The Galleon Trade

The Manila custom-house requires many formalities which the native minor officials exercised without discretion. This is:

• different from the easy routine of the English free ports in Asia which I had just came from
• wearisome to me.

A respectable merchant obtained for me a guarantee, as a particular favour, to have permission to disembark after a detention of 16 hours.

But even then, I was not allowed to take the smallest article of luggage on shore with me. During the south-west monsoon and the stormy season that accompanies the change of monsoons, the roadstead is unsafe.

Vessels are then obliged to shelter in the port of Cavite, 7 miles away.

• But during the north-east monsoons they can safely anchor half a league from the coast.

All ships under 300 tons burden pass the breakwater and enter the Pasig. The few ships in the roadstead, particularly of those of foreign countries, was the more remarkable, as Manila was the only port in the Philippines that had any commerce with foreign countries.

Since 1855, foreign trade could be done at 4 ports.

• But at during my arrival in March 1859, none of them had accepted a foreign ship.
• It was a few weeks after my visit that the first English ship sailed into Iloilo to take in a cargo of sugar for Australia.

In 1868, 112 foreign vessels entered the port of Manila:

• The foreign shipes totaled 74,054 tons. Nearly all entered empty, but left with cargoes
• The Spanish ships totaled 26,762 tons. These came and left with cargo.

The opening of Iloilo was so advantageous, as explained in Chapter .

This is because of:

• the feeble development of agriculture, despite the unexampled soil fertility
• chiefly the antiquated and artificially limited conditions of trade.

FORMER CUSTOMS DUTIES

The customs duties were not very high at:

• 7% on merchandise carried by Spanish ships
• about twice for foreign ships.

Spanish products have a duty of:

• 3% if carried in Spanish ships
• ? if in foreign ships. These were only allowed to enter the port empty.

The main Philippine imports were from England which entered in 2 ways:

1. These were kept back until they could be sent in Spanish ships which charged nearly a triple freight (from £4 to £5 instead of from £1 to £2 per ton). These ships went to British ports rarely.

2. The goods were sent to Singapore and Hongkong where they were reshipped under the Spanish flag.

Tonnage dues were levied on:

• empty ships
• ships that touched at Manila without unloading or taking in fresh cargo

If a ship landed even the smallest parcel, it was no longer rated as an empty ship, but charged on the higher scale.

Vessels were therefore forced to enter the port either:

• entirely empty or
• carrying sufficient to cover the expense of the increased harbour dues
  • This is almost impossibile for foreign ships because of the differential customs rates, which acted almost as a complete prohibition.

This made ships enter empty.

Philippine exports were almost entirely limited to its raw produce, burdened with an export duty of 3%.

Exports leaving under the Spanish flag were only taxed at 1%. But there was scarcely any export trade with Spain, and as Spanish vessels, from their high rates of freight, were excluded from the carrying trade of the world, the boon to commerce was a delusive one.*

These eccentric excise laws, hampered with a hundred suspicious forms, frightened away the whole carrying trade from Manila. Its commission merchants were frequently unable to dispose of the local produce.

So trifling was the carrying trade that the total yearly average of the harbour dues, calculated from the returns of 10 years, barely reached 10,000 dollars.

The position of Manila, a central point between Japan, China, Annam, the English and Dutch ports of the Archipelago and Australia, is in itself extremely favourable to world trade.*

At the time of the north-eastern monsoons, during our winter, when vessels for the sake of a fair wind pass through the Straits of Gilolo on their way from the Indian Archipelago to China, they are obliged to pass close to Manila. They would find it a most convenient station, for the Philippines, as we have already mentioned, are particularly favourably placed for the west coast of America.

† Lapérouse said that Manila was perhaps the most fortunately situated city in the world.

An important decree was issued on April 5, 1869 which:

• reduced the differential duties and removed them after 2 years
• abrogated all export duties
• consolidated the more annoying port dues into one single charge

It:

• would have appeared sooner had not the Spanish and colonial shipowners, spoilt by the protective system, opposed anything which touched their privileges
• proves that the colonial ministry was aware of these circumstances

When the Spaniards landed at the Philippines they found the inhabitants clad in silks and cotton stuffs, which were imported from China in exchange for:

• gold-dust
• sapan wood*
• holothurian
• edible birds’ nests
• skins.

The Philippines was also in communication with Japan, Cambodia, Siam, the Moluccas, and the Malay Archipelago. De Barros mentions that vessels from Luzon visited Malacca in 1511.3

• Sapan or sibucao, Cæsalpinia Sapan. Pernambuco or Brazil wood, to which the empire of Brazil owes its name, comes from the Casalpinia echinata and the Cæsalpinia Braziliensis. (The oldest maps of America remark of Brazil: “

Its only useful product is Brazil (wood).")

The sapan of the Philippines is richer in dye stuff than all other eastern woods, but it ranks below the Brazilian sapan. It has nowadays lost its reputation, owing to its being often stupidly cut down too early.

It is sent especially to China, where it is used for dyeing or printing in red. The stuff is first macerated with alum, and then for a finish dipped in a weak alcoholic solution of alkali. The reddish brown tint so frequently met with in the clothes of the poorer Chinese is produced from sapan.

• An interesting catalogue of the Chinese imports is given in the Appendix.

I Large quantities of small mussel shells (Cypræa moneta) were sent at this period to Siam, where they are still used as money.

Berghaus’ “Geo.-hydrogr. Memoir.”

Manila’s Commerce

The Spanish created order in the Philippines. They opened commerce with America and indirectly with Europe. These greatly increased the island trade and extended it to the Persian Gulf.

Manila was the great mart for the products of the East which loaded the galleons sailing from New Spain (at first to Navidad, after 1602 to Acapulco) as early as 1565, bringing back silver.*

The merchants in New Spain and Peru found this commerce so advantageous. It damaged the manufactured exports from Spain which were unable to compete with the Indian cottons and the Chinese silks.

The spoilt monopolists of Seville demanded therefore the abandonment of a colony which required considerable yearly contributions from the home exchequer, which stood in the way of the mother country’s gains in her American settlements, and which forced his Catholic Majesty’s silver to remain in the hands of the heathen.

Since the foundation of the colony they had continually thrown impediments in its path.

Their demands, however, were vain in face of the ambition of the throne and the influence of the clergy; but the public opinion of the time forced the Government to forbid the Peruvian and New Spanish merchants, in the interests of the mother country, to obtain merchandise from China, either directly, or through Manila.

The Filipinos were alone permitted to send Chinese goods to America, but only to the yearly value of $250,000. The return trade was limited to $500,000.*

Manila was first founded in 1571. But as early as 1565, Urdaneta, Legaspi’s pilot, had found the route back through the Pacific Ocean while he was seeking a favourable north-west wind in the higher northern latitudes.

Urdaneta was not the first to use of the return passage.

Legaspi had 5 ships.

• One was commanded by Don Alonso de Arellano, which had on board as pilot named Lope Martin, a mulatto.
• It separated itself from the fleet after they had reached the Philippines.
• It returned to New Spain on a northern course, in order to claim the promised reward for the discovery.

Don Alonso was appointed, however, by the speedy return of Urdaneta.

• Kottenkamp I., 1594.

The first amount was afterwards increased to $300,000 with a proportionate augmentation of the return freight. But the Spanish were:

• forbidden to visit China
• obliged to await the arrival of the junks.

Finally, in 1720, Chinese goods were entirely prohibited in all Spanish colonies.

A decree of 1754 (amplified in 1769) reopened trade with China.

• It increased the maximum value of the annual freightage to Acapulco to 500,000 silver dollars
• The freight from Acapulco to Manila was 1,000,000 silver dollars

Finally, the regular voyages to Acapulco was ended.

• The last galleon left Manila in 1811
• The last departure from Acapulco was in 1815.

The Philippine commerce with America was done through merchant ships. These ships were permitted in 1820 to:

• export from the Philippines to the annual value of $750,000
• trade with Acapulco, San Blas, Guyaquil, and Callao.

This concession, however, was not enough to compensate Philippine commerce for the losses of the separation of Mexico from Spain.

The English took Manila in 1762.

• This made its natives acquainted with many industrial products which the imports from China and India were unable to offer them.

To satisfy these new cravings, Spanish galleons were sent to the Philippines towards the end of 1764. These carried articles of home manufacture, such as wine, provisions, hats, cloth, hardware, and ornamental objects.