Of the demonstration which was made in the year 1712, when the
Duke de Linares was viceroy, of the illegalities in the trade
permitted to Filipinas, and the difficulty of preventing them.
41. On May 27, 1710, a despatch was sent through the private
correspondence office [via reservada], addressed to the Duke
de Linares, viceroy of Mexico, directing him, on account of the
pressing necessities of war, to grant indult of the penalties for the
illegalities (specifying those which had been committed in notable
transgression of the law) with which the Filipinas commerce had
been and was still carried on--not only in the commodities which were
shipped, but in the silver which was sent back for them--neglecting the
rules and orders that had been given for that commerce. In consequence
of this, by order of the viceroy, an investigation was made in Mexico
by an auditor in the year 1712, of both the shipment and the returns;
and as a result of this was shown the great illegality with which the
stuffs from China had been traded. It appeared that the goods that
came without registration were allowed to enter on the declaration
of them; that, contrary to the permission, all or the greater part
of the merchandise in this commerce belonged to citizens of Mexico,
Puebla and other parts of that kingdom, and not to the native citizens
of the islands; that while the permission limited the returns to only
600,000 pesos, the amount thus permitted had been exceeded in some
years by two millions, and in every year by a considerable amount;
and that no investigation had been made of the chests carried by the
mariners of those ships, to see whether they contained more than 30
pesos' worth of goods.
42. Although with this investigation and the accompanying report of the
auditor who made it (which he sent to the viceroy), and the opinion
given by the fiscal of the Audiencia when he saw it, that court was
of the opinion that the indult should be granted to the traders of
Mexico who proved to be guilty, that body of traders refused such
benefit, supposing that against its individuals such guilt would not
be proved as to require compurgation [by the grace] of the indult;
and the viceroy Linares, in a letter of August 4, 1714, in giving
account of these investigations, made the following statement:
43. "By the last trading-fleet [flota] I informed your Majesty of the
progress of the investigations which had been begun in regard to the
commerce of Philipinas, and of the measures which I had taken with the
merchants of this city in regard to the indult. They assured me that,
as they were included in the offense, and the access to his Majesty's
clemency was so open, they would avail themselves of this favor, in
order not to suffer another investigation or expose themselves to an
experience of the severity of the penalty, since it was easier to take
refuge in the sovereign asylum of your Majesty in the indult. But
as the opinions of men differ, and their fears are wont to range
themselves on the side of their advantage, the notorious nature of
the offense was not enough to convince them, or the prohibition of
the law to persuade them, on account of their persisting in the belief
that [this very] tolerance sufficed to keep them from incurring [the
penalties of] guilt; and that the fact that the ships came [to trade]
without conforming to the orders of your Majesty afforded to the
[Mexican] traders a certain indult for not making any change in the
custom [regarding it]--alleging that the tolerance [of the government]
was a matter of convenience, and insisting that they had not traded
directly in the islands. With this the merchants resolved in a special
conference, convened for this purpose by the consulate, that they would
not avail themselves of the indult, leaving in my hands the liberty to
proceed against all of them, hearing them in [the courts of] justice.
"Having learned of this decision, and being certain that many of the
merchants were refusing the contribution as a body, and covering
the indults as individuals, in order to secure greater advantage
to themselves, I directed the auditor who had had charge of this
investigation to summon them--each so separately and independently
of the others that even the knowledge of this proceeding could not
be imparted to them; and beginning with those who were distinguished
by either wealth or position, whose opinion might be either a guide
or a check to the others, in order that, these having once accepted
the indult, their submission and connivance might facilitate the
acquiescence of the others.
"I was influenced to this opinion by the difficulty of proceeding
against all of them; for, as they number almost five hundred, and
among them are the most prominent merchants, any procedure against
them would cause a great sensation in the community, even though the
cause should justify it, especially [if it occurred] at the despatch
of the trading-fleet. [Also I was influenced by other considerations,]
knowing by experience the losses that the merchants suffer through
the irregular condition of the trade and the failure of the mineral
products to make these good; their valuing more highly the actual
balance in their favor from some investments which give prompt
returns than their hopes from others which [various] causes might
naturally retard; [the desirability of] gaining the tranquillity of
the commonwealth by the voluntary contribution of its individuals;
and by this means rendering more worthy of their regard the royal
clemency of your Majesty, and pledging them to gratitude at receiving
as a kindness the indult which menaced them as a penalty.
"Those who probably are included in this infraction of the law may
be reduced to three classes of persons: those whose wealth supplies
them with funds for trading, and who therefore risk these for heavy
investments, without fearing lest they be ruined or left without
funds for other purposes; others of the middle class [as merchants],
who under the protection of the preceding class expose to risk a part
of what they possess, and content themselves with moderate gains,
because their means do not allow them to make greater outlay; and
still others (and the most numerous), who are very poor and are unable
to hazard any money, but who go to the port of Acapulco and there
purchase what they can for the comfort of their families and their
own petty affairs--and these are the majority [of the transgressors],
among whom are many who are [now] absent, dead, or bankrupt.
"In the books of the carriers [72] in which is set down the silver
which has been carried to the port [of Acapulco], and the merchandise
which has been transported to this kingdom [of Mexico]--all money is
included without any distinction, without specifying the coin which
goes destined for the fair at Acapulco and that which must be sent to
the islands; and this produces confusion, which it is very difficult
to clear up. For if they [i.e., the merchants] are charged with this
remittance of coin, they say that the money is for the fair, which
is lawful and allowed; if they are obliged to admit that they are
sending coin and are not receiving goods, they say that it is for
the balances [due] on commissions from the citizens of Manila. As
this traffic goes on under a confidence system [confiánza], in which
there is neither written document which can certify the remittances,
nor register in which the real owners can be declared, nor bill of
lading by which the right of possession may be known--the result is,
that the citizens of Manila send as their own the bales which belong
to those of Mexico, and the latter send money as if it belonged to
the citizens of Manila, produced from those bales which were not their
own. And as this trade is carried on publicly with this dissimulation,
and it will not be easy for any one to ascertain the inside of it
and the agreements which are privately made, it follows from this
that there will always be difficulty in proving guilt, and that the
merchants will persist in trying to persuade the officials that the
money which they send is intended either for the fair at the port,
or for the payment of [debts to] its owners.
"From this confusion--the depth of which cannot be ascertained,
because there is no kind of proof which will make it evident--there
results only the suspicion against them, a possibility which has
made this negotiation [73] more opportune to them, not only because
money makes it all easy, but because it is not supposed that very
large investments can be made with a small remnant of funds. [74]
But as this remains a matter of supposition (although public report
states otherwise), I must confine myself to judicial terms, in order
[either] to acquit or to condemn. The proportion of the indult must
always remain a difficult thing, because there has been no accurate
rule for deciding it, nor could it be imposed in a definite amount,
in order that the contribution might be calculated in accordance
with it. For this reason, we estimated the amounts, averaging their
judgment and my own, from which about 15,000 pesos have resulted;
and the persons who have furnished these sums are secure as to the
despatch of their affairs, in virtue of the powers which your Majesty
confers on me. For this I send also the record of proceedings, in
which appear [the names of] other individuals besides those included
in the memorandum [minuta]. I must tell your Majesty that most of
them are very poor, and that what they possess is not sufficient
to pay a contribution in any amount; and it, after investigation,
either then lack of means or their innocence rendered the exaction
of the penalty impossible, I considered it best not to engage the
[royal] authority in making extortions from the vassals.
"Your Majesty has given notice, in your royal decree of May 27, 1710,
that frauds in the commerce consist in the excess of the shipments
[over the amount permitted], and in what relates to the money which
is transported by the ships of Philipinas to each of those countries,
and that this irregularity depends on the judges who at Acapulco
receive and despatch the ships. Although I must acquiesce in these
judgments, and, no matter how much care the viceroys take to confer
these powers on officials of zeal, intelligence, and energy, it is
possible for self-interest to corrupt them, I also grant that it
is difficult to ascertain their transgressions--because, as there
is but the one official before whom the declarations of the goods
and the registrations of the silver are made, it is very possible
that he may have an interest in one or the other of these--either
recording a smaller quantity of goods, in order that there may be
smaller duties; or not registering the silver, which he can allow
to be shipped outside the amount permitted. But as in both cases
there is no one to make objection besides the very parties who are
interested--and it suits these to be silent, because their profit
depends on that--nor is there a witness to state what occurs, nor
document to prove it, the transaction goes on, under a system of
confidence to which neither proof nor even suspicion can be opposed.
"In some accounts, I have learned, certain sums have been credited to
your Majesty, under the title 'Amounts in excess of the permission,'
which is ten per cent of the excess over the 600,000 pesos which
your Majesty allows to be transported; but whether these items are
punctually credited or not, or whether under cover of these other and
larger sums were received which were profitable to the judge, it is
not easy to ascertain. I take abundant precautions to prevent these
things from being done, but if they are done, or are hidden, I cannot
prevent it; and I go on, sincerely believing that the minister [in
whose charge this matter is], of whose fidelity I have had experience
in other directions, will exercise that faithfulness in this also.
"For the future, your Majesty commands that the merchants refrain
from transgressing in what is prohibited; but the very nature of the
subject leaves some openings that cannot be repaired, through which
the greed for gain thrusts itself, not only among the officials but
in the merchants; and thus the most sagacious understanding does
not perceive or suspect them, and thus does not correct them. I will
specify some cases to your Majesty which will make this point clear.
"Your Majesty commands in law 12 on 'Navigation and commerce of
Philipinas,' in the compilation of laws of the Indias: 'That those
who desire to go to Philipinas must give bonds, for their residing
in the islands for at least eight years; and the viceroy shall allow
them to carry with them their wealth in money, besides the amount of
the general permission.' In virtue of this law, cunning has discovered
two safe and sure ways for perpetuating the commerce of this kingdom
with those islands: the first, in the permission [here given] for
carrying the money; the second, in [the assumption of] citizenship. For
experience has shown that, on pretext of [maintaining] confidence and
friendly relations, the merchants here send out one or more persons,
the profits of them all being contracted for with these persons;
the latter ask permission from the government, and display 50,000 to
70,000 pesos as their own, which actually are amounts entrusted to
them by many persons. Under this supposition, they go over to Manila
with the title of citizens, trade with that money, and regularly ship,
as their own, the goods consigned to the citizens here [in Mexico], to
whom belonged the money [carried by these agents]; and by remittances
of silver and shipments of goods they continue to perpetuate that
commerce--in such manner that, if efforts are made to learn who is
the shipper, it is [always ostensibly] a citizen of Manila, in whom
it is taken for granted that there is no fraud; and if the names of
the consignees are ascertained, answer is made that they are his
agents. But the latter are not agents, but owners, and the former
are not owners, but agents; and in this way the order of things is
reversed, by changing their names and the titles to property, and
the profits remaining in the hands of those who are under prohibition.
"From this difficulty, authorized by the permission of the law, follow
others. For, granting that these agents, even though they have actual
residence in Manila, stay there not with the intention of becoming
permanent settlers, but of living there only during the agencies which
are patronized by the citizens of this kingdom, and that in virtue
of the royal orders of your Majesty they are reputed as citizens: it
[yet] follows that to them, as citizens, is assigned lading space in
the ships, in accordance with the law, and with the royal decree of the
year 1702; and thus they have the greatest facility for continuing in
their trading, because no hindrance is offered to their shipments. They
stand in the way of those who are really citizens and natives of those
islands, whose remonstrances occasioned your Majesty's prohibition;
but as this interference goes on under the shelter of so plausible
a reason, the latter have no way in which to oppose it, nor can they
avoid suffering from it; and what [the authorities] there decide to
belong to the parties interested is, strictly speaking, what has been
entrusted to them by the citizens of Mexico.
"From this result two other and irreparable losses to the commerce of
Manila. The first is, that for the 300,000 pesos of the permission
there is a million of pesos to be invested [therein]; and [these
agents], in order to make the most of their remittances [from Mexico],
and to secure larger profits on their commissions, pay for goods
at excessive prices, and are preferred in the sales. This is what
cannot be done with their own money by the real citizens of those
islands, because they have not [sufficient] capital remaining to
permit adequate gains with high-priced stuffs and enormous costs [for
transportation]--especially when these [citizens] regularly sell [their
goods] at Acapulco (whither they go exposed to loss of their capital),
in order to have the relief of bringing back their wealth in the same
vessel with themselves; and the others [i.e., the agents of Mexicans]
ship to Mexico their goods, the owners of which store them away in
order that time may give them value, for they do not need to sell
these goods at once in order to continue the remittances of money
[to Filipinas]. Thus, the former must necessarily lose, or at least
not gain; and the latter must gain, or at least not lose.
"The second [injury to commerce]: although no more than the
300,000 pesos of the permission, in goods valued in the islands,
can be shipped, experience has shown us that much larger amounts
come thence; and the reason is, because the register contains the
appraisements of the goods so exceedingly low that it is impossible,
unless fraud intervene, that they could be purchased at first hand
at those prices--but with the trick that all the reduction of price
thus made on the goods is squeezed besides into the [amount of the]
permission, and the real account comes separately to the owners. As a
result, the greater part of the space on the ship is occupied by those
agents, although with the pretense that they produce but small amounts;
and all this springs from that original root of allowing citizenship,
and the transportation of their silver, to persons who, without the
intention of becoming settlers, continue there so long as it brings
them profit. The fear of this abuse has led to an investigation at
Acapulco, to learn whether the valuation of the stuffs is the actual
value of them at Manila; and as the witnesses are necessarily from
that city they frankly say that it is so, and enormous quantities of
goods come thence under the pretext of the 300,000 pesos permitted.
"These considerations and the fulfilment of my obligation constrain
me to inform your Majesty that although I have applied all my energy
and watchfulness in order that what was decided by your Majesty
should be put into practice, causing the royal decree of the year
1702 to be proclaimed in Mexico and Acapulco, and allowing two years
of liberty in order that the transaction of this commerce with those
islands may cease, the perversity and selfishness of the merchants is
able to pervert the rule which is seen therein--in public giving out
that they are conforming to the tenor of that decree, and in private
and secret hiding under [their system of] confidence the prohibited
transactions, which cause, besides the royal displeasure of your
Majesty, serious injury to the commercial interests of Spain. For
when there is abundance of the goods from Manila--which on account
of their cheapness are more suitable for the common people--the
value of those from Europe is impaired; and from this results the
stoppage of the trading-fleets, the lack of purchasers, and the
lowering of prices, because the people do not consider the European
goods necessary for their supply [of clothing]. I know very well that
in the islands a change is expected from regulating the commerce,
as has been experienced this year, when the [Manila] ship came in
ballast--the merchants perhaps fearing the threatened punishment of
the confiscation of their goods (as I set forth to your Majesty in
a separate report). From this will result the forced expenditure of
the royal situado and the inefficiency of the royal exchequer; but
as it is certain that those islands cannot maintain themselves with
the situado alone, and that they need the traffic in their goods in
order to obtain a balance of profits and to meet their obligations,
they will have to continue in their shipments, conforming themselves
to the [terms of the] permission, if they do not wish to experience
the penalty of law in punishment for their frauds.
"This year of 1714 is the last one designated and determined by me
for closing and finishing the mutual relations of both commercial
bodies, taking into consideration, however, the capital belonging
to Nueva España in the islands, and that the penalty ought not to
be anticipated, considering the publicity of the prohibition; and,
as nothing is coming this year, it will be necessary to abrogate it
in the following one. All this I place before your Majesty, in order
that in regard to what is contained therein you may be pleased to
apply suitable measures."
In view of this letter from Viceroy Linares, and of other documents,
whose contents do not concern this writing, it was agreed by the
Council (after having listened to the fiscal), by a decree of the
second of March, 1715, that this collection of papers [Expediente]
should be kept until the commissary of Philipinas (who, it was learned,
was coming to the court) should arrive; and that in the meanwhile all
the previous documents which the Council might possess in regard to
this commerce should be collected together.