Hardly had wealth been created by the commerce of the first years
after the conquest, when the policy of restriction found its strong
supporters in the merchants of Cadiz and Seville, who, accustomed to
monopolize the trade with America, looked with jealous eyes upon the
rapidly growing prosperity of Manila, the new center of trade. The
cotton and silk cloths from China were underselling in Mexico those
coming from Spain and Peru, and a good deal of the silver was going,
not to Spain, but to the East; hence, the long drawn-out rivalry
between Manila, on the one hand, and Cadiz, and Seville, on the other,
with America as a third party, also working for her own interest. This
commercial activity was the phenomenon which dominated the Philippines
for over two centuries, and had such marked influence upon its whole
economic development.
Before giving the various decrees passed from time to time to
regulate this commerce, it is advisable to discuss the arguments
advanced by the two sides. The Spanish merchants contended that
the competition of goods coming from the East would destroy the
manufactures on the Peninsula; and, further, that the sending of
silver to the Orient, would drain the supply available for Spain, and,
therefore, in accordance with the mercantilist doctrine, should be
prevented. Manila answered by saying that the goods that she exported
to New Spain were different from those coming from Spain; therefore,
there was really no competition between them. In other words, the
demand for either kind of goods was separate from, and independent
of, the demand for the other. [98] Other arguments were advanced to
prove that Manila should be treated with consideration; the driving
out of the Dutch from the Moluccas by the Philippine government,
[99] the preservation of the missionary conquests in the Far East,
[100] and the maintenance of the prestige of the Spanish crown, [101]
all of these would result from the maintenance of the Philippines,
by making it possible for her to support herself with the galleon
trade. These, added to the fact that the trade with New Spain was
not so profitable as commonly reported [102] on account of the many
perils involved in it, entitled Manila to a more liberal treatment.
Restrictions.
The continued protests of the Spanish merchants finally led to the
prohibition of the shipment from New Spain to Perú or Tierra-Firme
of Chinese cloths brought from the Philippines. [103] "And in order
that what was prohibited in one way might not be obtained in another,
decrees were despatched on February 6 and December 18, 1591, ordering
the total cessation of commerce between the islands and Perú. That
was later extended to Tierra-Firme and Guatimala, by decrees of
January 12, 1593, and July 5, 1595, forbidding the trade of China
and its merchandise to all the Indias, except to Nueva España, which
was left open to the Philippines." [104] In 1593 a decree absolutely
limited the trade between Mexico and the Philippines to 250,000 pesos
annually for the exports to Mexico, and to 500,000 pesos for the
imports from Mexico, [105] to be carried in two ships not to exceed
three hundred tons burden. [106] It was also decreed that "no person
trade or traffic in the kingdom or in any part of China, and that
no goods be shipped from that kingdom to the Philippine Islands, on
the account of the merchants of those islands. The Chinese themselves
shall convey their goods at their own account and risk, and sell them
there by wholesale." [107] Further, it was ordered that "the Chinese
merchandise and articles which have been and shall be shipped from
Filipinas to Nueva España, can and shall be consumed there only,
or shipped to these kingdoms after paying the duties. They can not
be taken to Perú, Tierra-Firme, or any other part of the Indias,
under penalty of confiscation...." [108]
"Fortunately," says Azcarraga, [109] "that tyrannical provision,
meeting with the opposition of the private interests, which it
so greatly injured, and among which were included those of the
authorities and officials who were called upon to enforce it--was
prevented from being carried in force, and thus, in reality, the
Acapulco trade continued unlimited until the year 1604, when, by
another decree the enforcement of previous laws was ordered." [110]
However, evasion of the law was a common practice, and the galleons
usually carried very much more cargo than was allowed. The abuses
became so apparent that in 1635, at the instigation of the merchants
of Cadiz and Seville, a special commissioner was sent to Manila, [111]
who strictly enforced the law. And, in order to prevent all evasions
of the law, it was decreed in 1636 to the viceroys of Perú and New
Spain "to prohibit and suppress, without fail, this commerce and
trade between both kingdoms, by all the ways and means possible." [112]
The rest of the seventeenth century found Manila still engaged in a
great commercial controversy with the merchants of Spain; the endless
number of petitions sent from the Philippines to the king bears ample
testimony to the magnitude of the problem. [113]
Further petition from Manila resulted in the decreeing in 1702 that in
the Philippine Islands two ships should be built, each of 500 toneladas
burden, which should transport the goods permitted to that trade; that
the citizens should be authorized to convey in these to Nueva España
the amount of 300,000 pesos in their products and other commodities,
and on the return to the Philippines to carry 600,000 pesos in silver,
allowing 100 per cent gain minus the duties and expenses. [114] It was
further provided in the decree that in the enumeration of the traders
should be included the Spaniards in the country, and the military men
stationed in the port of Cavite, excluding, however, ecclessiatical
ministers, whether secular or regular, and foreigners. [115] And
he who had no goods to lade was not allowed to give up his right in
favor of a third person, but a new distribution was made. [116]
Induced by protests by Cadiz and Seville based on the ground that the
galleons carried more cargo than allowed, and that the great abundance
of silk in America had caused the decrease of the textile industry,
thus causing the decline of factories in Toledo, Valencia, Seville,
and Granada, a royal decree of January 8, 1718, prohibited the carrying
in the galleon of silk, woven or raw, from China. [117] The only trade
which could be carried on was in linen goods, porcelain, wax, cinnamon,
cloves, and other goods which were not brought from Spain. [118]
More petitions came from Manila, and, finally, a royal decree of
June 17, 1724, repealed that of 1720, and allowed once more the
importation of Chinese silk. [119] An attempt on the part of the
Viceroy of Mexico to put a stop to the importation of Chinese silk
resulted in the royal decree of April 8, 1734, which, besides allowing
trade in silk, increased the amount of the trade permitted to Manila
to 500,000 pesos of investment and 1,000,000 of returns. [120]
The galleon trade continued during the rest of the eighteenth century,
until 1811 when the last galleon sailed from Manila, and 1815, when
the final return voyage was made. The next period in the history of
Philippine commerce is characterized by the opening of the country
to foreign influence.
Before, however, going into the next period let us see who were
entitled to participate in the galleon trade. The right to ship was
known as boleta or ticket, and there were as many boletas as divisions
in the ship. On the average there were 1,500 such divisions, each
worth from 200 to 225 pesos, a good portion of which were given to
the governor-general, the religious corporations, the regidores, the
favorites and privileged, and the widows of retired Spaniards. Those
who had no capital to invest in merchandise sold their boletas to the
merchants, and in spite of prohibition, this practice continued with
impunity. The cargo consisted chiefly of Chinese and Indian silk and
cotton cloths, and gold ornaments, and were sold at one hundred per
cent profit in New Spain. [121] Almost all the merchants secured
loans from the "Obras Pias," [122] which were funds donated for
pious purposes, and two-thirds of which loaned at the following rate
of interest: for Acapulco, fifty per cent; for China, twenty-five
per cent; for India, thirty-five per cent; the rest of the funds
formed the reserve. Besides the merchandise and silver the galleons
transported the official correspondence, arms, troops, missionaries,
and public officials. The officers of the galleon were highly paid. The
commander, who had the title of general, made 40,000 pesos per voyage,
the pilot about 20,000, [123] and the mates, 9,000 each. Most of the
crew were natives. [124]