[Profit from tobacco monopoly and foreign trade.] Among the various causes which have contributed to produce so favorable an alteration, the chief one have been the establishment of the tobacco monopoly, on behalf of the crown, and the opening of the port of Manila to the flag of other nations, at peace with Spain.  The first has considerably increased the entries into the public treasury, and the second has tended to multiply the general mass of mercantile operations, independent of the other beneficial effects this last measure must have produced in a country, whose resources, trade and consumption had, from the time of the conquest, experienced the fatal shackles imposed by jealousy and ignorance.

[Improvement in public finances.] The improved aspect the colony soon assumed, by the introduction of this new system, as was natural, awakened the attention of ministers, and induced them more easily to consent to the measures subsequently proposed to them, principally intended to place those distant dominions on a footing of permanent security, so as to enable them to repel any fresh attempts on the part of an enemy.  As, however, the productions of the country increased, the public expenses also became greater, although always in a much smaller proportion, with the exception of the interval between the years 1797 and 1802, when the government, fearful of a second invasion, was compelled, at its own expense, to provide against the danger with which these Islands were then threatened.  If, therefore, as appears from the official reports of the treasurer-general, Larzabal, in my possession, the receipts at the treasury, in 1780, amounted only to $700,000 including the situado, or annual allowance for the expenses of government sent from New Spain, and after the ordinary charges of administration had been paid, a surplus of $170,000 remained in the hands of the treasurer; at present we have the satisfaction to find that the revenue is equal to $2,625,176.50 and the expenses do not exceed $2,179,731.87 by which means an annual surplus of $445,444.62 is left, applicable to the payment of the debt contracted during the extraordinary period above mentioned, now reduced to about $900,000 and afterwards transferable to the general funds belonging to the crown.

[Economy over Spanish-American colonial administration.] With regard to the administrative system, it is in every respect similar to the one observed in our governments of America, with this difference only, that, in the Philippine Islands, greater economy prevails in salaries, as well as in the number of persons employed.  In former times, the establishment of intendencies, or boards of administration, was deemed expedient in Manila, Ilocos, Camarines, Iloilo, and Cebu; but they were soon afterwards reformed, or rather laid aside, on account of their being deemed superfluous.  I would venture to state the grounds on which this opinion was then formed; but, as the sphere in which