Note 17 — COMMERCE OF THE PHILIPPINES WITH NUEVA ESPAÑA

237–241. [This memorial having been sent to the fiscal, he replied (November 10, 1735) that the proposal of Cadiz was not a fair one; for the purchase of 250,000 libras of cinnamon, and the costs of placing that amount in the Acapulco market, would amount, even at Cadiz’s own figures, to an investment of 277,008 pesos, and at Manila’s to 331,024 pesos, while Cadiz had assumed but 250,000 as the amount to be put into cinnamon by Manila. The result would be that Manila either would not transport all that quantity to Nueva España, or would lose part of the profit on its shipment. The profits at Acapulco are not sufficient, on either class of commodities proposed by Cadiz, to yield the amount which is permitted to Manila as returns on its shipments. The spices can never be an equivalent (as Cadiz would claim) for the Chinese silks; for a tonelada of cinnamon, which space is occupied with only 600 libras, is worth at Manila 600 pesos, and a tonelada of silk goods is worth 4,000 pesos, if not more. The amount of cinnamon proposed by Cadiz would occupy 416⅔ toneladas, and the ballast (on a galleon of 900 toneladas) 300 more; this would leave for the cotton stuffs, etc. (all of which are bulky goods) only 183⅓ toneladas, with which it would be impossible to complete the 250,000 pesos of investment allowed to Manila. But when they are allowed to carry Chinese silks, these are contained in 500 piezas, which occupy but 62½ toneladas, each tonelada worth 4,000 pesos; and there remain to the shippers 3,500 piezas for the cheaper and bulky goods. The fiscal declares that even if the spices were an equivalent in value for the silk trade, the proposed commerce in them would be injurious to all parties concerned. “The losses to the royal exchequer would consist in the less value of the duties which the 250,000 libras of cinnamon would contribute [to it] in España than in Acapulco. For in that port they would amount, as the fiscal has been informed, to 21,944 pesos; and in Cadiz the import duties alone for the millon and alcavala pay 34 pesos a quintal of 100 libras, and, with those of export for the Indias (which, according to plan, are 20 pesos a quintal), would amount to 160,000 pesos. To this sum ought to be added at least 50 per cent for the greater value of money in Cadiz, where his Majesty will receive it [for the duties] immediately, than in the Indias; and with all these the royal exchequer will be defrauded to the extent of 218,056 pesos.” The price of cinnamon will rise, when only the amount actually needed is sold; and this will be a burden on the general public. If the spice trade be limited to the Philippine merchants, there is nothing to hinder those of Mexico from “cornering” the market, and selling such quantities only as they please, at enormous prices; moreover, the failure of the annual shipment from Manila (which is possible in any year) would cause great scarcity of this product throughout the great kingdom of Nueva España, and this would be a serious injury to its citizens—“especially in an article [like this], for the lack of which there is no equivalent which can make it good; nor is its expenditure limited by the variety of uses [to which it can be put], or by the frequent inconstancy of fashions, like other merchandise, but depends on a certain and assured consumption.” This compulsory spice trade would injure Manila itself not only for the reasons already cited, but because it is possible that the Dutch would refuse to sell the cinnamon to the Philippine shippers; and then, with the Chinese silks cut off from them, they would find it impossible to continue their commerce with Nueva España. In any case, the Dutch would have it in their power to demand whatever price they might choose to place on their commodities; and the interruption of that traffic for two or three years would not hurt the Dutch, for they could sell it to European traders and be sure of their profits; but the injurious effects of such proceeding would react on the Manila merchants, the people of Nueva España, and the income of the Spanish treasury. If at any time cinnamon should bring in Nueva España the enormous prices which Cadiz has previously quoted, that would not help Manila, since its returns are limited to 1,000,000 pesos; the unusual profits would only benefit the Mexican traders who had bought the spice by wholesale at Acapulco. The assertion of Cadiz that the Manila merchants gain on the cinnamon 150 per cent at Acapulco does not count, for it entirely ignores the costs and expenses which, as has been demonstrated, reduce their net gain to 50 per cent. For all these reasons, the fiscal declines to approve the proposals of Cadiz. In view of this reply, the Council agreed (November 16) to call for a summary view of the whole question, with all the documents concerned. At this point, information was received from Cadiz that the fleet which had just arrived had brought a sack of cinnamon as a specimen of that which was produced in the Philippine Islands, and that the quality of this surpassed that of the cinnamon brought from the Dutch colonies. On January 21, 1736, the deputies from Filipinas presented a new but brief memorial, refuting some arguments by Cadiz in regard to the proposed substitution of the spice trade for that in silks, and for this purpose citing a royal decree of 1638 in their favor, which Cadiz had declared not to be in the Recopilación of the laws, and proving, by duly attested declarations, that the said decree existed in the Manila archives. At the end of these appears a final paragraph by Abreu, the compiler of the Extracto: “All that is thus far set forth is what up to the present time has been done and appears in the Expediente of the important and long-standing negotiation in regard to the commerce of Philipinas with Nueva España, according to the acts, royal decrees, memorials, and other documents furnished to us by the office of the secretary for Nueva España, in order that this Summary [Extracto] might be drawn up and arranged, in obedience to the order of the Council. The series of the proceedings in regard to the ‘Equivalent’17 (which this ‘Period x’ comprises) remains, however, imperfect until they shall be concluded and ended by the advisory report of the Council and the decision of the king; but it seemed best not to wait for that, for the sake of facilitating, by this Summary, the more exact understanding of the gentlemen who are to express their opinions in regard to the ‘Equivalent.’ At Madrid, May 11, 1736.”]