Recurring for a moment to the higher ecclesiastical organization, the judicial functions of the church were represented by the archbishop’s court and the commissioner of the Inquisition.  The Episcopal court, which was made up of the archbishop, the vicar-general, and a notary, tried cases coming under the canon law, such as those relating to matrimony and all cases involving the clergy.  Idolatry on the part of the Indians or Chinese might be punished by this court. [86] The Holy Inquisition transplanted to New Spain in 1569 stretched its long arm across the great ocean to the Philippines, in the person of a commissioner, for the preservation of the true faith.  The Indians and Chinese were exempted from its jurisdiction.  Its processes were roundabout, and must have given a considerable proportion of its accused a chance to die a natural death.  The Commissioner must first report the offense to the Court in New Spain; if a trial was ordered, the accused must be sent to Mexico, and, if convicted, must be returned to the Philippines to receive punishment. [87]

The most peculiar feature of the old regime in the Philippines is to be found in the regulations of the commerce of the islands.  In the Recopilacion de leyes de los reinos de las Indias, the code of Spanish colonial legislation, a whole title comprising seventy-nine laws is devoted to this subject.  For thirty years after the conquest the commerce of the islands was unrestricted and their prosperity advanced with great rapidity. [88] Then came a system of restrictions, demanded by the protectionists in Spain, which limited the commerce of the islands with America to a fixed annual amount, and effectively checked their economic development.  All the old travelers marvel at the possibilities of the islands and at the blindness of Spain, but the policy absurd as it may seem was but a logical application of the protective system not essentially different from the forms which it assumes today in our own relations to Porto Rico, Cuba, and the Philippines.

The Seville merchants through whose hands the Spanish export trade to the New World passed looked with apprehension upon the importation of Chinese fabrics into America and the exportation of American silver to pay for them.  The silks of China undersold those of Spain in Mexico and Peru, and the larger the export of silver to the East the smaller to Spain.  Consequently to protect Spanish industry and to preserve to Spanish producers the American market, [89] the shipment of Chinese cloths from Mexico to Peru was prohibited in 1587.  In 1591 came the prohibition of all direct trade between Peru or other parts of South America and China or the Philippines, [90] and in 1593 a decree—­not rigorously enforced till 1604—­which absolutely limited the trade between Mexico and the Philippines to $250,000 annually for the exports to Mexico, and to $500,000 for the imports from Mexico, to be carried in two ships not to exceed three hundred tons burden. [91] No Spanish subject was allowed to trade in or with China, and the Chinese trade was restricted to the merchants of that nation. [92]