[Manila’s favorable location.] The position of Manila, a central point betwixt Japan, China, Annam, the English and Dutch ports of the Archipelago and Australia, is in itself extremely favorable to the development of a world-wide trade. [17] At the time of the north-eastern monsoons, during our winter, when vessels for the sake of shelter 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 favorably placed for the west coast of America.

[The 1869 reform.] A proof that the Spanish Ultramar minister fully recognizes and appreciates these circumstances appears in his decree, of April 5, 1869, which is of the highest importance for the future of the colony.  It probably would have been issued earlier had not the Spanish and colonial shipowners, pampered by the protective system, obstinately struggled against an innovation which impaired their former privileges and forced them to greater activity.

[Bettered conditions.] The most noteworthy points of the decree are the moderation of the differential duties, and their entire extinction at the expiration of two years; the abrogation of all export duties; and the consolidation of the more annoying port dues into one single charge.

[Pre-Spanish foreign commerce.] When the Spaniards landed in the Philippines they found the inhabitants clad in silks and cotton stuffs, which were imported by Chinese ships to exchange for gold-dust, sapan wood, [18] holothurian, edible birds’ nests, and skins.  The Islands were also in communication with Japan, Cambodia, Siam, [19] the Moluccas, and the Malay Archipelago.  De Barros mentions that vessels from Luzon visited Malacca in 1511. [20]

[Early extension under Spain.] The greater order which reigned in the Philippines after the advent of the Spaniards, and still more the commerce they opened with America and indirectly with Europe, had the effect of greatly increasing the Island trade, and of extending it beyond the Indies to the Persian Gulf.  Manila was the great mart for the products of Eastern Asia, with which it loaded the galleons that, as early as 1565, sailed to and from New Spain (at first to Navidad, after 1602 to Acapulco), and brought back silver as their principal return freight. [21]

[Jealousy of Seville monopolists.] The merchants in New Spain and Peru found this commerce so advantageous, that the result was very damaging to the exports from the mother country, whose manufactured goods 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 exploiting her American colonies, and which let the silver of His Majesty’s dominions pass into