[The “Philippine Company” monopoly.] In 1785, the Compania de Filipinas obtained a monopoly of the trade between Spain and the colony, but it was not allowed to interfere with the direct traffic between Acapulco and Manila.  The desire was to acquire large quantities of colonial produce, silk, indigo, cinnamon, cotton, pepper, etc., in order to export it somewhat as was done later on by the system of culture in Java; but as it was unable to obtain compulsory labor, it entirely failed in its attempted artificial development of agriculture.

[Losses by bad management.] The Compania suffered great losses through its erroneous system of operation, and the incapacity of its officials (it paid, for example, $13.50 for a picul of pepper which cost from three to four dollars in Sumatra).

[Entrance of foriegn ships and firms.] In 1789 foreign ships were allowed to import Chinese and Indian produce, but none from Europe.  In 1809 an English commercial house obtained permission to establish itself in Manila. [24] In 1814, after the conclusion of the peace with France, the same permission, with greater or less restrictions, was granted to all foreigners.

[Trade free but port charges discriminating.] In 1820 the direct trade between the Philippines and Spain was thrown open without any limitations to the exports of colonial produce, on the condition that the value of the Indian and Chinese goods in each expedition should not exceed $50,000.  Ever since 1834, when the privileges of the Compania expired, free trade has been permitted in Manila; foreign ships, however, being charged double dues.  Four new ports have been thrown open to general trade since 1855; and in 1869 the liberal tariff previously alluded to was issued.

[Port’s importance lessened under Spain.] Today, after three centuries of almost undisturbed Spanish rule, Manila has by no means added to the importance it possessed shortly after the advent of the Spaniards.  The isolation of Japan and the Indo-Chinese empires, a direct consequence of the importunities and pretensions of the Catholic missionaries, [25] the secession of the colonies on the west coast of America, above all the long continuance of a distrustful commercial and colonial policy—­a policy which exists even at the present day—­while important markets, based on large capital and liberal principles, were being established in the most favored spots of the British and Dutch Indies; all these circumstances have contributed to this result and thrown the Chinese trade into other channels.  The cause is as clear as the effect, yet it might be erroneous to ascribe the policy so long pursued to short-sightedness.  The Spaniards, in their schemes of colonisation, had partly a religious purpose in view, but the government discovered a great source of influence in the disposal of the extremely lucrative colonial appointments.  The crown itself, as well as its favorites, thought of nothing but extracting the most it could from the