The “Philippine Company” monopoly.In 1785, the Compañía de Filipinas obtained a monopoly of the trade between Spain and the colony, but it was not allowed to interfere with the direct traffic between Acapulco and Manila. The desire was to acquire large quantities of colonial produce, silk, indigo, cinnamon, cotton, pepper, etc., in order to export it somewhat as was done later on by the system of culture in Java; but as it was unable to obtain compulsory labor, it entirely failed in its attempted artificial development of agriculture.
Losses by bad management.The Compañía suffered great losses through its erroneous system of operation, and the incapacity of its officials (it paid, for example, $13.50 for a picul of pepper which cost from three to four dollars in Sumatra).
Entrance of foreign ships and firms.In 1789 foreign ships were allowed to import Chinese and Indian produce, but none from Europe. In 1809 an English commercial house obtained permission to establish itself in Manila.[11] In 1814, after the conclusion of the peace with France, the same permission, with greater or less restrictions, was granted to all foreigners.
Trade free but port charges discriminating. In 1820 the direct trade between the Philippines and Spain was thrown open without any limitations to the exports of colonial produce, on the condition that the value of the Indian and Chinese goods in each expedition should not exceed $50,000. Ever since 1834, when the privileges of the Compañía expired, free trade has been permitted in Manila; foreign ships, however, being charged double dues. Four new ports have been thrown open to general trade since 1855; and in 1869 the liberal tariff previously alluded to was issued.
Port’s importance lessened under Spain. Today, after three centuries of almost undisturbed Spanish rule, Manila has by no means added to the importance it possessed shortly after the advent of the Spaniards. The isolation of Japan and the Indo-Chinese empires, a direct consequence of the importunities and pretensions of the Catholic missionaries,[12] the secession of the colonies on the west coast of America, above all the long continuance of a distrustful commercial and colonial policy—a policy which exists even at the present day—while important markets, based on large capital and liberal principles, were being established in the most favored spots of the British and Dutch Indies; all these circumstances have contributed to this result and thrown the Chinese trade into other channels. The cause is as clear as the effect, yet it might be erroneous to ascribe the policy so long pursued to short-sightedness. The Spaniards, in their schemes of colonization, had partly a religious purpose in view, but the government discovered a great source of influence in the disposal of the extremely lucrative colonial appointments. The crown itself, as well as its favorites, thought of nothing but extracting the most it could from the colony, and had neither the intention or the power to develop the natural wealth of the country by agriculture and commerce. Inseparable from this policy, was the persistent exclusion of foreigners.[13] It seemed even more necessary in the isolated Philippines than in America to cut off the natives from all contact with foreigners, if the Spaniards had any desire to remain in undisturbed possession of the colony. In face, however, of the developed trade of today and the claims of the world to the productive powers of such an extraordinarily fruitful soil, the old restrictions can no longer be maintained, and the lately-introduced liberal tariff must be hailed as a thoroughly well-timed measure.
Galleon story sidelight on colonial history. The oft-mentioned voyages of the galleons betwixt Manila and Acapulco hold such a prominent position in the history of the Philippines, and afford such an interesting glimpse into the old colonial system, that their principal characteristics deserve some description.
Chinese part in galleon trade. In the days of Morga, towards the close of the sixteenth century, from thirty to forty Chinese junks were in the habit of annually visiting Manila (generally in March); towards the end of June a galleon used to sail for Acapulco. The trade with the latter place, the active operations of which were limited to the three central months of the year, was so lucrative, easy, and safe, that the Spaniards scarcely cared to engage in any other undertakings.
Favoritism in allotment of cargo space. As the carrying power of the annual galleon was by no means proportioned to the demand for cargo room, the governor divided it as he deemed best; the favorites, however, to whom he assigned shares in the hold, seldom traded themselves, but parted with their concessions to the merchants.
Division of space and character of cargo.According to De Guignes,[14] the hold of the vessel was divided into 1,500 parts, of which the majority were allotted to the priests, and the rest to favored persons. As a matter of fact, the value of the cargo, which was officially limited to $600,000, was considerably higher. It chiefly consisted of Indian and Chinese cottons and silk stuffs (amongst others fifty thousand pairs of silk stockings from China), and gold ornaments. The value of the return freight amounted to between two and three millions of dollars.