Of the demonstration which was made in the year 1712, when the Duke de Linares was viceroy, of the illegalities in the trade permitted to Filipinas, and the difficulty of preventing them.
41. On May 27, 1710, a despatch was sent through the private correspondence office [via reservada], addressed to the Duke de Linares, viceroy of Mexico, directing him, on account of the pressing necessities of war, to grant indult of the penalties for the illegalities (specifying those which had been committed in notable transgression of the law) with which the Filipinas commerce had been and was still carried on—not only in the commodities which were shipped, but in the silver which was sent back for them—neglecting the rules and orders that had been given for that commerce. In consequence of this, by order of the viceroy, an investigation was made in Mexico by an auditor in the year 1712, of both the shipment and the returns; and as a result of this was shown the great illegality with which the stuffs from China had been traded. It appeared that the goods that came without registration were allowed to enter on the declaration of them; that, contrary to the permission, all or the greater part of the merchandise in this commerce belonged to citizens of Mexico, Puebla and other parts of that kingdom, and not to the native citizens of the islands; that while the permission limited the returns to only 600,000 pesos, the amount thus permitted had been exceeded in some years by two millions, and in every year by a considerable amount; and that no investigation had been made of the chests carried by the mariners of those ships, to see whether they contained more than 30 pesos’ worth of goods.
42. Although with this investigation and the accompanying report of the auditor who made it (which he sent to the viceroy), and the opinion given by the fiscal of the Audiencia when he saw it, that court was of the opinion that the indult should be granted to the traders of Mexico who proved to be guilty, that body of traders refused such benefit, supposing that against its individuals such guilt would not be proved as to require compurgation [by the grace] of the indult; and the viceroy Linares, in a letter of August 4, 1714, in giving account of these investigations, made the following statement:
43. “By the last trading-fleet [flota] I informed your Majesty of the progress of the investigations which had been begun in regard to the commerce of Philipinas, and of the measures which I had taken with the merchants of this city in regard to the indult. They assured me that, as they were included in the offense, and the access to his Majesty’s clemency was so open, they would avail themselves of this favor, in order not to suffer another investigation or expose themselves to an experience of the severity of the penalty, since it was easier to take refuge in the sovereign asylum of your Majesty in the indult. But as the opinions of men differ, and their fears are wont to range themselves on the side of their advantage, the notorious nature of the offense was not enough to convince them, or the prohibition of the law to persuade them, on account of their persisting in the belief that [this very] tolerance sufficed to keep them from incurring [the penalties of] guilt; and that the fact that the ships came [to trade] without conforming to the orders of your Majesty afforded to the [Mexican] traders a certain indult for not making any change in the custom [regarding it]—alleging that the tolerance [of the government] was a matter of convenience, and insisting that they had not traded directly in the islands. With this the merchants resolved in a special conference, convened for this purpose by the consulate, that they would not avail themselves of the indult, leaving in my hands the liberty to proceed against all of them, hearing them in [the courts of] justice.
“Having learned of this decision, and being certain that many of the merchants were refusing the contribution as a body, and covering the indults as individuals, in order to secure greater advantage to themselves, I directed the auditor who had had charge of this investigation to summon them—each so separately and independently of the others that even the knowledge of this proceeding could not be imparted to them; and beginning with those who were distinguished by either wealth or position, whose opinion might be either a guide or a check to the others, in order that, these having once accepted the indult, their submission and connivance might facilitate the acquiescence of the others.
“I was influenced to this opinion by the difficulty of proceeding against all of them; for, as they number almost five hundred, and among them are the most prominent merchants, any procedure against them would cause a great sensation in the community, even though the cause should justify it, especially [if it occurred] at the despatch of the trading-fleet. [Also I was influenced by other considerations,] knowing by experience the losses that the merchants suffer through the irregular condition of the trade and the failure of the mineral products to make these good; their valuing more highly the actual balance in their favor from some investments which give prompt returns than their hopes from others which [various] causes might naturally retard; [the desirability of] gaining the tranquillity of the commonwealth by the voluntary contribution of its individuals; and by this means rendering more worthy of their regard the royal clemency of your Majesty, and pledging them to gratitude at receiving as a kindness the indult which menaced them as a penalty.
“Those who probably are included in this infraction of the law may be reduced to three classes of persons: those whose wealth supplies them with funds for trading, and who therefore risk these for heavy investments, without fearing lest they be ruined or left without funds for other purposes; others of the middle class [as merchants], who under the protection of the preceding class expose to risk a part of what they possess, and content themselves with moderate gains, because their means do not allow them to make greater outlay; and still others (and the most numerous), who are very poor and are unable to hazard any money, but who go to the port of Acapulco and there purchase what they can for the comfort of their families and their own petty affairs—and these are the majority [of the transgressors], among whom are many who are [now] absent, dead, or bankrupt.
“In the books of the carriers[7] in which is set down the silver which has been carried to the port [of Acapulco], and the merchandise which has been transported to this kingdom [of Mexico]—all money is included without any distinction, without specifying the coin which goes destined for the fair at Acapulco and that which must be sent to the islands; and this produces confusion, which it is very difficult to clear up. For if they [i.e., the merchants] are charged with this remittance of coin, they say that the money is for the fair, which is lawful and allowed; if they are obliged to admit that they are sending coin and are not receiving goods, they say that it is for the balances [due] on commissions from the citizens of Manila. As this traffic goes on under a confidence system [confiánza], in which there is neither written document which can certify the remittances, nor register in which the real owners can be declared, nor bill of lading by which the right of possession may be known—the result is, that the citizens of Manila send as their own the bales which belong to those of Mexico, and the latter send money as if it belonged to the citizens of Manila, produced from those bales which were not their own. And as this trade is carried on publicly with this dissimulation, and it will not be easy for any one to ascertain the inside of it and the agreements which are privately made, it follows from this that there will always be difficulty in proving guilt, and that the merchants will persist in trying to persuade the officials that the money which they send is intended either for the fair at the port, or for the payment of [debts to] its owners.
“From this confusion—the depth of which cannot be ascertained, because there is no kind of proof which will make it evident—there results only the suspicion against them, a possibility which has made this negotiation[8] more opportune to them, not only because money makes it all easy, but because it is not supposed that very large investments can be made with a small remnant of funds.[9] But as this remains a matter of supposition (although public report states otherwise), I must confine myself to judicial terms, in order [either] to acquit or to condemn. The proportion of the indult must always remain a difficult thing, because there has been no accurate rule for deciding it, nor could it be imposed in a definite amount, in order that the contribution might be calculated in accordance with it. For this reason, we estimated the amounts, averaging their judgment and my own, from which about 15,000 pesos have resulted; and the persons who have furnished these sums are secure as to the despatch of their affairs, in virtue of the powers which your Majesty confers on me. For this I send also the record of proceedings, in which appear [the names of] other individuals besides those included in the memorandum [minuta]. I must tell your Majesty that most of them are very poor, and that what they possess is not sufficient to pay a contribution in any amount; and it, after investigation, either then lack of means or their innocence rendered the exaction of the penalty impossible, I considered it best not to engage the [royal] authority in making extortions from the vassals.
“Your Majesty has given notice, in your royal decree of May 27, 1710, that frauds in the commerce consist in the excess of the shipments [over the amount permitted], and in what relates to the money which is transported by the ships of Philipinas to each of those countries, and that this irregularity depends on the judges who at Acapulco receive and despatch the ships. Although I must acquiesce in these judgments, and, no matter how much care the viceroys take to confer these powers on officials of zeal, intelligence, and energy, it is possible for self-interest to corrupt them, I also grant that it is difficult to ascertain their transgressions—because, as there is but the one official before whom the declarations of the goods and the registrations of the silver are made, it is very possible that he may have an interest in one or the other of these—either recording a smaller quantity of goods, in order that there may be smaller duties; or not registering the silver, which he can allow to be shipped outside the amount permitted. But as in both cases there is no one to make objection besides the very parties who are interested—and it suits these to be silent, because their profit depends on that—nor is there a witness to state what occurs, nor document to prove it, the transaction goes on, under a system of confidence to which neither proof nor even suspicion can be opposed.