“In some accounts, I have learned, certain sums have been credited to your Majesty, under the title ‘Amounts in excess of the permission,’ which is ten per cent of the excess over the 600,000 pesos which your Majesty allows to be transported; but whether these items are punctually credited or not, or whether under cover of these other and larger sums were received which were profitable to the judge, it is not easy to ascertain. I take abundant precautions to prevent these things from being done, but if they are done, or are hidden, I cannot prevent it; and I go on, sincerely believing that the minister [in whose charge this matter is], of whose fidelity I have had experience in other directions, will exercise that faithfulness in this also.
“For the future, your Majesty commands that the merchants refrain from transgressing in what is prohibited; but the very nature of the subject leaves some openings that cannot be repaired, through which the greed for gain thrusts itself, not only among the officials but in the merchants; and thus the most sagacious understanding does not perceive or suspect them, and thus does not correct them. I will specify some cases to your Majesty which will make this point clear.
“Your Majesty commands in law 12 on ‘Navigation and commerce of Philipinas,’ in the compilation of laws of the Indias: ‘That those who desire to go to Philipinas must give bonds, for their residing in the islands for at least eight years; and the viceroy shall allow them to carry with them their wealth in money, besides the amount of the general permission.’ In virtue of this law, cunning has discovered two safe and sure ways for perpetuating the commerce of this kingdom with those islands: the first, in the permission [here given] for carrying the money; the second, in [the assumption of] citizenship. For experience has shown that, on pretext of [maintaining] confidence and friendly relations, the merchants here send out one or more persons, the profits of them all being contracted for with these persons; the latter ask permission from the government, and display 50,000 to 70,000 pesos as their own, which actually are amounts entrusted to them by many persons. Under this supposition, they go over to Manila with the title of citizens, trade with that money, and regularly ship, as their own, the goods consigned to the citizens here [in Mexico], to whom belonged the money [carried by these agents]; and by remittances of silver and shipments of goods they continue to perpetuate that commerce—in such manner that, if efforts are made to learn who is the shipper, it is [always ostensibly] a citizen of Manila, in whom it is taken for granted that there is no fraud; and if the names of the consignees are ascertained, answer is made that they are his agents. But the latter are not agents, but owners, and the former are not owners, but agents; and in this way the order of things is reversed, by changing their names and the titles to property, and the profits remaining in the hands of those who are under prohibition.
“From this difficulty, authorized by the permission of the law, follow others. For, granting that these agents, even though they have actual residence in Manila, stay there not with the intention of becoming permanent settlers, but of living there only during the agencies which are patronized by the citizens of this kingdom, and that in virtue of the royal orders of your Majesty they are reputed as citizens: it [yet] follows that to them, as citizens, is assigned lading space in the ships, in accordance with the law, and with the royal decree of the year 1702; and thus they have the greatest facility for continuing in their trading, because no hindrance is offered to their shipments. They stand in the way of those who are really citizens and natives of those islands, whose remonstrances occasioned your Majesty’s prohibition; but as this interference goes on under the shelter of so plausible a reason, the latter have no way in which to oppose it, nor can they avoid suffering from it; and what [the authorities] there decide to belong to the parties interested is, strictly speaking, what has been entrusted to them by the citizens of Mexico.
“From this result two other and irreparable losses to the commerce of Manila. The first is, that for the 300,000 pesos of the permission there is a million of pesos to be invested [therein]; and [these agents], in order to make the most of their remittances [from Mexico], and to secure larger profits on their commissions, pay for goods at excessive prices, and are preferred in the sales. This is what cannot be done with their own money by the real citizens of those islands, because they have not [sufficient] capital remaining to permit adequate gains with high-priced stuffs and enormous costs [for transportation]—especially when these [citizens] regularly sell [their goods] at Acapulco (whither they go exposed to loss of their capital), in order to have the relief of bringing back their wealth in the same vessel with themselves; and the others [i.e., the agents of Mexicans] ship to Mexico their goods, the owners of which store them away in order that time may give them value, for they do not need to sell these goods at once in order to continue the remittances of money [to Filipinas]. Thus, the former must necessarily lose, or at least not gain; and the latter must gain, or at least not lose.
“The second [injury to commerce]: although no more than the 300,000 pesos of the permission, in goods valued in the islands, can be shipped, experience has shown us that much larger amounts come thence; and the reason is, because the register contains the appraisements of the goods so exceedingly low that it is impossible, unless fraud intervene, that they could be purchased at first hand at those prices—but with the trick that all the reduction of price thus made on the goods is squeezed besides into the [amount of the] permission, and the real account comes separately to the owners. As a result, the greater part of the space on the ship is occupied by those agents, although with the pretense that they produce but small amounts; and all this springs from that original root of allowing citizenship, and the transportation of their silver, to persons who, without the intention of becoming settlers, continue there so long as it brings them profit. The fear of this abuse has led to an investigation at Acapulco, to learn whether the valuation of the stuffs is the actual value of them at Manila; and as the witnesses are necessarily from that city they frankly say that it is so, and enormous quantities of goods come thence under the pretext of the 300,000 pesos permitted.
“These considerations and the fulfilment of my obligation constrain me to inform your Majesty that although I have applied all my energy and watchfulness in order that what was decided by your Majesty should be put into practice, causing the royal decree of the year 1702 to be proclaimed in Mexico and Acapulco, and allowing two years of liberty in order that the transaction of this commerce with those islands may cease, the perversity and selfishness of the merchants is able to pervert the rule which is seen therein—in public giving out that they are conforming to the tenor of that decree, and in private and secret hiding under [their system of] confidence the prohibited transactions, which cause, besides the royal displeasure of your Majesty, serious injury to the commercial interests of Spain. For when there is abundance of the goods from Manila—which on account of their cheapness are more suitable for the common people—the value of those from Europe is impaired; and from this results the stoppage of the trading-fleets, the lack of purchasers, and the lowering of prices, because the people do not consider the European goods necessary for their supply [of clothing]. I know very well that in the islands a change is expected from regulating the commerce, as has been experienced this year, when the [Manila] ship came in ballast—the merchants perhaps fearing the threatened punishment of the confiscation of their goods (as I set forth to your Majesty in a separate report). From this will result the forced expenditure of the royal situado and the inefficiency of the royal exchequer; but as it is certain that those islands cannot maintain themselves with the situado alone, and that they need the traffic in their goods in order to obtain a balance of profits and to meet their obligations, they will have to continue in their shipments, conforming themselves to the [terms of the] permission, if they do not wish to experience the penalty of law in punishment for their frauds.
“This year of 1714 is the last one designated and determined by me for closing and finishing the mutual relations of both commercial bodies, taking into consideration, however, the capital belonging to Nueva España in the islands, and that the penalty ought not to be anticipated, considering the publicity of the prohibition; and, as nothing is coming this year, it will be necessary to abrogate it in the following one. All this I place before your Majesty, in order that in regard to what is contained therein you may be pleased to apply suitable measures.”
In view of this letter from Viceroy Linares, and of other documents, whose contents do not concern this writing, it was agreed by the Council (after having listened to the fiscal), by a decree of the second of March, 1715, that this collection of papers [Expediente] should be kept until the commissary of Philipinas (who, it was learned, was coming to the court) should arrive; and that in the meanwhile all the previous documents which the Council might possess in regard to this commerce should be collected together.