Their principal trade is the exchange of gold for silver, two to two and a half marcos [103] of silver for one of gold.  Two hundred leagues south of Luzon is the island of Mindanao, whence is brought cinnamon.  Likewise about one hundred leagues north of Luzon, and very near the mainland of China, is an island that they call Cauchi, which has a great abundance of pepper.  The king of China maintains trade with mis island, and so there are many Chinese there.  They have their own agency for the collection of the pepper.  Twelve or fifteen ships from the mainland of China come each year to the city of Manila, laden with merchandise:  figured silks of all sorts; wheat, flour, and sugar; many kinds of fruit; iron, steel, tin, brass, copper, lead, and other kinds of metals; and everything in the same abundance as in Espana and the Indies, so that they lack for nothing.  The prices of everything are so moderate, that they are to be had almost for nothing.  They also bring a great deal of bronze artillery, very well wrought, and all sorts of military supplies.  This island of Luzon is very suitable and convenient for trade with China; men can reach the mainland from this island, because it is so near.  On this same island there is very good material for building ships and galleys, if it should please your Majesty to send workmen for this purpose.  As has been pointed out above, the said island of Luzon is very clearly shown to be fertile and abounding in provisions, cloth, apparel, and whatever is most necessary for the preservation of human life.  Therefore this island ought to be settled and pacified, and what there is in it sought out and discovered, because the island is so large and powerful.  For that reason, it is desirable that your Majesty be pleased to provide what is necessary for that purpose, and for his plans for the future, as follows: 

The first thing necessary, in order to secure and settle the said island of Luzon, to gain accurate information of what is yet unknown about it, and to sustain the claims that we have advanced, is to send Spanish people—­that is, religious and soldiers.

The religious whom your Majesty might send for the present are forty or fifty friars—­learned theologians of mature age and good life and habits.  With these and the religious of the order of St. Augustine, who have five monasteries in the neighboring islands—­namely, one in the island and town of Cubu, another in the island and town of Oton [in Panay], another in the island and town of Mindoro, another in the city of Manila, and another in Tondo (which is in Luzon)—­great results will be achieved; for the religious of these five monasteries have labored much and assiduously in the conversion of the natives, and our Lord has been well served.  By the preaching of the gospel to them, which has been done by these said religious, there have been converted to our holy Catholic faith, receiving the water of baptism, a great number of Indians, especially those from the island and town