Note 5 — COMMERCE OF THE PHILIPPINES WITH NUEVA ESPAÑA

The phrase regulacion de derechos apparently means, in reality, a (special) rule for the payment of duties; that is, if the Manila merchants would pay the 100,000 pesos which they had offered as an “adjustment” according to the special rule for the collection of those duties—a rule going above the duties as prescribed by law—they should be permitted to do so, and should be excused for the penalties which had accumulated, or at least for the back dues remaining unpaid during the time when the “indult” bad been conceded to them of compounding the duties at 74,000 pesos only. The stress seems to be laid upon the fact that they must not be permitted to consider their payment as an “indult,” but us an arrangement, and one that was based on a somewhat higher rate than had previously been granted to them. Even though it may be considered as a sovereign favor to them, objection is made to having it specifically stated as an “indult.”

The usage of the word indulto in this connection will become more clear if it is remembered that it means a special favor in one form or another, a grace of the sovereign, a special exemption from rule or penalty. Barcia and others define indulto as an impost levied on the cargoes of the galleons from the Indias; but it seems doubtful if this be strictly correct, as no impost by that name can be found in Leyes de Indias or Ordenanzas de Bilbao, even in connection with averías and almojarifazgos. I take it to mean, rather, the exemption from the duties on ships’ cargoes which would, under other provisions of law, be owed. There is one interesting instance of the use of indulto to signify exemption, in Teatro de la legislación universal de España é Indias (Madrid, 1790–97; 28 vols.), ii, p. 341, under the head, “Administration of averías,” where it is provided by Carlos II that “the proceeds of certain indultos for gold, silver, and merchandise unregistered shall be applied to the fund from averías, in order that it may result to the benefit of those who shall not have transgressed the laws of registration; and notification shall first be given to the Council.” This seems to confirm my belief that the indulto was not properly a tax, but the favor of an exemption, in cases, from the tax; or of exemption (in this case, it would appear) from the penalty to fall upon him who had evaded the tax by concealment; it was, then, by derivation a composition of the tax. But the king here provided that it should not be paid into his coffers, but be applied to the fund from averías, thus swelling the fund from which all shippers benefited, and to which they were supposed to contribute to make the trade possible; see the chapter on “Averías,” in Leyes de Indias. The foregoing statements suggest a reason why the royal authority was opposed, in this Manila trade controversy, to having the composition of the duties, and of the penalties which the merchants had incurred by past violations of the rules, regarded or considered as an “indult,” and not as a “regulation” or rule specifying a lump sum to be paid as duties. This indult might (by this and other laws) have had to go into other funds; though I know of no fund for averías in the Manila trade, yet the Spanish mere desire for uniformity of legislation and practice might explain this strenuous objection to considering this regulation as an indult or grace of the sovereign (in the special sense that had been established for this sort of favor) in the galleon trade with the West Indies.—James A. LeRoy (now [1906] U.S. consul at Durango, Mexico). ↑