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The present work is built around a group of ideas briefly summarized as follows: The first three chapters portray the industries and commerce at the time of the coming of the Spaniards; and explain the causes that led to their decline; the fourth chapter dwells upon the era of restriction, and the Manila-Acapulco trade, which, for over two centuries, dominated this country, and has had such depressing effect upon economic growth; the last chapter takes up the era of liberalism, during the nineteenth century, and shows how the opening of the Philippines to foreign influence resulted in the development of its natural resources. Any attempt to trace Philippine economic development in the past three centuries must necessarily start, not so much with a detailed account of how the industries developed as with an exposition of how they were not developed. On the other hand, the remarkable social progress of the last half of the nineteenth century, following the opening of the markets of the world to Philippine products, is an encouraging indication of probable social advance yet to be attained.

1 “This modest work, which does not pretend to be without mistakes, and perhaps other flaws, has a special interest in that it treats of a matter about which the historians of those islands had hardly occupied themselves. The chronicles written by the laborious ecclesiastics, the only books of history which may be consulted about the Philippines, contain nothing but descriptions of the campaigns against the Dutch, the wars against the infidels—in the Archipelago as well as on the continent of Asia—the rebellions of the natives in some provinces, so easily suppressed, the bloody encounters with the Chinese settled in the islands, portentous miracles, progress of the missions in China, Annam and Japan, famous conflicts between the ecclesiastical jurisdiction and the civil power represented by the Governor General and the Real Acuerdo, great crimes, other notable events of different kinds and changes in the personnel and form of administration of the country.

“But in all these works, though useful and important, there is observed, among others, the absence of antecedents relative to economic and mercantile legislation, the scarcity of data to show the development of wealth of the country and of its commercial movement, the lack of a critical analysis of the legal provisions concerning such activities, and of their influence on the decadence or progress of production and commerce.” (Manuel Azcarraga y Palmero, Gobernador civil cesante de Manila, Alcalde mayor que ha sido de Cagayan y de Bulacan, Auditor honorario de Marina, etc., La Libertad de Comercio en las Islas Filipinas.—Madrid, 1872, pp. 9–10.)

2 “ * * * The result is that Spanish writers, with them the Filipinos, and to a great extent the writers of Philippine treatises in other languages (drawing hastily upon Spanish sources), have over emphasized the political history of this Philippine record. Of course, in Spain and the Spanish countries long-standing habit makes it the tendency to look to government for everything, and to think of all amelioration of evils and all incitements to progress as coming from above; while social and economic conditions in the Philippines are such as to emphasize this tendency, the aristocracy of wealth and education standing apart from the masses and being, to the latter, identified in the main with the government, with the “powers above.” Nevertheless, it is to be insisted that social and economic progress in the Philippines during the last half-century should be considered separately and studied more practically than they have been thus far.” (Le Roy’s Bibliographical Notes.—Bl. and Rb., Vol. 52, 134.)

3 For detailed discussion of this theory, see The Economic Interpretation of History, by E. R. A. Seligman. Also, History of Civilization in England, by H. T. Buckle, Vol. I, Chapter II, Influence Exercised by Physical Laws over Organization of Society and the Character of Individuals. This chapter is reprinted in Sociology and Social Progress, by T. N. Carver.

4 “In many ways the next decade of the history of the Philippines may resemble the splendid development of the neighboring country of Japan. Both countries have in past times been isolated more or less from the life and thought of the modern world. Both are now open to the full current of human affairs. Both countries promise to play an important part in the politics and commerce of the Far East. Geographically, the Philippines occupy the more central and influential position, and the success of the institutions of the Philippines may react upon the countries of southeastern Asia and Malaysia to an extent that we cannot appreciate or foresee.” (Dr. D. P. Barrows, A History of the Philippines, pp. 9–10.)

“Manila was also the commercial center of the Far East, and the entrepôt through which the kingdoms of eastern Asia exchanged their wares. Here came great fleets of junks from China laden with stores. Morga fills nearly two pages with an enumeration of their merchandise, which included all manner of silks, brocades, furniture, pearls and gems, fruits, nuts, tame buffalo, geese, horses and mules, all kinds of animals, ‘even to birds in cages, some of which talk and others sing and which they make perform a thousand tricks; there are innumerable other gewgaws and knickknacks, which among Spaniards are in much esteem.’

“Each year a fleet of thirty to forty vessels sailed with the new moon in March. The voyage across the China Sea, rough with the monsoons, occupied fifteen or twenty days, and the fleet returned at the end of May or the beginning of June. Between October and March there came, each year, Japanese ships from Nagasaki which brought wheat, silks, objects of art, and weapons, and took away from Manila the raw silk of China, gold, deer horns, woods, honey, wax, palm-wine, and wine of Castile.

“From Malacca and India came fleets of the Portuguese subjects of Spain, with spices, slaves, Negroes and Kafirs, and the rich productions of Bengal, India, Persia, and Turkey. From Borneo, too, came the smaller craft of the Malays, who from their boats sold the fine palm mats, the best of which still come from Cagayan de Sulu and Borneo, slaves, sago, water-pots and glazed earthenware, black and fine. From Siam and Cambodia also, but less often, there came trading-ships. Manila was thus a great emporium for all the countries of the East, the trade of which seems to have been conducted largely by and through the merchants of Manila.” (Ibid., pp. 173–174.)

“Their position, whether in a political or a commercial point of view, is strikingly advantageous. With India and the Malay Archipelago on the west and south, the islands of the fertile Pacific and the rising empires of the new world on the east, the vast market of China at their doors, their insular position and numerous rivers affording a facility of communication and defence to every part of them, an active and industrious population, climates of almost all varieties, a soil so fertile in vegetable and mineral productions as almost to exceed credibility; the Philippine Islands alone, in the hands of an industrious and commercial nation, and with a free and enlightened government would have become a mighty empire—they are—a waste!” (Bl. and Rb., Vol. 51, pp. 74–75, Remarks on the Philippine Islands, 1819–22, by “An Englishman.”)

5 “ * * * No one who has studied this subject with care can get rid of the idea that the religious aim was not the chief basis of the activities connected with the occupation of the Philippines. It was purely commercial. It was only later that the religious element acquired greater strength. * * * ”

“ * * * In such mercantile activities, the Philippines played the role of a central market for the distribution of products between the West and East—a work which was of greatest importance. * * * These Islands were not only a great commercial market, but also a great religious center. * * * ”

“ * * * No one who has followed the opportunities offered to these Islands, can doubt the importance that they will have, due to their geographic position, in the modern commercial market which is opened to them with the establishment of their new means of communication with the world. (Referring to the Panama Canal.) These Islands, and not Japan, or Hongkong will bind the East with the West.” (“The Importance of the Study of Philippine Geography,”—Lecture delivered by Dr. J. A. Robertson, before the Asociación Geográfica de Filipinas, November 27, 1912.)

6 Manila, October 7, 1701. (The Philippine Islands, 1493–1898—Blair and Robertson, Vol. 44, p. 139.)