The Galleon was more to Manila than even the Great Ship to Macao; the Portuguese had their carrying trade, and it would seem a more enterprising freelance element, and it was these that enabled Macao to adapt and survive even after the Dutch had blockaded the Malacca Straits and the Japanese had expelled them from Nagasaki.^[46] Trans-Pacific crossings were almost annual from the foundation of Manila,^[47] and in 1593 the Galleon trade was regulated at a normal two ships a year, practically in the form in which it was to persist until the end of Spanish rule in Mexico, except for a great increase in unit-tonnage—originally the ships were to be limited to 300 tons, but this, like so much else in Spanish regulations, was a dead letter almost from the start, and already by 1614 there were 1000-tonners.

The hope of tapping the spice trade from the Philippines soon dwindled away (although as late as 1579 Sande was still yearning after the Moluccas);^[48] it became clear that economically only the China trade could justify the Spanish presence in the islands. The profits from Chinese silk could be enormous; it had to be paid for with silver, but here Mexico was a providence: ‘The extraordinary luck of the Spanish Philippines was to be at the point of contact between two monetary systems, a world of dear silver and a world of cheap silver.’^[49] But the silk, and the minor wares—porcelain, drugs, luxury craft-work—came to Manila in Chinese junks, and after 1604 also in Portuguese ships from Macao, and on this side the Spanish ‘part in the trade was a stationary one’, simply sitting- 162 -on a fine harbour splendidly situated to be a focus of shipping in the Southern Seas. But for two or three months of the year Manila was a chaos of shipping and forwarding.^[50]

The organisation of the Galleon trade was extraordinary: reading Schurz's chapter ‘City and Commerce’ one has almost the strange impression that the entire colony acted as both individual shareholders and managers of a joint-stock company; whence, naturally, some confusion.^[51] There was a permiso, or global quota of cargo, which throughout the seventeenth century was set at a value of 250,000 pesos; within this total all citizens had in theory the right to consign, in proportion to their wealth, on the King's ships, each person's entitlement being apportioned by a committee, the junta de repartimiento. In practice, the trade fell increasingly into the hands of a few active entrepreneurs, who bought up the boletas, or permits, of the small fry, a highly speculative affair. A large share was taken by groups such as the cathedral chapter and the obras pias, or charitable foundations, which ran orphanages, hospitals, and the like services. These, by their continuity of experience and policy, amassed large capitals and were able to act as bankers for the shippers, lending at anything from 20 to 50 per cent.

As well as securing his boleta from the junta de repartimiento, the consignor had to secure his goods from the commissioner of the pancada, the bulk-buying scheme which in theory handled all Chinese merchandise for export on the Galleon. When we add to this the normal complications of Spanish shipping and customs regulation, and the fact that the 250,000 pesos in Manila would (even officially) be worth 500,000 in Mexico, it will be seen that the system, like so much in the Spanish combination of bureaucratic control with private financing, was guaranteed to produce delays and corruption on every hand. The real value of the cargoes was always grossly in excess of the permiso, often several times greater. Everybody was in the racket: each seaman even was allowed to carry one chest, ‘which had a most expansive capacity’; and the Chinese packers were artists in the compaction of the small-bulk high-value staples of the trade. The resulting overlading between and even on decks, often at the expense of space for necessary stores and gear, interfered with the working of the ships and was responsible for several wrecks; and the loss of a Galleon, by storm or capture, meant a ruinous year for the city. But the profits were enormous: officially set at a permissible 83 per cent, represented as a miserable 5 to 10 in Manileñno petitions, inflated up to 1000 in jealous Dutch or English eyes, they ranged in actuality between 100 and 300 per cent.

The Union of the Crowns was only reluctantly accepted at Macao;^[52] although now officially brethren, Lusians and Castilians often behaved in less than fraternal fashion. It is an ironic comment on the Union that the Cabildo of Manila wrote to the King that the Audiencia should be suppressed since not only was it superfluous for seventy Spanish households in Manila and seventy in the rest of the islands (plus a few troops), but as they alleged, ‘our Portuguese neighbours- 163 -cannot believe that it has been established for so few people’ but ‘imagine that it is … to overpower and govern them’ and so ‘have shut the door to the commerce, friendship, and intercourse which was commencing. …’^[53]

Naturally Manila (and Mexico) wanted to get into the direct China trade; equally naturally the Portuguese saw in this the complete ruin of their ‘Eastern Yndias’, and argued that Castille itself would suffer, since China would drain ‘all the money and coin’ from New Spain ‘and none will go to Hespaña’ (it must be remembered that Macao's silver came from Japan). This consideration carried weight in Madrid itself, so much so that in 1586 the King signed a decree prohibiting Mexican imports from China altogether, partly in the interest of cloth exports from the home country. The Viceroy of New Spain, Manrique, put up an able counter-argument and, more to the point, simply saw ‘fit to disregard your Majesty's orders, until you direct me further’.^[54] There was a Cabildo in Mexico City as well as in Manila, and trade with the Sangleys went on.

Rigid separation between the two Iberian spheres was more easily applied to the large and bureaucratically organised long-distance trades: the voyages of Francisco Gali in 1584 and João da Gama in 1589–90, direct from Macao to Acapulco, were exceptional and caused scandal. But the Macao-Manila silk trade was sufficiently profitable to both sides to survive repeated official bans, and it remained in Portuguese hands (so far as it was not in Chinese) despite the demand in 1586 by a junta of the leading officials and citizens of Manila that they should be allowed to ‘make voyages to Japon, Macan, and all other kingdoms and posts, whether Portuguese or pagan’. The memorial of this junta is indeed a most remarkable document. Much of it deals with internal problems and is a level-headed and liberal reform program; all that is wrong is that for it to work successfully the Castilian leopards—officials, ecclesiastics, merchants, encomenderos—would have had to change their spots. The rest is a plan for the conquest of China, at least more realistic than Riquel's sixty stout soldiers: the forces needed would be 10–12,000 Spaniards and Portuguese, 5–6000 ‘Indians’ from Visaya (‘a spirited and sturdy people’), and 5–6000 Japanese, who might prefer to go in with the Portuguese, whom they knew already, and could be guided by the fathers of the Society of Jesus. Such large forces would be needed to overawe any thought of resistance; otherwise the Spaniards would win but, as they did in once-populated but now desert countries like Cuba, at the price of wrecking everything, including the ‘so wonderful’ Chinese government. In that case we shall lose ‘our reputation and the bright hopes we now have of getting the port of Macan and a passage into Japon’.^[55]

This went into the discard; the one project of conquest that these forward-policy men-on-the-spot got away with was a confused and abortive adventure in Cambodia, an absurd dispersal of scanty forces when more than all available strength might well have been needed for defence against Japan.^[56] The Manileños persisted in attempts to secure a base on the China coast, the Macaonese as persistently blocked them. The ‘bright hopes’ received their quietus in 1598–9,- 164 -when Cantonese officialdom had at last been persuaded to let the Spaniards settle ‘in perpetuity’ at ‘El Pinal’, somewhere between Canton and Macao. Far from co-operating in the conquest and conversion of China, the Portuguese informed the mandarins that the Spaniards were ‘robbers and insurrectionaries, and people who raised revolts in the kingdoms they entered’; finding words not enough, they tried to expel their fellow-subjects and fellow-Christians by force of arms. They were staved off, but El Pinal was abandoned.^[57]

Already, however, the focus of rivalry had shifted to Japan, where nationalist, mercantile, and missionary motives were nicely compounded in a paradigm: Portingall: Castilian, Macaonese: Manileño, Jesuit: Franciscan.