All of these islands and their natives, so far as they were pacified, were apportioned into encomiendas from the beginning.  To the royal crown were allotted those which were chief towns and ports, and the dwellers of the cities and towns; and also other special encomiendas and villages in all the provinces, for the necessities and expenses of the royal estate.  All the rest was assigned to the conquerors and settlers who have served and labored for the conquest and pacification, and in the war.  This matter is in charge of the governor, who takes into consideration the merits and services of the claimants. [206] In like manner the villages that become vacant are assigned.  There are many very excellent encomiendas throughout the islands, and they offer many profits, both by the amount of their tributes and by the nature and value of what is paid as tribute. [207] The encomienda lasts, according to the royal laws and decrees, and by the regular order and manner of succession to them, for two lives; but it may be extended to a third life, by permission.  After it becomes vacant, it is again assigned and granted anew.

The tributes paid to their encomenderos by the natives were assigned by the first governor, Miguel Lopez de Legazpi, in the provinces of Vicayas and Pintados, and in the islands of Luzon and its vicinity; they were equal to the sum of eight reals annually for an entire tribute from each tributario.  The natives were to pay it in their products—­in gold, cloth, cotton, rice, bells, fowls, and whatever else they possessed or harvested.  The fixed price and value of each article was assigned so that, when the tribute was paid in any one of them, or in all of them, it should not exceed the value of the eight reals.  So it has continued until now, and the governors have increased the appraisements and values of the products at different times, as they have deemed advisable.

The encomenderos have made great profits in collecting in kind, for, after they acquired possession of the products, they sold them at higher prices.  By this they increased their incomes and the proceeds of their encomiendas considerably; until a few years ago his Majesty, by petition of the religious and the pressure that they brought to bear on him in this matter, ordered for this region that the natives should pay their tribute in whatever they wished—­in kind or in money—­without being compelled to do otherwise.  Consequently, when they should have paid their eight reals, they would have fulfilled their obligation.  Accordingly this rule was initiated; but experience demonstrates that, although it seemed a merciful measure, and one favorable to the natives, it is doing them great injury.  For, since they naturally dislike to work, they do not sow, spin, dig gold, rear fowls, or raise other food supplies, as they did before, when they had to pay the tribute in those articles.  They easily obtain, without so much work, the peso of money which is the amount