19. In carrying the iron from these islands and the quicksilver from Peru to Acapulco or to La Navidad, these effects can be transported in small vessels, and with little expense, to the coast of Guadalajara; they will cost less than if purchased in Mexico; at least thirty or forty pesos will be saved on the transportation of every arroba; and, if on the return trip by the same route the silver is embarked for Acapulco, there will be a great saving of freight in the transportation of this metal.
20. Let a computation be made of the money which must have gone out from the islands since their conquest, in order to purchase the very products in which they abound, and the amount will be incalculable for the items of cinnamon, iron, saltpetre, and other products. Let also computation be made of what the outlays must have been for purchasing wines, mirrors, and the other things which, as I have stated above, could be brought directly from España; and it will be seen that by our own fault we have enriched our enemies, and that we could have annihilated their commerce and increased our own with only the sources of gain which are pointed out in the present exposition. Then let us, even though it be late, have the discernment to avert our total ruin, by striving, with glorious emulation, to secure the greatest prosperity for the Spanish nation.
Chapter Fourth: Of the necessity for forming a company in these islands
1. By a royal decree dated at Sevilla on March 23, 1733 (in which the project was carried out which was approved by his Majesty on April 26, 1732), there was established by our lord Don Phelipe Fifth, of undying memory, a company with the name of “Royal Company of Philipinas,”[35] under fifty-eight articles and stipulations. These were full of the most unusual privileges and liberties that can be granted, and were even more advantageous to the Spaniards than those which Louis Fourteenth granted to the French for their Oriental Company; but I do not know exactly for what reason—some attribute it to the loss of Torres’s trading-fleet—the paternal affection did not prove effectual with which our beloved king and sovereign took an interest in making the Spanish monarchy prosperous by the extension and promotion of commerce (the only means for securing wealth), imitating the examples of almost all the nations of Europa, who, in order to become rich, have established their companies in the Orient.
2–12. [In these sections Viana expands this last statement, enumerating the nations who have enriched themselves by the Oriental trade, and the companies formed in each for this purpose. First were the Genovese and Venetians, who traded with India by way of the Red Sea; they were afterward driven out of this trade by the Portuguese, in consequence of the discovery by the latter of the route via Cape of Good Hope. (Section 3.) “Portuguese trading-fleets of thirty ships came to the commerce of India every year, and for Brasil alone sailed fifteen to twenty ships laden with merchandise from India—besides others which carried on trade in China, Japon, Persia, Arabía, Mosambique, Melinda, Sofala, and other regions. But now that commerce is so reduced that only one or, at most, two ships sail from Lisboa yearly, which would not be the case if they had established a company with adequate capital, which is the only way of making commerce lasting.” The Dutch at first bought spices from the Portuguese, and then resold them at a huge profit to the other European nations; but Phelipe II prohibited the spice trade to Portugal, and the Dutch therefore formed a company to operate in the Orient, and trade directly with its peoples. As finally constituted in 1602, this company had (section 6) a capital of 6,600,000 florins (“according to Savary”); and “in less than four years the members received the principal of their shares with the great profits which they obtained.” At the time of Viana’s writing, the Dutch company were maintaining “twelve thousand men, regular troops, in their twenty-five fortresses in India, and were able to equip 30,000 militia in their colonies, especially that of Batavia” (Savary). Viana cites another authority, Samuel Ricard, who places this militia force at 100,000, and states that the company employed in the Eastern trade more than 160 ships, each carrying thirty to sixty cannon, besides forty ships of the line (which number was increased in time of war). This enterprise ruined the commerce of the Portuguese (who had been the first to open the sea-route to India); “from that time until now it has steadily diminished, and is the poorest in all India; this has been the result of their not having formed a company with capital, and with respectable forces to oppose the conquests which the Dutch made. For they had a better opportunity than the latter, and it would have cost them less to maintain a flourishing commerce, as was that which they already possessed, than it cost the Dutch to establish a new commerce by dint of money, conquests, fortifications, and enormous expenses.” The English company (section 8) sent out its first fleet (of four ships) in the year 1600; its capital was 369,891 pounds sterling. After various fluctuations of fortune, it was reëstablished in 1698, and attained great prosperity, so that its capital had increased to 1,703,422 pounds. In Viana’s time, “the ships from Madrast for London (more than fifty in number) carry annual cargoes of five to six million pounds, according to the estimate of Sabary; and, taking into consideration the increase which this commerce has had since he published his famous work, the ‘Universal Dictionary,’ it must by this time be worth some ten millions. This does not include the operations of the private English traders who traffic among the colonies of India; this may be inferred from the duties which they pay in Madrast, which, at the rate of five per cent, produce for the company 80,000 pagodas. This sum amounts to 120,000 or 130,000 pesos, estimating the pagoda at twelve and sometimes thirteen silver reals.” The English company were maintaining in constant operation 150 ships and fragatas, and more than fifty smaller vessels, employed in their commerce between India and London alone; to the great expenses of this navy must be added those of the company’s forts and garrisons in India, which indicate how enormous were their profits. An Englishman told Viana that the king of England was owing to the company more than 36,000,000 pesos, the amount of loans which they had made to the crown in various emergencies. The Oriental commerce of the Dutch was further encroached upon (section 11) by the trading companies formed later in France, Sweden, and Denmark, and proposed in Prussia;[36] these were protected and fostered by their respective governments. The commerce of the Dutch “would have been ruined if it were not for their being exclusive owners of the spice trade—of which only the Spaniards are able to deprive them, since we have in these islands cinnamon, pepper, cloves, and nutmeg.” As all those nations maintained forts, garrisons, and war-ships, the necessity of opposing these armaments with like forces has imposed on the Dutch enormous additional expenses. Viana says (section 12): “I know not what reason there can be why that which is so beneficial to all the powers should not, with even greater cause, be an advantage to España, which holds her conquests in peaceable possession, and has valuable products in her dominions; moreover, she has forts and ports which at little cost can be rendered impregnable, and better opportunities than any other nation for a very flourishing commerce. Yet she labors only to enrich her enemies, abandoning to them the commerce which our people are unwilling to carry on, and surrendering to them our treasures and wealth, in exchange for the greater part of the commodities and products which our own lands produce.”]
13. If the Spaniards would form a company in the islands, similar to the foreign companies, and according to the pious anxiety with which the magnanimous heart of our beloved king and sovereign Don Phelipe Fifth, of undying memory, was concerned in this matter, all the nations who trade in India would have the same experience as the Portuguese and Dutch. Our commerce would annihilate or [at least] diminish that of all the India companies, who cannot find a market for their goods if they do not trade these in our dominions—and this they could not do if the Spanish company had large capital, and ships for navigation and trade in España and the Americas. If we could fortify the towns and garrison them, as has already been explained, the other nations would find themselves under the necessity of spending much more than they now do, in order to defend themselves against our power, if war should break out. This increase of expenses on the one hand, and diminution of their commerce on the other, are two excellent principles, which promise many advantages to the Spanish company—which, as it is not, like the others, compelled to incur these expenses, will be able to sell its commodities at lower prices, and the gains will be more certain.
14. In order to facilitate the establishment of this most beneficial company, the royal protection of our sovereign is absolutely necessary, and with it must be banished the contemptuous notion that the Spaniards form of the commercial career; for that notion usually leads them to keep their chests full of silver, for which they sell the products of their family estates. As a rule, the Spaniards spend with great economy what is necessary for their maintenance, especially those in the little hamlets throughout the kingdom; and, as they enjoy no commerce, they deprive themselves of the benefits arising from commercial activities, with detriment to their families and to the public welfare. On the other hand, they imagine that there is too great a risk in the remittance of their silver by sea, because they are so little (or not at all) acquainted with nautical science and mercantile affairs; and, as timidity prevails in their minds over ambition, they consider themselves fortunate to keep their riches under their own eyes, without thinking of investing them. But they would take hazards on their money, if they were touched by that eager desire for gain which is inseparable from all commerce, and which is stimulated by the lure of profits.
15. There are, of course, many persons whose ability enables them to understand thoroughly the benefits of commerce; but they live remote from the marine ports, they have not trustworthy acquaintances to whom they can confide the management of their capital, and they sorrowfully deprive themselves of the benefits which they would derive from its employment, the result of which is that they lead idle lives, or sometimes yield to an extravagance which is excessive and impairs their fortunes. Even more melancholy than all that I have related is the sight of the Spanish nobility, without any occupation, and, as a rule, reared in extreme ignorance and idleness. This is the source of many excesses, the beginning of ruin to the most robust constitutions, a hindrance to the generation of children, and a cause of the lessening of population which is continually growing more worthy of consideration.
16. Let there be formed, then, an Oriental company, and let the nobles of the kingdom contribute its funds; the profits [on these] will awaken in them a liking for commerce, and they will become acquainted with this most useful branch of knowledge. They will maintain their [business] relations, they will have some occupation, and will not use up their fortunes with vicious habits; their children will be brought up with a liking for commerce, and the fathers will have the satisfaction of employing some of their sons in appointments under the same company. This is the most certain means for securing the happiness of families and the prosperity of the entire monarchy; for, if commerce and the naval service (which follows the other closely) are promoted, there will be no vagabonds or idlers. Rather, idleness will come to an end, and with it many vices, on account of the enormous number of men whom a company with large capital needs to employ by land and sea—not only for its business positions, but for manufactures and navigation, in which persons from all spheres of life find an opening.
17. What a number of people must be employed by the English and Dutch companies in the more than one hundred and fifty ships which each company maintains for its commerce, and in the various colonies in which they have established that commerce! And what advantages result to these two powers from keeping so many people busy, maintaining them at the company’s expense, and freeing them from the idleness in which they would [otherwise] live! If those countries had not so great a commerce, vagabonds and idlers would abound in them; but this class of people is not seen there. On the contrary, there is great application to all the arts and sciences; for all have employment, and all are useful—some in manufactures, others in the military or the naval service, and others in commerce, etc.