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little else; for they have nothing in Nueva España useful to Japon, except these few articles.

      From Felipinas they carry to China silver obtained in Nueva España, but there is nothing else to carry. To Japon they take silks which they buy in China, or which the Chincheos are accustomed to bring to Manila, which is unquestionably the metropolis of Felipinas.

      From the trade of Nueva España and Felipinas with China and Japon less in customs duties are paid to your Majesty than from that of Eastern India with the same countries, because there is nothing upon which to pay them except the silks. Thus this trade is not so advantageous as that of Eastern India. Indeed, your Majesty’s profits will be much greater if this trade of Nueva España and Felipinas shall cease. This will be experienced not only by the crown of Portugal, but even by that of Castilla.

      By the crown of Portugal this will be experienced because, if the people of Eastern India alone were to sell goods and to buy those of the Chinese and Japonese, they would obviously gain more and be able to pay higher customs to your Majesty; for when the sellers and buyers are many and different, all is to the advantage of the Chinese and Japonese, because then they sell and buy on their own terms. Under such circumstances your Majesty’s subjects have sustained great injuries, and many times have sold their goods for prices far below what they had cost, in order not to carry them home. From these circumstances, too, quarrels have arisen in China and Japon between the subjects of the two crowns—to the discredit of España and to the shame of Christians there who see discords among Christians and among subjects of the same king. The Portuguese, in order not to suffer these injuries, will abandon this trade: if they do so, Eastern India will be in great danger, especially now, from those who go there from the north. And your Majesty will even come to lose it; and this through not having wherewith to maintain the fleet by means of which it is protected and prospered, as has been shown by experience. In the same way your Majesty will lose the city of Macao which you have in China, for as it is in the territory of the king of China, it has no income other than through this trade.

      This result will also be experienced by the crown of Castilla, because the trade of Nueva España with China serves only to carry thither silver which ought to come to España, and to bring from China the silks which might be sent from España. Whence great injuries to España follow, as is notorious, through the loss both of the silver of which it is deprived, and of the duties and profits on its silks. The trade of Nueva España with Japon is also unprofitable, because there are no goods on which to secure gain either going or returning, except what they may get from the silks which they carry from China, to Japon, and from some iron, copper, cabinets [escritorios], and similar articles. Indeed, on account of the before-mentioned disadvantages, it is easier to lose than to gain in this trade; and if it should be expanded your Majesty would suffer other disadvantages. This has already been seen on some occasions when it has been tried.

      The trade of Filipinas with China may be hurtful in so far as the silver carried is concerned, because this might come to España. It is true, the silk trade with China is of some profit to Filipinas as a basis of trade with Nueva España—which cannot be dispensed with—to supply the things needed from there. But this silk trade might be substituted by carrying some of the gold of Filipinas to Nueva España to buy what is necessary from España, to which thereby would come more advantage; and by carrying also some of the silks which the people of Chincheo are wont to take to Manila. These are bought in this way more advantageously than when the Filipinas merchants go to China to buy, as has been seen during many years’ experience with the former method. But it might even be well to put an end to the coming of the people of Chincheo to Manila (many of whom live there by agreement), because they have already attempted to take possession of the city; and now, when the Hollanders are resorting thither, this should be more carefully watched. To prevent the coming of the Chinese, your Majesty might order the inhabitants of Macao to take to Manila the silks, bronze, and other things needed in Filipinas which the people of Chincheo bring. And everything will be more secure, the profit will be much greater, and all of it will accrue to your Majesty’s subjects if it be ordered that the Chinese shall not sell anything that the inhabitants of Macao have to sell.

      The trade of Filipinas with Japon is very hurtful to your Majesty and to your subjects, since, as they carry in it nothing but silks from China, which the people of Eastern India and those of Macao also take to Japon, all the advantage lies with the Japonese; for, as they are in their own land, and have a larger number of articles to choose from, they buy where they wish and at their own figures, and they sell their own goods in the same way. All this is injurious to your Majesty’s subjects, and advantageous to that king to whom they pay so large customs duties. Sometimes the people of Felipinas and those of Eastern India have returned without selling or buying, in order not to suffer total loss. Thus results a great loss of customs which ought to be paid to your Majesty. And not alone do you suffer in your exchequer but also in your reputation, because the Japonese despise your Majesty’s subjects when they see the disorders that they create;7 and they lose [also] respect for your viceroys. When, in order to correct this impression, certain embassies are sent to those kings, they judge from this that your Majesty’s subjects have greater need of them than they have of your Majesty or your viceroys. This has been observed during all these past years, especially among the Japonese—who, being arrogant, proud, and warlike, think that everything depends upon them, and ask odds of no one. They, judging by the great number who go to Japon from Felipinas that they are necessary to the latter, have ever thought of making war upon these islands in order to conquer them for themselves. [In the margin: “And now that the Northerners are there, it is possible for them together to attack the forces.”]

      From what has been said the plain inference is that your Majesty, who is king of both realms, ought to order that the trade be so conducted that what is gained by one be not lost by the other. You ought also to consider which line of trade will profit you most, and should enforce this one and prohibit the other by decrees issuing from both crowns, enforcing them through your viceroys, and imposing severe penalties upon violators of such decrees, and greater ones upon those who fail to require them to be kept. [In the margin: “This was ordained by the king, Don Felipe Second, grandfather of your Majesty, as the Council of Portugal will inform you.”]

      From the foregoing it is easily seen that the trade of Eastern India is, from a temporal standpoint, the most profitable to your Majesty and for your subjects; and from a spiritual standpoint, for the maintenance and propagation of Christianity in China and Japon. This was proved in the years during which this plan was tried. [In the margin: “Conversion there has entirely ceased today because this plan has not been tried during recent years, and because of the severity of the present emperor of China, who even punished laymen for protecting the religious who went from Felipinas to China contrary to his commands.”]

      It is plain, therefore, that the trade of Nueva España and Felipinas with Japon and China is unprofitable in comparison with that of Eastern India, not to mention the marked injuries already pointed out which it inflicts upon España, and which must be repaired and corrected lest greater ones be sustained. The trade always carried on with Nueva España is fully sufficient to maintain Felipinas. In this they carry gold and some of the silks which the Chinese merchants carry from China to Manila to be sold; and they might bring silks from Macao, should your Majesty now order it. In return they bring from Nueva España what they need for their own maintenance and growth (to make it unnecessary to go to Japon and China for the same). In proportion as this plan has been observed the welfare of both the Eastern and the Western Indias has been advanced; and the kingdoms of España have had great profits from them, through their carrying silver and bringing back merchandise. Now that the Hollanders are so powerful there, it is necessary that this be watched with the greatest care and vigilance, in order that what your Majesty gets from there may not be lost.

Events in the Filipinas Islands

      From the Month of June, 617, Until the Present Date in 618

      Last year I informed you at length of the naval battle, and of the signal victory which our Lord was pleased to give us over the enemy, the Hollanders, who came to these islands with the largest force that has ever been here. They brought ten galleons well equipped with men, artillery, ammunition, and other implements of war. Of these ten galleons they

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