Note 32 — IV. Trade and Commerce: the Period of Restrictions

“By this system for two centuries the South American market for manufactures was reserved exclusively for Spain, but the protection did not prevent Spanish industry from decay and did retard the well-being and progress of South America. Between Mexico and the Philippines a limited trade was allowed, the profits of which were the perquisites of the Spaniards living in the Philippines and contributed to the religious endowments. But this monopoly was of no permanent advantage to the Spanish residents. It was too much like stock-jobbing, and sapped all spirit of industry. Zúñiga says that the commerce made a few rich in a short time and with little labor, but they were very few; that there were hardly five Spaniards in Manila worth $100,000, nor a hundred worth $40,000, the rest either lived on the King’s pay or in poverty. ‘Every morning one could see on the streets of Manila, in greatest poverty and asking alms, the sons of men who had made a fine show and left much money, which their sons had squandered because they had not been well trained in youth.’ The great possibilities of Manila as an entrepôt of the Asiatic trade were unrealized; for although the city enjoyed open trade with the Chinese, Japanese, and other orientals, it was denied to Europeans and the growth of that conducted by the Chinese and others was always obstructed by the lack of return cargoes owing to the limitations placed upon the trade with America and to the disinclination of the Filipinos to work to produce more than was enough to insure them a comfortable living and pay their tributes. That the system was detrimental to the economic progress of the islands was always obvious and its evils were repeatedly demonstrated by Spanish officials. Further it was not only detrimental to the prosperity of the islands but it obstructed the development of Mexico.” (Historical Introduction, by Edward Gaylord Bourne.—Bl. and Rb., Vol. 1, pp. 67–68.)