Philippine Mining in the 19th century

Local markets

Besides the traffic founded on ordinary consumption, the necessity of obtaining assortments of home-manufactured as well as imported goods, in order to supply the markets, known by the name of tianguis, and which are held weekly in almost every town, there is another species of speculation, peculiar to the rich natives and Sangley mestizos, an industrious race, and also possessed of the largest portion of the specie.

This consists in the anticipated purchase of the crops of indigo, sugar, rice, etc., with a view to [379]fix their own prices on the produce thus contracted for, when resold to the second hand.

A propensity to barter and traffic, in all kinds of ways, is indeed universal among the natives, and as the principal springs which urge on internal circulation are already in motion, nothing more is wanting than at once to destroy the obstacles previously pointed out, and encourage the extension of luxury and comforts, in order that, by the number of the people’s wants being increased, as well as the means of supplying them, the force and velocity of action may in the same proportion be augmented.

External commerce

Under “External Commerce” generally are comprised the relations the Philippine Islands keep up with other nations, with the Spanish possessions in America, and with the mother country; or, in other words, the sum total of their imports and exports.

Outside deterrents.Many are the causes which, within the last ten or twelve years, have influenced the mercantile relations of these Islands, and prevented their organization on permanent and known principles.

The chief one, no doubt, has been the frequent and unforeseen changes, from peace to war, which have marked that unhappy period, and as under similar circumstances merchants, more than any other class of persons, are in the habit of acting on extremes, there have been occasions in which, misled by the exaggerated idea of the galleon of Acapulco, and anxious to avail themselves of the first prices, generally also the highest, foreign speculators have inundated Manila with goods, by a competition from all quarters; and others, owing to the channels being obstructed, when this market has experienced an absolute scarcity of commodities, as well as of funds necessary to continue the usual and almost only branch of commerce left.

The frequent failure of the sugar and indigo crops, has also in many instances restrained the North Americans and other neutrals from coming to these Islands with cargoes, and induced them to prefer Java, where they are at all times sure of finding returns. Besides the influence of these extraordinary causes on the uncertainty and irregularity of external commerce, no small share must also be attributed to the strangeness of the peculiar constitution of the country, or the principles on which its trade is established.

Domestic discouragements.

Scarcely will it be believed, in the greater part of civilized Europe, that a Spanish colony exists between Asia and America, whose merchants are forbidden to avail themselves of their advantageous situation, and that, as a special favor only are they allowed to send their effects to Mexico, once a year, but under the following restrictions.

It is a necessary condition, that every shipper shall [380]be a member of the Board of Trade (Consulado), and therein entitled to a vote, which supposes a residence of some years in the country, besides the possession of property of his own to the amount of $8,000. He is compelled to join with the other members, in order to be enabled to ship his goods in bales of a determined form and dimensions, in one single vessel, arranged, fitted out, and commanded by officers of the royal navy, under the character of a war ship. He has also to contribute his proportion of $20,000, which, in the shape of a present, are given to the commander, at the end of every round voyage. He cannot in any way interfere in the choice or qualities of the vessel, notwithstanding his property is to be risked in her; and what completes the extravagance of the system, is, that before anything is done he must pay down 25 or 40% for freight, according to circumstances, which money is distributed among certain canons of the church, aldermen, subalterns of the army, and widows of Spaniards, to whom a given number of tickets or certified permits to ship are granted, either as a compensation for the smallness of their pay, or in the way of a privilege; but on express conditions that, although they themselves are not members of the Board of Trade, they shall not be allowed to negotiate and transfer them to persons not having that quality.

In the custom house nothing being admitted unless the number of bales shipped are accompanied by corresponding permits, and as it besides frequently happens that there is a degree of competition between the parties seeking to try their fortune in this way, the original holders of the permits very often hang back, in such a manner that I have seen $500 offered for the transfer of a right to ship three bales, which scarcely contained goods to the amount of $1,000. Such, nevertheless, is the truth, and such the exact description of the famous Acapulco ship, which has excited so much jealousy among the merchants of Seville and Cadiz, and given rise to such an infinite number of disputes and lawsuits.

Business irregularities

So complete a deviation from the rules and maxims usually received in trade, could not fail to produce in the Philippine Islands, as in fact it has, effects equally extraordinary with regard to those who follow this pursuit. The merchant of Manila is, in fact, entirely different from the one in Cadiz or Amsterdam. Without any correspondents in the manufacturing countries and consequently possessed of no suitable advices of the favorable variations in the respective markets, without brokers and even without regular books he seems to carry on his profession on no one fixed principle, and to [381]have acquired his routine of business from mere habit and vague custom.

His contracts are made out on stamped paper, and his bills or promissory notes no other than long and diffuse writings or bonds, of which the dates and amounts are kept more in the shape of bundles than by any due entry on his books; and what at once gives the most clear idea of this irregularity is the singular fact that, for the space of twenty-five and possibly fifty years, only one bankrupt has presented the state of his affairs to the Board of Trade, in conformity to the regulations prescribed by the general Statutes of Bankruptcy, whereas, numbers of cases have occurred in which these merchants have wasted or secreted the property of others with impunity. Hence have arisen those irregularities, subterfuges and disputes, in a word, the absence of all mercantile business carried on in a scrupulously punctual and correct manner. Hence, also, have followed that distrust and embarrassment with which commercial operations are attended, as well as the difficulty of calculating their fluctuations.

On the other hand, as in order to send off an expedition by the annual ship to Acapulco, the previous consent of the majority of the incorporated merchants is necessary, before this point is decided, months are passed in intrigues and disputes, the peremptory period arrives, and if the articles wanted are in the market, they are purchased up with precipitation and paid for with the monies the shippers have been able to obtain at an interest from the administrators of pious and charitable funds. In this manner, compelled to act almost always without plan or concert, yet accustomed to gain in the market of Acapulco, notwithstanding so many impediments and the exorbitant premiums paid for the money lent, these merchants follow the strange maxim of risking little or no property of their own; and unaware, or rather, disregarding the importance of economy in the expenses and regularity of their general method of living, it is not possible they can ever accumulate large fortunes, or form solid and well-accredited houses.

Merchants discouraged.

Thus oppressed by a system, as unjust as it is absurd, and conducting their affairs in the way above described, it is not strange that these gentlemen, at the same time yielding to the indolence consequent on the climate, should neglect or behold with indifference all the other secondary resources which the supplying the wants of the country and the extensive scope and variety of its produce offer to the man of active mind. Hence it follows, as already observed, that the whole of the interior trade is at present absorbed by the principal natives, the Sangley mestizos of both sexes, and a few Chinese peddlers.

The outlook brightening.Notwithstanding, however, the defective manner in which the generality of the merchants act, some already are beginning to distinguish themselves by the prudence of their conduct, by forwarding, in time, their orders to the manufacturers of India and China, and, in other respects guiding themselves by the principles which characterize the intelligent merchant.

Finally, it is to be presumed that, as soon as the government shall have thrown down this singular and preposterous system that has been the cause of so many disorders, and proclaimed the unlimited freedom of Philippine commerce, the greater part of these people will rise up from the state of inaction in which they now live, and the relations of the colony will then assume the course and extent corresponding to its advantages of position. At least, if our national merchants should not act up to the impulse given to all kinds of mercantile enterprises by the beneficial hand of the sovereign, foreigners will not be wanting, who, relying on due toleration, will be induced to convey their fortunes and families to the Philippine Islands, and, vigorously encouraging the exportation of their valuable productions, amply secure the fruits of their laudable activity and well-combined speculations.

Capital employed in commerce.

Were a person, judging from the numbers constituting the body of registered merchants, and supposing all of them to possess the essential requisites prescribed by our commercial regulations, to form a prudent estimate of the amount of capital employed by them, his calculations would turn out extremely erroneous, for besides the case with which regulations of this kind are eluded, many are merely nominal traders, and there are others whose mercantile existence is purely artificial for they are sustained in a temporary manner, by means of a forced species of circulation peculiar to this country.

This consists in obtaining the acquiescence of the administrators of pious and charitable funds, let out at interest, to renew the bonds they hold during other successive risks, waiting, as it were, till some fatal tempest has swallowed up the vessel in which these merchants suppose their property to be embarked, and at once cancel all their obligations. On the other hand, neither excessive expenses nor the shipment of large quantities of goods to Acapulco can in any way be taken as a just criterion whereby to judge of the fortunes of individuals; because, in the first, there is great uniformity, every one, more or less, enjoying, exteriorly, the same easy circumstances, notwithstanding the disparity of real property; and in the second, considerable fiction prevails, many persons shipping under the same mark, and even when the shipper stands alone, he might have been provided with the necessary funds from the pious and charitable establishments, possibly without risking a dollar of his own in the whole operation.

Under circumstances so dubious, far from presuming to give a decided opinion on the subject, I am compelled to judge from mere conjectures, and guided only by the knowledge and experience I have been able to acquire during my long residence there. In conformity thereto, I am inclined to believe, that the total amount of capital belonging to and employed in the trade of the Philippine Islands, does not at present exceed two and a half million dollars, with evident signs of rapid decline, if the merchants do not in time abandon the ruinous systems of chiefly carrying on their speculations with money obtained at interest.

Large sums hoarded.

The 2.5 million dollars thus attributed to the merchants, form, however, the smaller part of the funds distributed among the other classes, and the total amount of the circulating medium of the colony might be considered an object sufficiently worthy of being ascertained, owing to the great light it would throw on the present state of the inhabitants; but it is in vain to attempt any calculation of the kind, at least without the aid of data possessing a certain degree of accuracy.

The only thing that can be affirmed is, that during the period of over 250 years since the conquest, the ingress of specie into the Philippine Islands has been constant.

Their annual ships have seldom come from New Spain without bringing considerable sums in return, and if some of them have been lost, many others, without being confined to the 1 million of dollars constituting the ordinary amount of the permit, have not unfrequently come back with triple that sum; for which reason there are ample grounds of judging the estimates correct, which fix the total importation of dollars, during the whole of that long period of years, to be equal to 400 million.

The Chinese mestizo economy and avarice compete with intelligence and activity in accumulating wealth and as they are scattered, among the principal islands, and in possession of the best lands and the most lucrative business of the interior, there are ample motives for presuming that these industrious and sagacious people have gradually, although incessantly, amassed immense sums in specie; but it would be impossible to point out their amount, distribution, or the secret places in which they are hoarded.

Pious and charitable funds’ capital.

The assemblage of pious legacies, temporalities, and other funds and property placed under the care of several administrative committees, for purposes as well religious as charitable, constitute the [384]chief capital employed in external trade; and notwithstanding the failures, which from time to time occur, the subsequent accumulation of the enormous premiums obtained for funds laid out in maritime speculations, both in time of peace and war, not only suffices to make up all losses of the above kind, but also to secure the punctual payment of such charitable pensions and other charges as are to be deducted from the respective profits of this species of stock, its total amount, according to an official report made by order of the head committee of the sinking fund, including temporalities, and Queen Maria of Austria’s endowment for the College of Las Marianas, together with other funds of the same kind, not comprehended in the decree of abolition, at the commencement of the year 1809, amounted to $2,470,390, and as the sea-risks of that and the following year were successful, and the outstanding amounts punctually recovered, the aggregate sum, arising out of the above description of property, may now be estimated at more than three millions. Of these funds three distributions are generally made, viz., one part is appropriated to the China risks, at from twelve to eighteen per cent. premium, according to circumstances, and also those to Madras, Calcutta and Batavia, at from sixteen to twenty-two per cent. The second, which generally is in the largest proportion, is employed in risks to Acapulco, at various premiums, from 27 to 45 per cent.; and the third is left in hand, as a kind of guarantee of the stability of the original endowments.

Coveted by Spanish treasury

In the great exigencies of the Royal Treasury, experienced during the last years of the administration of Sr. Soler, the royal decree of Consolidación was extended to the Philippine Islands, under the pretext of guarding the funds belonging to public charities and religious endowments … sea-risks, the income of which, when secured on good mortgages, does not generally exceed five per cent, many in Spain not yielding above four; but the remarkable difference between this plan and the one above described, together with various and other weighty reasons alleged by the administrators, caused the dreaded effect of this new regulation to be suspended, and whilst the head committee of Manila were consulting their doubts and requesting fresh instructions from the court at home, orders came out not to make any alteration in measures relating to this description of property.

Easy capital but lessened profits

Accustomed, in their limited calculations, to identify the resources, offered by the funds belonging to this class of establishments, with the very existence of the colony, the needy merchants [385]easily confound their personal with the general interest;

Few stop to consider that the identical means of carrying on trade, without any capital of their own, although they have accidentally enriched a small number of persons, eventually have absorbed the principal profits, and possibly been the chief cause of the unflourishing state of the colony at large. Without fearing the charge of rashness, it may, in fact, be asserted, that if these charities and pious endowments had never existed, public prosperity in the Philippine Islands would, as in other parts, have been the immediate effect of the united efforts of the individual members of the community and of the experience acquired in the constant prosecution of the same object.

As, however, a progress of this kind, although certain, must necessarily have been at first extremely slow, and as, on the other hand, the preference given to mercantile operations undertaken with the funds belonging to public charities, has its origin in the assemblage of vices so remarkable in the very organization of the body of Philippine merchants, any new measure on this subject might be deemed inconsistent, that at once deprived them of the use of resources on which they had been accustomed to rely, without removing those other defects which excuse, if not encourage, the continuation of the present system.

Without, therefore, appealing to violent remedies, it is to be hoped that, in order to render plans of reform effectual, it will be sufficient, under more propitious circumstances, to see property brought from other countries to these Islands, as well as persons coming to settle in them, capable of managing it with that intelligence and economy required by trade.

The competition of those who speculate at random would then cease, or what is the same, as money obtained at a premium could not then be laid out with the same advantages by the merchants as if it was their own, it will be necessary to renounce the fallacious profits held out by the public charities, till at least they are placed on a level with existing circumstances, and brought in to be of real service to the honorable planter and laborious merchant, in their accidental exigencies, ceasing to be, as hitherto, the indirect cause of idleness, dissipation, and the ruin of an infinite number of families.

Mercantile shipping

The vessels which the district magistrates of the provinces employ in carrying on their trade with the capital and those belonging to some of the richer merchants, together with such as are owned by the natives and mestizos, on an approximate calculation, amount to twelve thousand tons, including ships, brigs, schooners, galleys, barges, etc.

For the want of better data, this estimate is founded only on reasonable conjecture, aided by the advice of experienced [386]persons, for although the greatest part of these vessels are built by the natives in the neighborhood of their own towns, no register is kept of their number and dimensions, nor do they carry with them the usual certificates.

Those belonging to the merchants, that is, ships and brigs of a certain size, have already begun to frequent the ports of China, Java, the coast of Coromandel, Bengal, and the Isle of France, availing themselves of the lucrative freights which formerly enriched and encouraged foreign shipping.

The other class of vessels are perfectly adequate to the coasting trade. But they cannot be applied to larger enterprises because of their weakness and small capacity.

The seamen are not apprenticed, or “matriculated”. The following trains up many dexterous and able mariners:

• their frequent crossing from island to island
• their familiarity with regional tempests
• voyages to various parts of America
• the occupation of fishing

These are always available, without any compulsion, to complete the crews.

Need of nautical school

Sensibly felt are:

• the lack of a public school for the teaching of navigation
• the great inconvenience from the scarcity of persons capable of being trusted with the command of vessels
• the ignorance of the waters of this dangerous Archipelago.

Repeated royal orders have been sent over for the board of trade to proceed to the institution of so useful an establishment.

In the meantime, a medium has been resorted to in order to supply the deficiency, by allowing the free admission of foreign mates, provided they exhibit proofs of their acquaintance with navigation, and profess the Catholic worship.

Shipowners nevertheless experience great difficulties, particularly at times when the Acapulco ship is fitting out.

She is considered as a vessel of war, and commanded by officers of the royal navy. But the plan of her equipment is so singular, that in addition, she requires the extra aid of one chief mate, and three under ones.