_Report from the Council of State_
Sire:
Your Majesty was pleased to order that the enclosed reports from the
Council of the Indias and that of Portugal be examined in the Council,
and that they should make such recommendations as they deemed proper;
and having examined them, the members gave their opinions as follows:
The chief comendador [40] of Leon, in a meeting held at Valladolid,
insisted that it was not desirable that there should be trade
from Nueva España to the Filipinas on account of the great drain of
silver thus caused; it is occasioned by the large profits obtained by
investing the silver in the merchandise which comes to those islands
from China--partly through the cheapness of these goods, and partly
through the great value of silver. He also stated the difficulties
which are presented, in that, through this trade, the need for the
merchandise from these regions would cease, and with it the dependence
of those colonies, which it is so important to preserve. It should be
considered that, although the trade of Nueva España with China should
be prohibited, this would be of no use if trade with the Philipinas
were left open; for by that means the Chinese will have an outlet for
their merchandise. Accordingly it seemed best that this should be
prohibited, so that there would be no trade from Nueva España with
the Philipinas. But, as it must also be considered that the total
prohibition thereof would cause a hindrance to conversion and would put
an end to settlement, he thought it best, in order to maintain both
the one and the other, that two merchant ships should be permitted
to go each year from Nueva España to the Philipinas, of the capacity
and under the conditions which are at present in use there. Since,
if the people of the Philipinas are able to trade with Macan, there
will be the risk of their introducing through that channel a trade
with China, and consequently a drain of silver from Nueva España,
it seems best not to give an opportunity for this. On the contrary,
the decree should be observed which was despatched in the time of the
king our lord (who rests in glory), prohibiting the trade between
Macan and the Philipinas, for it is to be believed that this was
issued after mature deliberation and reflection; for that conduct
would be greatly to the satisfaction of the Portuguese, and we would
avoid the difficulties of opening that port to the trade from China,
as it is so important for these kingdoms to maintain what they hold in
Peru and Nueva España. But it would be very desirable to order that
there shall be considerable understanding and correspondence between
the governors, so that in case the ships from one region make port
at the other, driven by the weather, they may be well received and
treated; and also that they may help each other in times of need,
with money and whatever shall be necessary of provisions, munitions,
and other supplies pertaining to the defense of the land and operations
against the enemy.
The Marques de Velada said that if the trade of Nueva España with the
Philipinas could be kept within moderate bounds, and if nothing came
from China to the Philipinas except what was needed there, he would
consider it good; but he regards this as difficult, and therefore
supports the chief comendador of Leon.
The Conde de Chinchon said that the preservation of the Indias
consisted in this, that, through their need of articles which are
not produced there, they always depend upon this country; and it
would be the means of losing them if their wants could be supplied
elsewhere. To think that if there were trade between Nueva España
and the Philipinas there would cease to be any with China would be
an evident mistake, and therefore it should be closed. In so far as
concerns Macan, order should be given that the decree which has been
issued be observed, as the chief comendador of Leon has said. In this
state of affairs it has seemed best to him to advise your Majesty that
it ought to be carefully considered whether it is expedient that each
year there should be carried to Eastern India a million eight-real
pieces for articles of so little importance as are those which are
brought thence; and what plan could be made to obviate this drain of
silver, as we are in such need of it here.
The constable of Castilla said that the reports [from the other
councils] discussed only the trade of the Philipinas with Macan;
and it seemed to him that the plan which had been followed should be
maintained, as it ought to be changed only after having examined and
considered well the pros and cons, and there should be very urgent
reasons for making such change.
Your Majesty will order this to be examined and such measures to be
taken as shall be most satisfactory. Madrid, December 18, 1607.
[_Endorsed, in the king's hand_: "All has been carefully considered,
but the remedy is not easy."]