Commerce During the Present Century.
The Royal Company.
A Mestizo Merchant.
The closing of the Chinese shops in Manila and the expulsion of the Chinese merchants was the beginning of a new state of things in the islands. A joint-stock company was formed to buy clothing and staple goods for the Philippines, and sell at 30 per cent. advance. But the Spaniards lacked the keenness at bargaining that their predecessors possessed, and the company soon failed. Another company followed, under the favor of the King of Spain, who took a large block of its shares and gave it abundant privileges and monopolies. It—the Royal Company of the Philippines, fully organized in 1785—was given exclusive rights of trade, aside from the galleon trade with Acapulco. Foreign ships were not allowed to bring goods from Europe to the Philippines, though they could land Chinese and Indian goods.
There were old treaties that prohibited Spain from seeking the Pacific by the eastern route, her trade being via Cape Horn and Mexico. Charles III. quashed these treaties in favor of the Royal Company, whose ships were allowed to sail by way of the Cape of Good Hope. No one seriously objected—Spanish commerce was not worth an objection. With its large capital and its privileges the Royal Company should have flourished. But it never did. Yet it benefited the Philippines, and gave a great impulse to agriculture, on which large sums of money were expended. The culture of sugar, tobacco, cotton, indigo, and pepper was much developed, and these long remained the staples of many provinces.
The company had splendid opportunities, but failed to make the most of them. It broke down the vexatious prohibition to trade with the East and with Spain, which had checked Philippine enterprise, but the dry rot of Spanish incapacity caused its decay. Influence and intrigue brought men into the company that lacked ability, but received large salaries. As a result, it lost the power to compete with experts, while the contraband trade ate into its profits, and the merchants of Manila opposed its monopolies. Finally, in 1830, its privileges were taken away, and the island-colony was opened to the trade of the world. Five years afterward the Company ceased to exist.