Scanty exports.In a word, the only manufactured articles annually exported from the Philippine Islands are eight to twelve thousand pieces exports of light sail cloth, two hundred thousand pounds of abaca cordage assorted, and six hundred carabao hides and deer skins, which can scarcely be considered in a tanned state/ for, although the Royal Company, from the time of their establishment, long continued to export considerable quantities of dimities, calicos, stripes, checks, and coverlids, as well as other cotton and silk goods, it was more with a view to stimulate the districts of Ilocos to continue in the habit of manufacturing, and thus introduce among the inhabitants of that province a taste for industry, than the expectation of gain by the sale of this kind of merchandise either in Spain or any of the sections of America. At length, wearied with the losses experienced by carrying on this species of mercantile operations, without answering the principal object in view, they resolved, for the time being, to suspend ventures attended with such discouraging circumstances.

Need of encouragement.Notwithstanding so many impediments, it would not, however, be prudent in the government entirely to abandon the enterprise, and lose sight of the advantages the country offers, or indeed, to neglect turning the habitual facilities of the natives to some account. Far from there existing any positive grounds for despairing of the progress of manufacturing industry, it may justly be presumed that, whenever the sovereign, by adopting a different line of policy, shall allow the unlimited and indistinct settlement of all kinds of foreign colonists, and grant them the same facilities and protection enjoyed by national ones, they will be induced to flock to the Philippine Islands in considerable numbers, lured by the hope of accumulating fortunes in a country that presents a thousand attractions of every kind. Many, no doubt, will preferably devote themselves to commerce, others to agricultural undertakings and also to the pursuits of mining, but necessarily some will turn their attention and employ their funds in the formation of extensive manufactures, aided by intelligent instructors and suitable machinery. The newly-introduced information and arts being thus diffused, it is natural to expect they will be progressively adopted by a people already possessing a taste and genius for this species of labor, by which means manufacturing industry will soon be raised from the state of neglect and unprofitableness in which it is now left.

Internal commerce handicapped.The circulation of the country productions and effects of all kinds among the inhabitants of the provinces, which, properly speaking, constitutes their internal commerce, is tolerably active and considerable. Owing to the great facilities of conveyance afforded by the number of rivers and lakes, on the margins of which the Filipinos are fond of fixing their dwellings, this commerce might be infinitely greater, if it was not obstructed by the monopoly of the magistrates in their respective districts and the unjust prerogative, exercised by the city, of imposing rates and arbitrary prices on the very persons who come to bring the supplies. Nevertheless, as the iniquituous operations of the district magistrates, however, active they may be, besides being restricted by their financial ability, regularly consist of arrangements to buy up only the chief articles, and those which promise most advantage, with least trouble; as that restless inquietude which impels man on, under the hope of bettering his condition, acts even amidst rigor of oppression, a certain degree of stimulus and scope is still left in favor of internal trade.

Inter-island traffic.Hence it follows, that there is scarcely an island or province, that does not carry on some traffic or other, by keeping up relations with its neighbors, which sometimes extend as far as the capital; where, in proportion as the produce and raw materials find a ready market, returns suitable and adequate to the consumption of each place, respectively, are obtained. If, however, it would be difficult to form an idea, even in the way of approximation, of the exchanges which take place between the various provinces, a task that would render it necessary to enumerate them, one by one, it is equally so to make an estimate of the total amount of this class of operation carried on in Manila, their common center. Situated in the bottom of an immense bay, bathed by a large river, and the country round divided by an infinite number of streams and lakes descending from the provinces by which the capital is surrounded, the produce and effects are daily brought in and go out of suburbs so extended in a diversity of small vessels and canoes, without its being possible to obtain any exact account of the multiplicity of transactions carried on at one and the same time, in a city built on so large a scale.

Local markets.Besides the traffic founded on ordinary consumption, the necessity of obtaining assortments of home-manufactured as well as imported goods, in order to supply the markets, known by the name of tianguis, and which are held weekly in almost every town, there is another species of speculation, peculiar to the rich natives and Sangley mestizos, an industrious race, and also possessed of the largest portion of the specie. This consists in the anticipated purchase of the crops of indigo, sugar, rice, etc., with a view to fix their own prices on the produce thus contracted for, when resold to the second hand. A propensity to barter and traffic, in all kinds of ways, is indeed universal among the natives, and as the principal springs which urge on internal circulation are already in motion, nothing more is wanting than at once to destroy the obstacles previously pointed out, and encourage the extension of luxury and comforts, in order that, by the number of the people’s wants being increased, as well as the means of supplying them, the force and velocity of action may in the same proportion be augmented.

External commerce.Under “External Commerce” generally are comprised the relations the Philippine Islands keep up with other nations, with the Spanish possessions in America, and with the mother country; or, in other words, the sum total of their imports and exports.

Outside deterrents.Many are the causes which, within the last ten or twelve years, have influenced the mercantile relations of these Islands, and prevented their organization on permanent and known principles. The chief one, no doubt, has been the frequent and unforeseen changes, from peace to war, which have marked that unhappy period, and as under similar circumstances merchants, more than any other class of persons, are in the habit of acting on extremes, there have been occasions in which, misled by the exaggerated idea of the galleon of Acapulco, and anxious to avail themselves of the first prices, generally also the highest, foreign speculators have inundated Manila with goods, by a competition from all quarters; and others, owing to the channels being obstructed, when this market has experienced an absolute scarcity of commodities, as well as of funds necessary to continue the usual and almost only branch of commerce left. The frequent failure of the sugar and indigo crops, has also in many instances restrained the North Americans and other neutrals from coming to these Islands with cargoes, and induced them to prefer Java, where they are at all times sure of finding returns. Besides the influence of these extraordinary causes on the uncertainty and irregularity of external commerce, no small share must also be attributed to the strangeness of the peculiar constitution of the country, or the principles on which its trade is established.

Domestic discouragements.Scarcely will it be believed, in the greater part of civilized Europe, that a Spanish colony exists between Asia and America, whose merchants are forbidden to avail themselves of their advantageous situation, and that, as a special favor only are they allowed to send their effects to Mexico, once a year, but under the following restrictions. It is a necessary condition, that every shipper shall be a member of the Board of Trade (Consulado), and therein entitled to a vote, which supposes a residence of some years in the country, besides the possession of property of his own to the amount of $8,000. He is compelled to join with the other members, in order to be enabled to ship his goods in bales of a determined form and dimensions, in one single vessel, arranged, fitted out, and commanded by officers of the royal navy, under the character of a war ship. He has also to contribute his proportion of $20,000, which, in the shape of a present, are given to the commander, at the end of every round voyage. He cannot in any way interfere in the choice or qualities of the vessel, notwithstanding his property is to be risked in her; and what completes the extravagance of the system, is, that before anything is done he must pay down twenty-five or forty per cent for freight, according to circumstances, which money is distributed among certain canons of the church, aldermen, subalterns of the army, and widows of Spaniards, to whom a given number of tickets or certified permits to ship are granted, either as a compensation for the smallness of their pay, or in the way of a privilege; but on express conditions that, although they themselves are not members of the Board of Trade, they shall not be allowed to negotiate and transfer them to persons not having that quality. In the custom house nothing being admitted unless the number of bales shipped are accompanied by corresponding permits, and as it besides frequently happens that there is a degree of competition between the parties seeking to try their fortune in this way, the original holders of the permits very often hang back, in such a manner that I have seen $500 offered for the transfer of a right to ship three bales, which scarcely contained goods to the amount of $1,000. Such, nevertheless, is the truth, and such the exact description of the famous Acapulco ship, which has excited so much jealousy among the merchants of Seville and Cadiz, and given rise to such an infinite number of disputes and lawsuits.

Business irregularities.So complete a deviation from the rules and maxims usually received in trade, could not fail to produce in the Philippine Islands, as in fact it has, effects equally extraordinary with regard to those who follow this pursuit. The merchant of Manila is, in fact, entirely different from the one in Cadiz or Amsterdam. Without any correspondents in the manufacturing countries and consequently possessed of no suitable advices of the favorable variations in the respective markets, without brokers and even without regular books he seems to carry on his profession on no one fixed principle, and to have acquired his routine of business from mere habit and vague custom. His contracts are made out on stamped paper, and his bills or promissory notes no other than long and diffuse writings or bonds, of which the dates and amounts are kept more in the shape of bundles than by any due entry on his books; and what at once gives the most clear idea of this irregularity is the singular fact that, for the space of twenty-five and possibly fifty years, only one bankrupt has presented the state of his affairs to the Board of Trade, in conformity to the regulations prescribed by the general Statutes of Bankruptcy, whereas, numbers of cases have occurred in which these merchants have wasted or secreted the property of others with impunity. Hence have arisen those irregularities, subterfuges and disputes, in a word, the absence of all mercantile business carried on in a scrupulously punctual and correct manner. Hence, also, have followed that distrust and embarrassment with which commercial operations are attended, as well as the difficulty of calculating their fluctuations. On the other hand, as in order to send off an expedition by the annual ship to Acapulco, the previous consent of the majority of the incorporated merchants is necessary, before this point is decided, months are passed in intrigues and disputes, the peremptory period arrives, and if the articles wanted are in the market, they are purchased up with precipitation and paid for with the monies the shippers have been able to obtain at an interest from the administrators of pious and charitable funds. In this manner, compelled to act almost always without plan or concert, yet accustomed to gain in the market of Acapulco, notwithstanding so many impediments and the exorbitant premiums paid for the money lent, these merchants follow the strange maxim of risking little or no property of their own; and unaware, or rather, disregarding the importance of economy in the expenses and regularity of their general method of living, it is not possible they can ever accumulate large fortunes, or form solid and well-accredited houses.

Merchants discouraged.Thus oppressed by a system, as unjust as it is absurd, and conducting their affairs in the way above described, it is not strange that these gentlemen, at the same time yielding to the indolence consequent on the climate, should neglect or behold with indifference all the other secondary resources which the supplying the wants of the country and the extensive scope and variety of its produce offer to the man of active mind. Hence it follows, as already observed, that the whole of the interior trade is at present absorbed by the principal natives, the Sangley mestizos of both sexes, and a few Chinese peddlers.