commerce, and for the same reason the profits of it [have declined] to so great a degree that scarcely can one now buy one pico of silk for the price that he formerly paid for two and one-half picos. This has been the reason why, since the merchandise of the Chinese was lacking to the inhabitants for their investments, they have had to buy the goods from the Portuguese of Macan, at prices so high and excessive that they make no considerable profit in Nueva España. Consequently, the profits that the inhabitants of Manila formerly had have come to be made by the said Portuguese of Macan. Thus the reason and motive for the said royal decree has entirely and surely disappeared; and this same fact ought to do away with its ruling.
The second reason also is founded on the expense and cost that had to be incurred for the security and defense of the trading ships from the said islands to Nueva España, with the fifty soldiers, military captain, and other officers; that the said ships had to be of a certain tonnage; and that for this reason of the said expenses and costs, the said decree ordered the imposition of the said two per cent in order that it should be unnecessary to have recourse to the royal treasury. It ordered the proceeds therefrom to be deposited in a separate fund and account, for the said expenses which had to be incurred with the said ships and their crews. That reason likewise has had no effect, for the said expenses have not been made, nor are they made; nor do the said military captain, soldiers, or other officers sail in the said ships. Neither are the said ships—those that there are—of the said burden and tonnage, but smaller. Therefore the said expenses and costs cease, upon which the said decree is grounded; accordingly, that which is ruled and ordered by it ceases, for the reason stated, and, indeed, should cease.
Third, because by the former year of six hundred and eleven, the said governor, Don Juan de Silva, seeing the unsatisfactory method and arrangements existing for the collection of the said two per cent, tried to supply it—and did so—by the method that he thought least harmful, and of greater profit to the royal treasury—namely, to impose in its stead another duty of three per cent on the merchandise brought by the Chinese to sell in the said city of Manila. But, although the said imposition is ostensibly on the said Chinese, it comes, in fact, to be imposed on the inhabitants of Manila themselves; for the latter, being the purchasers, necessarily have to pay more, the Chinese sellers taking into consideration the new charge and imposition which has been levied on them. Consequently, the said two per cent has come to have actual effect and with greater profit by the said three per cent substituted in its place, which fact the said governor, Don Juan de Silva, had in mind. If the decree were again to be carried out, it would mean a double imposition for the above-mentioned damages and obstacles, and there would be no possibility of executing it.
Fourth, because the royal duties which the inhabitants pay on the said investments that they make, are very great; for on every thousand pesos of principal that they invest the duties in the said city and in Nueva España amount to two hundred and seventy pesos and more, while the cost and expense incidental to the said investments amount to two hundred and eighty pesos more. Consequently, the said royal duties alone for each one thousand pesos invested inevitably amount, as is well known, to five hundred and fifty pesos. Therefore, within four years, setting aside the said costs and expenses, the said inhabitants come to pay more than the said one thousand pesos of capital for the said royal duties. The same thing happens in the same proportion when larger sums are invested.
The fifth springs directly from the preceding reason; for since the said duties and said costs and expenses are so great, and the profits so slight and uncertain, as above stated, the said inhabitants cannot continue the said trade and commerce of Filipinas with Nueva España; for to do that would be a poor management and administration of their possessions, carrying them over seas at so many risks, and in danger of catastrophes such as generally happen, which are daily becoming greater; while there is no profit, or so little that, with the said two per cent, the profits will be of little or no consideration, for which they will not expose their goods and capital to so great a risk.
Sixth, because, if the said collection and enforcement of the said two per cent were to be insisted upon, it would be a foregone conclusion that the inhabitants would abandon the said trade and commerce, and would not make the said investments, for the reasons stated above. That has proved to be so on the occasions on which the said collection has been discussed with some warmth—and especially when the said visitor, Licentiate Don Francisco de Rojas, tried to effect it, when the said inhabitants were firm and were resolved not to appraise, register, or lade anything in the ships, which were all ready to sail to Nueva España. Thereupon the said visitor thought it advisable and necessary to repeal the said enforcement. Although the inhabitants, on that occasion, because of the great pressure exerted and the advantageous reasons put forward by the visitor, offered to aid with a gift of four thousand pesos, it was with the said condition that it was to be for only that one time, and with the said condition that nothing was to be said of the said collection.
Seventh, the great damage and injury that would assuredly follow to the royal treasury if the said commerce were abandoned; for since the said three per cent that is first collected as a customs duty, and the other three per cent imposed anew in the said year of six hundred and eleven, amount and are worth a very great sum and number of pesos annually to the royal treasury, that sum will not increase with the imposition of the said two per cent, but, on the contrary, both the one and the other duty will be lost; or at least they will be reduced to a very great loss, damage, and diminution of the royal treasury, and the reason therefor is very clear and evident. For in every year, and in that of the imposition of the two per cent of which we are treating, the duty amounted to about four thousand; and to that amount now, without the imposition of the said two per cent, all the inhabitants of the said city, both rich and poor, trade and traffic. By that means are caused the said customs duties not only at departure from the said city of Manila, but at entrance into the said City of Mexico, and on their returns afterward, from the investments, and on the kinds of merchandise that are sent back by the same ports and places to be traded at the said city of Manila. For since the number of those who traffic is large, the said duties which are caused and paid are also large. But if the said two per cent be put in force, although it may be stated that some of the said inhabitants will continue to trade, they would be very few; and the trade would be reduced to those who are richest and those with most capital, who are not many. But among all the others who are not rich, money and capital would fail, and they would refuse to [trade] and could not risk their little capital without gain or profit, as they will have no profit with the said two per cent. And it would not be right or expedient, for the sake of the said new imposition (since the reasons and motives for it are lacking, as above stated), to place the income and value of the said customs duties in danger and peril, as it is so great and considerable, or to risk that of the other three per cent of the said year 611—the one dependent on and inseparable from the other; for, beyond all doubt, both would fail if the said commerce failed or diminished. The said danger can be regarded as certain, both for the abandonment of the said commerce and of the colony of those islands; and that would allow the Dutch, who are so powerful in the surrounding islands, as above stated, to gain an entrance in them, for the lack of troops caused by the said imposition. That is a matter which your Majesty should have examined with great attention, because of the many precedents that have been seen in like cases in these kingdoms [i.e., of España] with the great injury and loss to the royal treasury which could not be restored later—as happened in the increase [of the tax] on playing cards, one real more than the usual tax being imposed. That income, being valued at that said time at from forty-four to forty-five million maravedis annually in the three districts of Castilla, Toledo, and Andalucia, dropped to twenty-two millions because of the new imposition, thereby losing a like sum annually. And, although the damage was afterward seen, and the attempt was made to correct it by repealing the said new imposition, and reducing the tax to the old amount, the amendment did not follow; for because of the frauds and cheats caused by the said income in its first condition, it never returned to that condition, and remained with the annual loss and decrease of fourteen million maravedis from what it had at the time of the said new imposition. The same thing happened in the thirty per cent which was imposed on the trade of foreign merchants while the court was in Valladolid. The result of that was that the foreign merchants abandoned the commerce, and looked for new methods, applying themselves
