The first encomenderos, conquerors, and settlers of the islands, and their issue, are honorably supported by the products of their encomiendas, and by certain means of gain and trading interests that they possess, as do the rest of the people. There are a great number of them, each one of whom lives and possesses his house in the city and settlement of Spaniards in whose province he has his encomienda. This they do in order not to abandon their encomiendas, and thus they are nearer the latter for their needs and for collections.

Now but few of the first conquerors who gained the country and went there for its conquest with the adelantado Miguel Lopez de Legaspi remain alive.

The soldiers and officers of war and of naval expeditions formerly consisted of all the dwellers and inhabitants of the islands, who rendered military service without any pay or salary. They went on all the expeditions and pacifications that arose, and guarded the forts and presidios, and cities and settlements. This was their principal exercise and occupation. They were rewarded by the governor, who provided them with encomiendas, offices, and profits of the country according to their merits and services. [226]

At that time the soldiers of the islands were the best in the Indias. They were very skilful and well-disciplined by both land and sea, and were esteemed and respected by all those nations. They gloried in their arms, and in acquitting themselves valiantly.

Afterward, when Gomez Perez Das Mariñas entered upon the government of the Filipinas, he founded the regular camp of four hundred soldiers: the arquebusiers, with pay of six pesos per month; the musketeers, with eight pesos; six captains, with annual pay of four hundred and twenty pesos apiece; their alféreces, sergeants, corporals, standard-bearers, and drummers, with pay in proportion to their duties; one master-of-camp, with annual pay of one thousand four hundred pesos; one sargento-mayor with captain's pay; one adjutant of the sargento-mayor and field-captain, with monthly pay of ten pesos; two castellans; commandants of the two fortresses of Manila, with four hundred pesos apiece annually; their lieutenants; squads of soldiers and artillerymen; one general of galleys, with annual pay of eight hundred pesos; each galley one captain, with annual pay of three hundred pesos; their boatswains, boatswains' mates, coxswains, alguacils of the galleys, soldiers, artillerymen, master-carpenters, riggers, sailors, conscripts, [227] galley-crews of Spanish, Sangley, and native convicts, condemned for crimes; and, when there is lack of convicts, good rowers are obtained from the natives for pay, for the period of the expedition and the occasion of the voyage. [228]

In the vessels and fleets of large vessels for the Nueva España line, the ships that are sent carry a general, admiral, masters, boatswains, commissaries, stewards, alguacils, sergeants of marine artillery [condestables], artillerymen, sailors, pilots and their assistants, common seamen, carpenters, calkers, and coopers, all in his Majesty's pay, on the account of Nueva España, from whose royal treasury they are paid. All that is necessary for this navigation is supplied there. Their provisions and appointments are made by the viceroy; and this has hitherto pertained to him, even though the ships may have been constructed in the Filipinas. They sail thence with their cargo of merchandise for Nueva España, and return thence to the Filipinas with the reënforcements of soldiers and supplies, and whatever else is necessary for the camp, besides passengers and religious, and the money proceeding from the investments and merchandise. [229]

After the establishment of a regular camp for guard and expeditions, the other inhabitants, dwellers, and residents were enrolled without pay under the banners of six captains of the Filipinas, for special occasions requiring the defense of the city. But they were relieved of all other duties pertaining to the troops, unless they should offer of their own accord to go upon any expedition, or volunteer for any special occasion, in order to acquire merits and benefits, so that they may be given encomiendas that become vacant, and offices, and the means of profit of the country. They are not compelled or obliged to do this, unless they are encomenderos. Consequently all have given themselves to trading, as there is no other occupation, but they are not unmindful of military service.

His Majesty prohibits all who are in his pay in the military forces of the islands from engaging in commerce; and orders the governor not to allow this, or permit them to export goods to Nueva España. If the governors would observe that order, it would not be amiss. [230]

The merchants and business men form the bulk of the residents of the islands, because of the great amount of merchandise brought there—outside of native products—from China, Japon, Maluco, Malaca, Sian, Camboja, Borneo, and other districts. They invest in this merchandise and export it annually in the vessels that sail to Nueva España, and at times to Japon, where great profits are made from raw silk. Thence on the return to Manila are brought the proceeds, which hitherto have resulted in large and splendid profits.

Through the very great increase of this trade—which was harmful and prejudicial to the Spanish merchants who shipped goods to Peru and Nueva España, and to the royal duties collected on the shipments from España—and through the business men of Mexico and Peru having become greedy of trade and commerce with the Filipinas, by means of their agents and factors, so that the trade with España was ceasing in great measure, and the merchants were sending to the Filipinas for their investments great consignments of silver, which by that means flowed yearly from his Majesty's kingdoms, to fall into the possession of infidels: all persons of Nueva España and Peru were prohibited from trading and engaging in commerce in the Filipinas, and from taking the Chinese merchandise to those regions. [231] Permission was given to the inhabitants and residents of the Filipinas that they alone might trade in the said merchandise, and export it. They are to take these goods themselves, or send them with persons who belong to the islands, so that they may sell them. From the proceeds of the said merchandise, they may not carry to the Filipinas more than five hundred thousand pesos each year. [232]