident risk of relapsing into the errors which they had detested. These dangers are worthy of the profound consideration of your Majesty, and cannot be averted if the commerce of Philipinas with Nueva España fails." In section ii, the deputies protest against the returns of 1731 being made the standard for the regular value of this commerce, as the gains of that year's Acapulco fair were phenomenally large. They declare that in order to maintain themselves they need not less than 1,200,000 pesos annually, especially as the number of citizens in Manila is now larger than in former years--in view of which, the amount for which they ask is very moderate, being even less in proportion than it was then. The following statements of population are interesting: in 1636-37, the number of Spaniards in Manila was 230; in 1702, there were 400; and in 1722, 882, a number which has since increased [this memorial being prepared in 1733]. What Manila asks will barely allow to each inhabitant, on the average, an investment of 800 pesos, which is hardly enough for a decent mode of living. What encouragement does this give to Spaniards to settle in such a country, and how can they thus better their fortunes? The opinions of various high officials (including viceroys of Mexico) are cited in support of this claim. Not only the Spaniards who are citizens of Manila are to be considered in this question, but the two millions of Christian natives who depend on the Spanish power, not to mention the 1,500 ecclesiastics who are occupied in maintaining the Catholic faith in the islands. In section iii, it is argued that the people of Filipinas must be allowed the trade in Chinese silks in order to secure any profit from their commerce. Manila claims that the restrictions imposed by the decree of 1720 were procured by the efforts of Cadiz, without the consent of the people of Filipinas, to whom those restrictions brought much distress; that the Acapulco trade was granted to them in the first place in order to attract Spaniards as colonists, in order that intercourse with them might be the means of entrance and extension for the Catholic faith among pagans and infidels; that España produces hardly enough silk goods for its own consumption, and imports much from foreign countries, so that there is no just reason for prohibiting this trade to Filipinas. "Since what the Sangleys chiefly trade in is the silken fabrics and ribbons, if the shipment of these goods to Nueva España is forbidden that is the same as prohibiting intercourse with the Sangleys, because the consumption of the said silks and ribbons is very small, or not any, in Philipinas." The customs duties and alcavalas on the silk trade at Manila amount to some 40,000 pesos a year, which would be lost to the royal treasury by the failure of that trade; it will also have no means with which to buy the rice produced by the Indians. No profit can be made on the linens and other common fabrics prescribed in the decree of 1720, as they are of little esteem in Nueva España, and the demand for them is small, as also is their value, "since in one bale of these goods only the value of sixty or seventy pesos can be contained." If at the Acapulco fair these goods, even when the amount shipped is uncertain, bring prices so low that there is but little profit over the duties, freight-charges, and other costs, it may be imagined how unprofitable this sort of investment will be when (if that decree be enforced) the buyers there regard the cargo as composed mainly of these goods, "and the venders are not able to practice the maxim of concealing the [amount of the] merchandise, in order to secure the highest price for it, its abundance, which lowers the price, not being known." The sayasayas and hose, the only form of silk fabrics permitted to Manila, are productive of but little profit; and even that would be entirely lost if they were shipped in large enough quantities to complete the amount of investment allowed to Manila, for the prices in Nueva España would thus be greatly lowered. Even if this were not so, one voyage of the galleon would so fully provide the warehouses of Mexico that no more would be needed for the next three or four years, which would ruin Manila's market for these goods. It is impossible that of these bulky goods any adequate quantity could be shipped within the number of piezas at present allotted to the citizens of Manila, which, indeed, is all that their one galleon can carry. Manila claims that the viceroy had no right to give the order regarding the galleon of 1734, and that both he and the junta rashly assumed that the prosperous Acapulco fair of 1731 was the standard by which to judge the results of that commerce--when in reality that was an accidental and unusual success; nor did the royal officials of Acapulco propose that the trade in Chinese silks should be prohibited to Manila, but only that the number of 4,000 piezas allowed it should be reduced. Section iv refutes the arguments brought forward by Andalusia against the trade in Chinese silks as injuring Spanish trade and manufactures, declaring them to be exaggerations and misrepresentations of the real facts. "It has very recently been made evident by that very commerce [of Cadiz] that the fabrics of España are not able to supply those provinces [of America], by the fact that in the company which, with the name of 'Philipinas,' has been established in the city of Cadiz, by royal decree of March 29, in this present year of 1733, among the articles and agreements which have been set down therein is one providing that in each ship of those which (without limitation) may be allowed to them for their traffic the silken fabrics from China may be freighted, to the extent of fifty toneladas, a little more or less; and, bringing those goods to these kingdoms [of España], they may sell them therein--not for consumption here, for this is prohibited; but that they may export those goods to foreign countries and to America, where they may be sold and consumed. From this it is evident, in spite of the complaints which the commerce of Cadiz has so often repeated on this point--while the merchants of Manila have never consented to this company, rather, always protesting and speaking against it, and when what may be offered to them is found by experience to be prejudicial to the preservation and maintenance of those islands--that the silk goods which are made in España are of so small amount that they cannot supply America, nor can those of China injure the consumption and satisfactory disposal of the Spanish goods." [4] Manila claims that this new company will draw from the Spanish empire a much greater quantity of silver for the benefit of infidels than Manila can spend in buying the goods which have been sent thence to Acapulco; and that Cadiz has no room for complaints against the other commerce, since its own merchants are interested in this company--and all without the weighty motives which led to the concession of the Philippine commerce, the propagation of the Catholic faith, the preservation of the Spanish power in Eastern Asia, and the advancement of the Christian religion there. The establishment of this "Royal Company of Philipinas," in which traders of Cadiz have shares, shows plainly that all their complaints against the injuries to Spanish commerce from the Manila silk-trade were "merely a pretext for their securing the slender profits which that trade yielded to the islands." The trading-fleets and galleons which are sent out from Cadiz every two years are laden mainly with products made by foreign nations--English, Dutch, Genoese, Venetians, and others--and this traffic alienates from the Spanish crown each year more than eight millions of pesos; and even greater drain of money results from the traffic which those foreign nations carry on in the Indias. [5] Much more money is taken out of Nueva España by the Spanish trading-fleets, laden mainly with articles produced by foreigners and shipped thither by the merchants of Cadiz, than by the Manila galleon which carries thither goods bought from the Chinese. In the former case, the money is used to injure and harass the Spanish power; in the second, it goes to the Chinese, who are able neither to invade Spanish territory nor to aid the enemies of the crown. These foreign trading nations, moreover, carry to China and other countries of Eastern Asia more than four millions of pesos of Mexican and Peruvian coinage, which they spend there for the purchase of silks and other commodities, "in order to introduce these goods into the Indias, either illicitly or through the agency of the traders of Cadiz." In the junta convened by the viceroy of Mexico in February, 1732, one of the leading arguments for continuing the increased permission to Manila was, "that the returns of silver produced by the fabrics of foreign manufacture which the aforesaid [traders of Cadiz] send in fleets and galleons to the Indias were in tens of millions, which from the ports of España pass to foreign dominions, and from these to the infidels of the Orient." The aforesaid Company of Philipinas has obtained permission that in each ship sent out by its members (the number of vessels not being limited) they may convey, besides the goods, the amount of 500 pesos fuertes in silver money--more or less, according to the needs of their business--to be invested in Oriental goods, with freedom to change for gold any surplus that may be left of that capital. [6] This permission leads to the drain of much silver from the country, opens the door for great frauds, and is manifestly unfair to Manila if the latter is to be deprived of its China trade. As for the ruin of the silk industry in España, "the city of Sevilla itself openly confessed (in a memorial dated April 24, 1696) that the ruin of its looms and the deterioration of its commerce arose from the single cause of the manufactures which the French, English, and Dutch had, since the middle of the past century, introduced into their dominions, and from the lack of assiduous industry in the natives of these [kingdoms of España]; and that for this reason those peoples carried to their own countries our wools, in order to return them in the shape of cloths and other goods, which their industry was able to manufacture from those wools. The same thing occurs with the silks which (as we are experiencing) they are introducing into these kingdoms, [made] from the [raw] silk which they obtain here; and they sell in the Orient various stuffs and fabrics, with which usually the people of rank in these kingdoms are clothed; and such people in the Indias wear the goods which the merchants of España convey in fleets and galleons--as may be known by the books of the customs duties, in which appears all the above, and the increased amount of silken fabrics which the foreigners are introducing through the port of Cadiz, and others that open on the Mediterranean Sea." Cadiz is reminded that its commerce penetrates into Peru, Buenos Ayres, Honduras, and other regions which are forbidden to Manila; that it has no more successful fairs in Peru than in Nueva España (indeed, obtaining even larger profits in the latter country); notwithstanding the alleged ruinous competition of Manila; and that the contraband trade carried on in the Western Indias by the foreign industrial nations causes far more damage to Cadiz than does the small amount of trade allowed to Manila. Cadiz has made no complaint against the shipment by Manila of stuffs from India and spices, doubtless because the prohibition of these would injure the trade of the English [7] and the Dutch, from whom Manila buys those goods, and whom Cadiz favors and tries to enrich at the expense of the Philippine vassals of the crown, regardless of the injurious effects of such procedure on the propagation of the faith and the welfare of the former heathen who have been converted to it in the East. Manila asserts that the necessity of buying Chinese goods for the maintenance of the islands, and the increasing competition of the European nations in Eastern markets, have so raised the prices of those goods that Manila no longer can obtain the large profits which they formerly brought in Nueva España, but must now sell them at a very moderate advance over their cost (including of course therein transportation, duties, etc.). The prompt despatch of the Manila galleon from Acapulco has been caused mainly by the necessity of its sailing at certain times to secure favorable winds and weather; but this haste has been an injury to the Manila shippers, "for it hinders them from selling their goods at a higher value, so they often dispose of them, for this reason, at the prices that the Mexicans are willing to pay for them, and at other times leave them for sale on commission [en encomienda], with the danger of losing them, and with the evident arrearage which is caused to the shippers by the lack of the money [which should have been received] from their sale, for use in their investments in the following galleon." The memorial concludes with section v, in which Manila urges, in view of all the foregoing, that the permission of 1726 be continued to the islands, and consequently, that the recent orders of the viceroy of Nueva España regarding the lading of the next galleon be revoked. These orders were at least premature, as the shipments from Manila under the new permission did not begin until 1730, so that the galleon of 1734 was entitled to a cargo of the sort allowed therein; moreover, the viceroy acted against the advice of the junta which he had convened to discuss this question. Manila claims that in 1732 the galleon did not carry back to the islands even what they needed for their maintenance, the returns from its cargo (although that contained the 4,000 piezas of permission) amounting to only 1,100,000 pesos; and in the present year of 1733 the returns will be hardly one-half of what the shippers received, on the average, in the years preceding the new permission--the Acapulco fair being a poor one this year, on account of the large cargoes brought by the fleet from Cadiz, and the large amount of fabrics brought by "the English ship." Manila needs 1,200,000 pesos annually, at the least; and in order to secure that amount needs the extension of trade permitted in 1726. The returns of 1731, as has been proved, cannot be taken as the measure of its value, especially when allowance is made for the possibility of storms, shipwreck, or other disaster to the galleon. Manila also asks that if the returns should fall below 1,200,000 pesos, its annual contribution of 20,000 pesos to the royal treasury be dispensed with. The king is reminded of the great services which the people of Filipinas have always rendered to the crown, in opposing the encroachments of the Dutch and others against the Spanish power in the East, in defending the natives of the islands against the Moro pirates, in contributions for building royal ships and for meeting other pressing needs of the royal treasury, and always freely offering their lives and their property for the defense or aid of the crown--to say nothing of their devotion to the observance and extension of the Catholic faith, their support of missionaries, and their zeal in converting the heathen. Manila asks for the extension in perpetuity of the permission of 1726, with various minor concessions; if this be not granted, then it is asked for another five years, with the proviso that no change be made at the instance of Andalusia only, or without opportunity being given to Manila to express its wishes and set forth its needs.]

191-192. [This memorial was sent by the Council to the fiscal; his reply was handed in on November 10, 1733. He thinks that the islands need indispensably the traffic to Nueva España, including the Chinese silks, notwithstanding the remonstrances of the viceroy of that country; and that the prohibition made by the latter ought to be raised. Moreover, he finds that the royal treasury is the gainer by the new arrangement: the duties up to 1702 amounted to 74,000 pesos, and from that time to 1729, to 100,000 pesos; but in 1730 (the first year in which goods were shipped under the permission of 1726) the duties, including the 20,000 pesos of contribution, were 202,754 pesos, and in the following year 229,552 pesos. He would not make a positive regulation regarding the Manila-Acapulco trade until the five-years' term is completed; but he makes the following recommendations: that the commerce be free in all kinds of goods, not excluding the Chinese silks and ribbons, but that the lading of the galleon be restricted to 3,600 piezas, of which 400 may be in those silk goods and others which do not allow the use of the press; and that the duties on all packages be the same as those specified in the decree of 1726, and that Manila be freed from the contribution of 20,000 pesos. He also recommends that Manila be allowed to send wax in cakes of eighteen (instead of twelve) arrobas net; and that his proposed arrangement be put in force for five years, in order to test its practicability--or, if the king so prefer, that the decree of 1726 be extended for another term of five years.]

193-197. [In this place is presented the informatory report of the royal accountant at Mexico to the viceroy in 1730, because it is frequently cited in this controversy; but it is concerned mainly with the size of the packages on the Manila galleon. [8] It appears that these were measured by the vara de Ribera, [9] instead of the Castilian vara, the former being "longer than the Castilian, by four dedos and part of another;" but allowance was afterward made for this difference. Ardila, the accountant, also recommended to the viceroy the enlargement of Manila's permission to 1,200,000 pesos of returns, and the reopening of the commerce between Nueva España and Peru. The royal Council discussed the fiscal's reply and other documents, and advised the king (December 19, 1733) to order the viceroy to recall his obnoxious orders relative to the galleons of 1734 and succeeding years, and to regulate the cargoes by the decrees in force from 1712 to 1720--"excluding absolutely the regulation of the permission by piezas, and commanding that this be made in future strictly by invoices and sworn declarations." The ministers did not agree on the question of the amount of returns to be permitted to Manila, five being of opinion that no change should be made in the allowance of 300,000 pesos of investment and 600,000 of returns, and the five others advocating an increase to 500,000 and 1,000,000 pesos respectively. (The names of the first five are: Don Manuel de Sylva, the Marqués de Almodobar, Don Antonio de Sopeña, Don Fernando Verdes Montenegro, and Don Francisco Antonio de Aguirre; of the last five, Don Diego de Zuñiga, the Marqués de Montemayor, Don Matheo Ibañez de Mendoza, Don Antonio Alvarez de Abreu, and Don Joseph de Valdiviesso. Abreu was the compiler of the Extracto.) The reasons for each of these opinions are given in detail.]

198-200. [When this opinion was ready to be sent to the king, letters arrived from the governor and Audiencia of Filipinas, remonstrating against the orders of the viceroy regarding the galleon of 1734. At the same time, the Manila deputies at Madrid presented another memorial to the Council, which accordingly held a new conference over this matter. On December 23 (after having consulted the fiscal), they reported to the king their opinion, which they said had not been changed by the aforesaid despatches. The king approved of their advice in regard to recalling the viceroy's orders, and in regard to the controverted point of the amount which should be allowed to Manila, he approved the opinion of Zuñiga and his associates, that of the increase to 500,000 and 1,000,000 pesos. The letters from the governor and Audiencia ask that the cargoes be estimated by piezas, and propose 300 or 400 chests of Chinese silk goods, instead of the 500 formerly asked; the memorial of the deputies urges that the sales for the first three of the five years had averaged only 1,350,000 pesos, and the succeeding ones could not exceed 1,200,000 pesos, which latter sum was necessary for the preservation of the islands.]

201-212. [On February 23, 1734, the Manila deputies presented a new memorial, under eight heads, making various minor requests in regard to the new regulation for the commerce, some of which were granted, and some refused. On April 8, a royal decree was issued making such regulation; [10] after briefly reviewing the various proceedings and documents which had appeared since the decree of 1726, command is given that the viceroy's orders be revoked, and the commerce continued in accordance with the decrees of 1702, 1712, and 1724--prohibiting the valuation on the basis of piezas, and prescribing that this be accomplished by invoices and sworn declarations; and increasing the amount of the trade permitted to Manila to 500,000 pesos of investment and 1,000,000 of returns. As for duties, they shall be paid as commanded in the decree of 1702 (which fixed 100,000 pesos as the amount to be paid at Acapulco for the round trip of the galleon), pro rata therewith on the increase from 300,000 to 500,000 pesos; but this shall be paid as required duties, and not under the name of indult. No alcavala shall be paid on sales at Acapulco, but it shall be paid on goods which shall first be sent to other provinces of Nueva España. The duties are estimated on the basis of about 17 per cent of the returns on the cargo, and as the king pays "the cost of the building, careening, and repairing of the ships, the pay of the crews and officers, and the provisions, supplies, and ammunition needed for each voyage, without receiving more than 44 ducados for each tonelada of the lading allotted, not only will there remain no profit to my royal exchequer, but it will be necessary that it supply a considerable amount in order to maintain and preserve this traffic and commerce to the natives of Philipinas, which is all the bounty that my royal munificence can exercise;" but if the Manila shippers do not wish to accept this adjustment of the duties, they can (as before) pay the exact amount of the duties on each consignment of goods, without any dispensation or remission. No one to whom space has been assigned may transfer it to others, save in the case of poor persons and widows. Any excess of returns over the 1,000,000 pesos shall be divided among the shippers pro rata on their allotments of space and valuations of goods at Manila, and they may carry it back in products and commodities of Nueva España, but not in money; if the returns fall short of the above sum, the deficiency shall not be made up, the royal officials being strictly forbidden to allow any infraction of this rule. Citizens of Nueva España are prohibited under heavy penalties from participating in this trade as shippers, of either goods or money. The measures used in regulating the size of packages shall be those which the Manila shippers have been accustomed to use, allowance having been made for the difference between these and the Castilian standards, as decreed in 1702 and 1733. The committee of distribution at Manila shall be composed of the following persons: the governor of the islands; the senior auditor of the Audiencia, or, as his substitute, the auditor next longest in service; the royal fiscal; the archbishop of Manila, or, as his substitute, the dean of the cathedral; one of the alcaldes-in-ordinary, and one of the regidors, of the city of Manila; and one of the eight arbitrators [compromissarios] who compose the commercial body [11] there--provided that the regidor and the arbitrator be chosen in turn, so that this duty shall fall, successively, on all the members of those respective bodies. Despatches to this effect were sent to the officials of Mexico, Acapulco and Filipinas. (The compiler of the Extracto thinks it worth while to call attention to the opinion of the royal fiscal of Mexico, given upon reading this decree, that it was "a just one, and generally advantageous to both commerces.")]

[At this point (fol. 214 verso-264) is inserted the Memorial informatorio presented to the Council of the Indias in 1637 by Juan Grau y Monfalcón, procurator-general for the Philippine Islands at the court of Madrid; we have already published this document, in our VOL. XXVII, pp. 53-212. Abreu says that he places it here (as "an appendix to Period ii") simply because he did not find it until after the fortieth sheet of the Extracto had been printed; and he speaks of it as "treating of the subjects of that undiscovered memorial" of 136 numbers which was cited in "Period ii" of the Extracto (see our VOL. XXX, p. 25)--"plainly showing that whatever discussion of this matter has occurred in these late years, and what will be said in the future, in regard to the commerce of that region is new talk, but not talk of a new thing [es decir con novedad, pero no decir cosa nueva]." For "Periods i and ii" of the Extracto, which, with Monfalcón's memorial, should be read as a preliminary to the present summary of that work, see our VOL. XXX, pp. 23-109. Cf. the earlier memorial by Monfalcón (1635) in VOL. XXV, pp. 48-73.]

PERIOD X

Relation is made of what occurred in regard to this commerce
from November in 1734 until the present month of May in 1736,
with occasion of the petition made by the consulate and commerce
of Andalucia, proposing to surrender to that of Manila the traffic
and transportation of all the cinnamon, pepper, and cloves which
the kingdom of Nueva España can consume; and that Manila may
ship the chintzes (of fine, middling, and ordinary qualities),
and the silk, raw and spun [beneficiada], if these are separated
from the commerce in the silken fabrics and ribbons of China.

215-221. [It was supposed that the foregoing decree had settled the question of the Manila-Acapulco trade "for many years;" but on November 27, 1735, the king sent to his Council a memorial by Don Joseph Lopez Pintado, consul and deputy of the commerce of Cadiz, and an informatory report which had been made on that subject by the lieutenant-general of marine, Don Manuel Lopez Pintado; on these papers the king asked for the advice and opinions of the Council. The memorial of Cadiz states the two main points of the controversy: the first is, whether or not the commerce of España is injured by the inclusion of the Chinese silks and ribbons in the cargo of the Manila galleon. Cadiz has long claimed that this was so, while Manila answered that that trade was necessary for the maintenance of the islands, "and for the propagation of the holy gospel in them"--which argument, Cadiz says, "has always been the Achilles to oppose the just representations of the commerce of España." The second point is whether, if the silks are prohibited to Manila traders, any goods of equal value remain to them by which they can secure the returns which they claim to need. The first point is stated as in previous remonstrances, that the Manila trade in Chinese silks has ruined both the sale and the manufacture of Spanish silks, especially since the execution of the decree of 1724; the latter goods can now find no market in America, for the Chinese silks have made their way not only into Nueva España but into Peru, the colonies on the northern coast of South America, and all the Windward Islands, "nor can their importation be checked by all the efforts and vigilance of the officials." Manila has probably abused the royal liberality and has transgressed the limits of its permission; for the deputies and appraisers there have valued the goods so low at Manila that at Acapulco they obtain for them three or four times the amount permitted to them by royal decree--for confirmation of which statement is cited the report made by order of the viceroy of Mexico, on August 23, 1731, by Don Francisco de Fagoaga, one of the leading merchants of Mexico, who was a witness of this infraction of law. It is these abuses of the Manila permission which aroused the viceroy to issue the orders of 1732, hoping to check the illegal excess therein. Cadiz now offers to surrender to Manila "forever the traffic and transportation of all the cinnamon, pepper, and cloves which the kingdom of Nueva España can consume," as also all the trade in chintzes of various qualities, and in silk raw and spun; in these Manila ought to find sufficient compensation for giving up the silks, but, even if it does not, its losses cannot compare with those of España from the permission given to Manila to trade in those goods, and the interests of the former ought to be preferred. General Pintado's informatory report makes a bitter complaint of the frauds and infringements in the Manila permission to trade. [12] He states that in the first galleon sent to Acapulco under the regulation of 1726 (which entered Acapulco in the year 1729) [13] goods were confiscated by order of the viceroy to the following amount: 285 bales, 49 bags of cinnamon containing 7,105 libras, more than a thousand arrobas of wax, nineteen chests of silk fabrics, and many other goods. In the second galleon (that of 1730) were confiscated 319 bales, and 694 piezas of various bulky goods--cinnamon, wax, pepper, storax, and porcelain. Cadiz claims that at first (about 1690) the Chinese goods carried to Nueva España were in so small quantity and so inferior quality "that no one valued such goods; nor did these injure the commerce of España or its manufactures, until, two ships of Philipinas having been wrecked, that same viceroy [Conde de Galvez], as a measure of precaution, despatched General Don Andrés de Arriola with a patache to ascertain the cause for the delay in the arrival of those ships; and, that commander having returned to Acapulco in the following year, 1692, with this occasion the citizens of Mexico promoted the plan of furnishing capital for another new ship. Various citizens of Mexico, and others from Perù, went thither, and, carrying specimens of our [Spanish] fabrics, started the establishment [of factories] in Pequin, Cantòn, and China; [they also set the Chinese to work] to make these goods of finer quality, and to manufacture fabrics like those specimens, and of the same quality. Both qualities were introduced [into Nueva España] by that ship and by those which regularly followed it, in proportion to the amount that they found to be consumed in Nueva España; and this was considerable, on account of the fact that four years intervened between the trading-fleet of Conde de Sanrrami and that of Don Ignacio de Barrios, and seven years from that of the latter to the fleet of Don Manuel de Velasco and its return to España. That was the time when the traders of Philipinas reached the height of their traffic in the silk fabrics; and, finding in those years that there was no trading-fleet in Nueva España, they gathered in the rich treasures against which the consulate and commerce of Andalucia have with reason remonstrated." Pintado declares that he has been an eyewitness of these things ever since 1692, and that only during that time has Manila enjoyed this silk trade which it now claims as belonging to it by free possession and long usage. Cadiz has frequently protested against the injury thus caused to the silk industry of España, but has not before exposed the real condition of affairs; but, "even if the 300,000 pesos of the permission which was granted and enjoyed up to the year 1728 inclusive had all been spent for goods of the silk made in China, without [the galleon] carrying anything else, at the prices which they were fairly worth in Manila, and even if twice as much were furnished at these prices, how was that trade [of Manila] capable of supplying [with those goods] Nueva España, the Windward Islands [Islas de Barlobento], the new kingdom of Granada, Tierra-Firme, and Perù, as we have seen for the last forty years, when, as those who are intelligent [in these matters] understand, it is not possible to do so even with two millions' worth of goods of the said class?" Manila is accused of fraud, bad faith, and deceit in the conduct of that trade and in misrepresenting it to the government; and the royal officials, of collusion in the illegal trade, and disobedience to the royal decrees which commanded that the original invoices and sworn statements of goods should be sent to the Council of the Indias. The only way to check this procedure is to prohibit entirely to Manila the trade in Chinese silks; and Cadiz offers to make up this lack by ceding to Manila the entire spice trade in Nueva España. The following estimate, based on the amount of spices carried thither by the trading-fleet, is made of the value of this trade: Of cinnamon, that country needs 250,000 libras annually, which, estimated at eight silver reals a libra (although it has been worth at Manila nine reals), would amount to 250,000 pesos; 100,000 libras of pepper, at one silver real in Manila, 12,500 pesos; 10,000 libras of cloves, at twelve reals, 15,000 pesos; in all, 277,500 pesos, which is somewhat more than half of the amount of investment now allowed to Manila. "It is certain that if only the merchants of Philipinas trade in these commodities, they will advance the price more than 150 per cent, obtaining their money in Acapulco." Besides the spices, they have permission to trade in many other commodities which are generally desirable for the trade with Nueva España, where the consumption of these is great; and there is more than enough of these to fill out the 500,000 pesos' worth of goods allowed them. The result of this arrangement would be to revive the ruined silk industry of España (and "experience makes it plain to us that there is no other fabric than silk, of our own weaving, which can produce any profits"), besides retaining within the domains of España the money which now goes to heathens and infidels. "While the commerce of Philipinas shall last, as it is now carried on, neither the conquests, nor the reduction of the Indians, will proceed with the increase that people confidently believe; but rather these will be diminished," because the Spaniards who have money care only for commerce and not for the propagation of the faith. This is proved by their neglect of the interests of the natives in Luzón; for "we do not see that the Spaniards apply themselves to what is so much their obligation, since they so loudly profess it; and consequently they will not reëstablish the manufactures of cotton fabrics, which can very well be done in those same islands--by which industry the natives furnish this product, and others which are yielded there can be more easily obtained; and in this case it would be money for those citizens if they would apply themselves to this enterprise, instead of the commerce which they have with the Chinese and other infidels." These papers were, as usual, sent to the fiscal, whose reply came before the Council on January 8, 1735. He disapproves the proposals of Cadiz, since the prices of cinnamon and other commodities are liable to fluctuation, and the amount of profit for Manila would be uncertain and variable; cinnamon is a bulky product, and the necessary amount could not be carried in the galleon now assigned to the Manila trade; the merchants could not be sure of a favorable sale at Acapulco, "which at the fairs is secured by the diversity and abundance of commodities;" moreover, the Dutch, from whom the cinnamon was bought, would raise its price as soon as they should learn that the Spaniards of Filipinas were the only ones to whom was permitted the shipment of spices to America. If the Manila shippers failed to secure the full amount for returns, the royal treasury would not receive as much from customs duties as usual, and must therefore make up the resulting deficiency in the situado sent to the islands. "It would also follow that even if the merchants of España should religiously observe the agreement which they propose, of not trading in that merchandise, the illicit importations into that kingdom [of Nueva España] would be attempted with even greater activity; and as in that country there is so general a use of chocolate, in the manufacture of which would be consumed the greater part of the cinnamon, all that extensive kingdom would find itself compelled to buy [cinnamon] at one port only, and through one agency--being always exposed [to the danger] that in a year when the Philipinas ship could not make the voyage (as has happened), or encountered mishaps through accidents which might occur, that country would experience the deprivation of this article of sustenance, or at least a great scarcity in a commodity so generally used, as is well known." The fiscal also reminds the Council that the trade in spices may be shared with the Royal Company of England, which is "authorized to trade, in its annual ship, in the goods which it shall choose, in which it could include the cinnamon, and through this agency introduce it into Mexico; in this it would seriously injure the commerce of Manila during all the time which remains for the fulfilment of this agreement, and would be opposed to the freedom of his Majesty in proroguing it, or making it anew with some other power. Such action could not be hindered by the commerce of España, and as little by the Royal Company of Cadiz, founded by his Majesty on March 29, 1733, which could introduce this commodity into Mexico." The fiscal recommends that a junta be convened in Mexico to discuss this subject, and give their opinions and advice thereon to the Council; and that Manila and Cadiz be invited to send representatives to this conference. On February 9 the Council agreed to send to the deputies of Filipinas a copy of the Cadiz memorial, with a statement of the arguments advanced by General Pintado (but suppressing the name of the author), in order that they might answer it.]

223-224. [The Filipinas deputies made answer to this attack by Cadiz, in a long memorial dated March 30, 1735. Manila claims to have enjoyed the possession of the silk trade with China from the discovery of the islands, and that these goods were never excluded from its trade with Nueva España--to which country that trade was not confined until the decrees of 1587-93--until 1720, when, at the instance of Andalusia, a prohibition of the Chinese silks was made, although it lasted only four years. The charges by Cadiz of frauds in the lading of the Manila galleon have no foundation in fact; the cited statement by Don Francisco Fagoaga does not appear among the documents on the subject, and is "a fanciful supposition;" and the valuations are made by appraisers appointed by the governor of Filipinas, under their solemn oath to fulfil their duties faithfully and well, while the royal fiscal acts as superintendent of both the valuations and the lading. Manila's former assertions refuting in detail, and with citations from the official records of Manila and Acapulco, the accusations of infractions and excess of the permission, are repeated here, as also the statements regarding the Mexican junta of 1732 and the concessions made to the Company of Philipinas, formed among the Cadiz shippers. The overstocking of the markets in Nueva España is caused, not by the silk goods shipped from Manila, but by the enormous quantities of cloth and stuffs (largely manufactured outside of España) sent to that country by the Cadiz merchants; they have sent eighteen or twenty ships [14] in each fleet, although formerly there were but ten or twelve--"on account of which excess his Majesty has finally resolved that only eight shall go in the next armada, without doubt because of the great outcry regarding this by the commerce of Mexico." Moreover, those same traders of Cadiz have secured the concession of fifty toneladas of Chinese silks for each ship that they may send out, to be sold in America; the little that is shipped from Manila ought not to be considered in comparison with that traffic, and is intended, besides, for the poorer classes, who cannot afford to buy the more expensive fabrics. If the Western Indias have been inundated with Chinese silks, it is caused not by the shipments from Manila, but by the great trade in these goods which is carried on by the English and Dutch, who have factories and warehouses in Jamayca and Curazau [i.e., Curaçao], which they supply from China and other Oriental countries with fleets of more than forty ships, and trade those goods in the American islands (as Cadiz is well aware). As for the offer of Cadiz to yield to Manila all the trade in spices to Nueva España, that trade has never been prohibited to Manila nor has it been the exclusive privilege of Cadiz, so the offer amounts to nothing. Nor has Cadiz any right to dictate to Nueva España its source of supply for spices, since both the English and the Cadiz companies have the privilege of trading there in these goods; moreover, large quantities of pepper are produced in the Mexican districts of Chiapa and Tabasco; both these causes tend to injure the sale of spices carried from Manila thither. As these spices (except pepper, which has but little value in any case) are monopolized by the Dutch, they are likely to refuse to sell them to the Filipinas merchants (as has occurred frequently before), because the Dutch need them for lading their own fleets; or they will raise the prices, supposing that Filipinas must buy from them. The cinnamon is so bulky (as it cannot be pressed) that much space on the galleon is thus lost, as well as by the necessity of carrying two-thirds more ballast than usual, because of the light weight of the cinnamon; and the voyage of the Manila galleon is incomparably longer, more difficult, and more perilous than that of the Spanish ships to America. The amount of spices allotted to the galleon by Pintado would fill all its available capacity, leaving no room for any other goods; and it would be impossible for the shippers to secure any profit from such a cargo--for which they could not find a market in Nueva España, for lack of the other goods. Nor would it be possible to dispose of more than half the amount of pepper and cloves which Cadiz proposes for them, since that is enough to supply the needs of that country. In any case, the profit on the spices will be insufficient, if Manila is restricted to these goods, without the silks, to produce the amount which those islands need for their support. This is proved by tabulated statements of the prices, costs, and returns on each one of the three kinds of spices concerned; these we present here in somewhat condensed form. A churlo [15] of cinnamon, of the measure which the commerce of Manila orders to be observed, weighs 150 libras gross, but the net weight is twelve libras less, after deducting the weight of the coverings and wrappings. The cost in Manila is nine silver reals a libra; for the space which the churlo occupies is usually paid forty pesos; for porterage, royal duties, notary's fees, etc., 8 pesos. On the voyage it loses two per cent in weight, so that but 135 libras remain for sale; it brings at Acapulco eighteen reals a libra, amounting to 303 pesos, 6 reals. From this must be deducted the following payments: royal duties, 32 pesos; unlading at Acapulco, notary's fees, etc., 7 pesos, 2 reals; commission to the agent for its sale, at five per cent, 15 pesos, 1 1/2 reals; five per cent royal duties on shipment of the returns to Manila, 12 pesos, 3 reals; two and 1/2 per cent on the net returns, paid to the keeper of the silver, 5 pesos, 6 1/2 reals. From these figures it appears that it costs 203 pesos, 2 reals to place the churlo of cinnamon on shipboard at Manila, and 72 pesos, 5 reals to sell it and return the money to the shipper there; deducting these expenses from the amount received for its sale, the profit of the shipper is but 27 pesos, 7 reals, or about 13 1/2 per cent. Pepper: 100,000 libras of this product make 4,000 arrobas; this quantity (since each pieza is estimated at six arrobas or 150 libras, without the wrappers) makes 666 piezas. Pepper is sold at Manila at one real a libra, so that the pieza costs for purchase 18 pesos, 6 reals; it costs 43 pesos more to place it on the ship, and 18 pesos, 7 reals besides for expenses of sale and shipment of returns--in all, 80 pesos, 5 reals. At Acapulco it would sell at four reals a libra, the pieza, therefore, bringing 75 pesos; the shipper, then, instead of gaining any profit has lost 5 pesos 5 reals by the transaction. Cloves: These are packed in chests containing 150 libras each; the purchase at Manila costs twelve reals a libra, so the chest costs 225 pesos. Add to this the cost of placing it aboard, duties, cost of unlading and sale at Acapulco, and for the shipment of returns, 146 pesos, 7 reals, and the total cost is 371 pesos, 7 reals. The cloves shrink on the voyage, involving a wastage of three per cent; at Acapulco they sell at three pesos a libra, and the 145 1/2 libras thus bring 436 pesos, 4 reals--the net profit to the shipper being 64 pesos, 5 reals, or about 24 per cent. The prices quoted above are based on those which have been current in Manila and Acapulco for the past five years. It is evident, therefore, that the spice trade could not compensate in any way for the loss of that in silks; nor has Cadiz made allowance for the possible failure of a galleon to reach Acapulco, which would ruin the market for the one which should arrive in the following year, since the spices thus lacking would be supplied through the Atlantic ports of Nueva España. The customs duties would be much less on a cargo of spices, and thus impair the royal revenues; for each chest of silk pays 55 pesos for duties, and each bag of cinnamon only 35. The incomes of the Spaniards in Filipinas would be so reduced that they could no longer defend the islands from the Moro pirates, or from the Dutch, who would thus become masters of them; and the Spanish colony and the Christian churches formed among the natives would alike be ruined.]