[Royal Phillipine company.] The various modifications this corporate body has successively experienced, have, in great measure, changed the essence of its original constitution, and the remonstrances of its directors, founded on the experience of a long series of years, at length induced the government at home to sanction alterations dictated by existing circumstances. The project of raising these Islands from the neglected state in which they were, and in some measure to place them in contact with the mother country, accompanied by a wish to give a new and great impulse to the various branches of industry which constitute the importance of a colony, could not have been more laudable; but, as was afterwards seen, the instrument employed was not adequate to the object in view. At the same time that the company were charged to promote, and, by means of their funds, to vivify the agriculture and industry of these provinces, the necessary powers and facilities to enable them to reap the fruits of their sacrifices were withheld. The protection granted to this establishment, did not go beyond a general recommendation in favor of its enterprises, and, in short, far from enjoying the exclusive preponderance obtained at their commencement by all the other Asiatic companies, that of the Philippine Islands labored under particular disadvantages.

[Local progress under adverse conditions.] Notwithstanding an organization so imperfect, scarcely had the agents of the new Company arrived at Manila, when they distributed through the country their numerous dependents, commissioned to encourage the natives by advances of money. They established subaltern factories in the Provinces of Ilocos, Bataan, Cavite, and Camarines; purchased lands; delivered out agricultural implements; founded manufacturies of cotton cloths; contracted for the crops of produce at very high prices; offered rewards and, in short, they put in motion every partial resources they were able to avail themselves of and their limited means allowed. It would be extremely easy for me, in this place, to enter a particular enumeration of the important services of this kind rendered by the company, and to exhibit, in the most evident point of view, the advantages thence derived to these Islands, if, besides being slightly touched upon in the preceding articles, this task had not been already ably performed by the Factor Don Juan Francisco Urroz, in his accurate report on this subject, addressed to the governing committee of the company, in 1803. In justice I will nevertheless observe, that this establishment, anxiously resolved to attain the end proposed, in spite of so many obstacles, constantly followed up its expensive system without being disheartened; nor did the contrarieties with which the Royal Audiencia, or High Court of Justice, frequently paralyzed its plans, the indifference of the governors, or the general opposition and jealousy of the other classes, in any way tend to relax its efforts, till at length, convinced of the impossibility of successfully contending, alone and without any other arms than its own reduced capital; and, on the other hand, well aware that a political body of this kind in vain seeks to unite within itself the triple and opposite characters of agriculturalist, manufacturer, and merchant, a determination was taken to alter the plan, and withdraw the factories established in the provinces, and by adopting a rigid economy and confining the operations in future to the purchase of such produce and manufactured articles as suited their trade, and were voluntarily brought by the natives to their stores, the expenses of the Company were curtailed, and a plan of reform introduced into all their speculations. By this means also they always secured an advantageous vent for the productions of the country, after having been the chief spring by which agriculture was promoted and encouraged in a direct manner.

[Handicapped in outside trade] The most beneficial reform, however, introduced by this establishment into its system, has, in reality, been derived from the variation or rather correction of its plans and enterprises, purely maritime. The government being desirous to increase the relations of this colony by every possible means, and to convert it into a common center of all the operations of the new company, at first required of the agents that the purchases and collection of goods from the coast of Coromandel, Bengal, and China, destined for Spain, should take place at Manila, either by purchasing the articles in that market, or through the medium of previous contracts to deliver them there. From this it is easy to infer, that the company was infallibly exposed to the harsh terms the respective contractors sought to impose upon them, as well with regard to prices as qualities, unless, in many cases, they preferred being left without the necessary assortments. Hence may it, without the smallest exaggeration, be affirmed, that, summing up all the surcharges under which the shipments left the port of Manila, and comparing them with those which might have been sent direct from the above-mentioned points, and without so extraordinary a detour as the one prescribed by law, the difference that followed in the prime cost of the cargos was not less than 80 per cent. The urgent manner, however, in which the directors of the company did not cease to deplore and complain of so evident a hardship, at length had the desired effect, and after existing ten or twelve years, so preposterous a system was successfully overthrown, and permission obtained from the king for the establishment of Spanish factories in the neighborhood of the China and India manufactures, as well as the power of addressing shipments direct to those foreign dominions. The enlightened policy of their respective governments did not allow them to hesitate in giving a favorable reception to our factors and vessels, and the purchases and shipments of Asiatic goods being thus realized without the old obstructions, the Company was reasonably led to hope being able soon to increase its operations, and progressively present more satisfactory results to the shareholders, when those political convulsions succeeding soon after, which have unhinged or destroyed all the ordinary relations of trade, compelled them to abandon their hopes, till the wished-for calm should be again restored.

[Temporary expedient of 1803.] In consequence of the new character and route given to the commercial enterprises of the Company, as authorized by a royal decree of July 12, 1803, the functions of the Manila factors were reduced to the annual shipment of a cargo of Asiatic goods to Peru, valued at $500,000, but only as long as the war lasted, and till the expiration of the extraordinary permits granted through the goodness of the king, and also to the transmitting to China and Bengal of the specie brought from America, and the collecting of certain quantities of indigo, sugar, or other produce of the Islands, with a view to gain by reselling it in the same market. Consequently, the moment things return to their pacific and ordinary course, will be the period when the necessity of the future existence of this establishment will cease, or at least, when the propriety will be evident of its reform or assimilation to the other commission houses, carrying on trade in Vera Cruz, Mexico, etc., which, not being hired establishments, do not create expenses when they cease to transact business.

[Competition of foreign merchants.] Against a measure of this kind it would be useless to allege, that, "by the exclusive privilege to introduce spirits and European effects into the colony, the Company has contracted the obligation of always keeping it properly supplied; that their very institution had for the basis the general improvement of the Islands, and in order duly to comply with these duties, it becomes indispensably necessary to keep up the present expensive establishment;" for, in the first place, in order, to render it incumbent on the company to introduce an indefinite quantity of European articles, it previously would be necessary to provide a vent for them, and this can never be the case, unless the exclusion of all competitors in the market is rigorously carried into effect. As things now are, the North Americans, English, French, and every other nation that wishes, openly usurped this privilege, by constantly inundating the Islands with spirits and all kinds of effects, and it is very evident that this same abuse which authorizes the infraction of the above privilege, if in that light it could in any way be considered, totally exonerates the company from all obligations by them contracted under a different understanding. Besides, the circumstances which have taken place since the publication of the royal decree, creating the above establishment into a corporate body, in the year 1785, have entirely changed the order established in this respect. In the first place, the port of Manila has been opened to foreign nations, in consequence of the disinterested representations of the company itself, and for the direct advantage of general trade; nor was it necessary to prevent our new guests from abusing the facilities thus granted to them, and much less to confine them to the mere introduction of Asiatic goods, the original plea made use of. In the second, as soon as the inhabitants of the Philippine Islands became familiar with the more useful and elegant objects of convenience and luxury, which they were enabled to purchase from foreigners, at reasonable prices, it was natural for them to pay little regard to the superfluous aid of the company, more particularly when the latter were no longer able to sustain the competition, either in the sale or supply of a multitude of articles, which, thanks to our own national simplicity, are scarcely known in Spain, whence their outward-bound cargoes are divided. Hence it follows that, far from the importation and supplies of the company being missed, it may with great reason be presumed, that this formal renunciation of this ideal privilege of theirs, must rather have contributed to secure, in a permanent manner, adequate supplies for all the wants and whims of the inhabitants of the colony; and that the publicity of such a determination would act as a fresh allurement successively to bring to the port of Manila a host of foreign speculators, anxious to avail themselves of a fresh opening for commercial pursuits.

[Company not a philanthropy.] The other objection, founded on the mistaken notion of its being inherent in, and belonging to, the very essence of the company, to promote the general improvement of the Philippine Islands, if well considered, will appear equally unjust. It is, in fact, a ridiculous, although too generally received, a prejudice to suppose, that the founders of this establishment proposed to themselves the plan of sinking the money of the shareholders in clearing the lands, and perfecting the rude manufactures of these distant Islands. To imagine this to have been one of the principal objects of the institution, or to suppose that, on this hard condition, their various privileges and exemptions were granted to them, is so far from the reality of the fact, that it would only be necessary to read with attention the 26th article of the quoted royal decree of creation, in order more correctly to comprehend the origin and constitutive system of this political body.

"The latter," says the Duke de Almodovar, "is reduced to two principal points: the first of which is the carrying of the trade of Asia with that of America and Europe; and the second, the encouragement and improvement of the productions and manufacturing industry of the Islands. The one is the essential attribute of the company, constituting its real character of a mercantile society; and, in the other respect, it becomes an auxiliary of the government, to whom the duties alluded to more immediately belong." If to the above we add the preamble of the 43rd article of the new decree of 1803, the recommendation, made to the company, to contribute to the prosperity of the agriculture and manufacturing industry of the Islands, will appear as a limited and secondary consideration; for even if the question were carried to extremes, it could never extend to any more than the application of four per cent of the annual profits of the company indistinctly to both branches. If, however, any doubts still remained, the explanation or solution recently given to this question would certainly remove them; because, by the simple fact of its being expressed in the latter part of the aforesaid 43rd article, [Profit percent to go to Spain.] "That the above-mentioned four per cent was to be laid out, with the king's approbation, in behalf of the agriculture and manufacturing industry of Spain and the Philippine Islands," it is clear that the king reserves and appropriates to himself the investment of the amount to be deducted from the general dividends, in order to apply it where and how may be deemed most advisable. Consequently, far from considering the company in that respect under an obligation to contribute to the improvement of the Philippines exclusively, the only thing that can be required of them, when their charter is withdrawn, is, the repayment to the royal treasury of the four per cent on their profits, for a purpose so vaguely defined. In following up this same train of argument, it would seem that, in order to render the amount to be deducted from the eventual profits of the company, in the course of time, a productive capital in the hands of the sovereign, the funds of the society not only ought not to be diverted to the continuation of projects which consume them, but, on the contrary, it is necessary to place at their disposal the direct means by which these funds can be increased, in order to make up to the company in some measure the enormous losses experienced of late years, and at once free their commerce from the shackles with which it has hitherto been obstructed.

[Need of special privileges] Finally, after twenty-four years of impotent and gratuitous efforts in the Philippines, and of the most obstinate opposition on the part of their rivals, it is now time for the company, by giving up the ungrateful struggle, to reform in every respect their expensive establishment in Manila, and to direct their principal endeavors to carry into effect the project so imperfectly traced out in the new decree of 1803. The opinion of the most vehement enemies of the privileged bodies tacitly approves this exception in their favor. Adam Smith, avowedly hostile to all monopolies, feels himself compelled to confess that, "without the incentives which exclusive companies offer to the individuals of a nation carrying on little trade, possibly their confined capitals would cease to be destined to the remote and uncertain enterprises which constitute a commerce with the East Indies."

[Spanish commerce in its infancy.] Our commerce, compared with that of other nations, notwithstanding what may be said on this subject, is most assuredly yet in a state of infancy. That with Asia, more especially, with the exception of the Royal Company, is almost unknown to all other classes. If it is, therefore, wished to exclude our many rivals from so lucrative a branch of trade as that which constitutes supplies for the consumption of the Peninsula and its dependencies, the means are obvious. The most material fact is in fact already done. The navigation to the various ports of Asia is familiar to the company's navy; their factors and clerks have acquired a practical knowledge of that species of trade, essential to the undertaking, as well as such information as was at first unknown; but, after the great misfortune this body has experienced, it will be indispensably necessary to aid and invigorate them with large supplies of money, following the example of other governments in similar cases; in order that the successful issue of their future operations may compensate their past losses, and worthily correspond with the magnitude of the object.

[Philippines a burden to Spain.] This Asiatic colony, although considered as conferring great lustre on the crown and name of our monarch, by exhibiting the vast extent of the limits of his dominions, has in reality been, during a long series of years, a true burden to the government, or at least, a possession whose chief advantages have redounded in favor of other powers, rivals of our maritime importance. Notwithstanding all that has been said on the score of real utility, certain it is, that the Philippine establishment has cost the treasury large sums of money; although, within the last twenty-five or thirty years, it must be confessed that the public revenues has experienced a considerable increase, and, of itself, has become an object of some consequence to the state.

[Profit from tobacco monopoly and foreign trade.] Among the various causes which have contributed to produce so favorable an alteration, the chief one have been the establishment of the tobacco monopoly, on behalf of the crown, and the opening of the port of Manila to the flag of other nations, at peace with Spain. The first has considerably increased the entries into the public treasury, and the second has tended to multiply the general mass of mercantile operations, independent of the other beneficial effects this last measure must have produced in a country, whose resources, trade and consumption had, from the time of the conquest, experienced the fatal shackles imposed by jealousy and ignorance.

[Improvement in public finances.] The improved aspect the colony soon assumed, by the introduction of this new system, as was natural, awakened the attention of ministers, and induced them more easily to consent to the measures subsequently proposed to them, principally intended to place those distant dominions on a footing of permanent security, so as to enable them to repel any fresh attempts on the part of an enemy. As, however, the productions of the country increased, the public expenses also became greater, although always in a much smaller proportion, with the exception of the interval between the years 1797 and 1802, when the government, fearful of a second invasion, was compelled, at its own expense, to provide against the danger with which these Islands were then threatened. If, therefore, as appears from the official reports of the treasurer-general, Larzabal, in my possession, the receipts at the treasury, in 1780, amounted only to $700,000 including the situado, or annual allowance for the expenses of government sent from New Spain, and after the ordinary charges of administration had been paid, a surplus of $170,000 remained in the hands of the treasurer; at present we have the satisfaction to find that the revenue is equal to $2,625,176.50 and the expenses do not exceed $2,179,731.87 by which means an annual surplus of $445,444.62 is left, applicable to the payment of the debt contracted during the extraordinary period above mentioned, now reduced to about $900,000 and afterwards transferable to the general funds belonging to the crown.

[Economy over Spanish-American colonial administration.] With regard to the administrative system, it is in every respect similar to the one observed in our governments of America, with this difference only, that, in the Philippine Islands, greater economy prevails in salaries, as well as in the number of persons employed. In former times, the establishment of intendencies, or boards of administration, was deemed expedient in Manila, Ilocos, Camarines, Iloilo, and Cebu; but they were soon afterwards reformed, or rather laid aside, on account of their being deemed superfluous. I would venture to state the grounds on which this opinion was then formed; but, as the sphere in which the king's revenue acts in these Islands increases and extends, which naturally will be the case if the plans and improvements dictated by the present favorable circumstances are carried into effect, I do not hesitate to say that it will be necessary again to appeal to the establishment of a greater number of boards for the management and collection of the various branches of the revenue, whether they are called intendencies, or by any other name; as it will be extremely difficult for the administration to do its duty, on the confined and inadequate plan under which it is at present organized.

[Fiscal system.] Under its existing form, it is constituted in the following manner: The governor of the Islands, in his quality of superintendent or administrator general, and as uniting in himself the powers of intendent of the army, presides at the board of administration of the king's revenue, which is placed in the immediate charge of a treasurer and two clerks. The principal branches have their respective general directors, on whom the provincial administrators depend, and the civil magistrates, in the quality of sub-delegates, collect within their respective districts, the tributes paid by the natives in money and produce, and manage everything else relating to the king's revenue. In ordinary cases, the general laws of the Indies govern, and especially are the ordinances or regulations of the Intendents of New Spain (Mexico) ordered to be observed in the Philippines. It ought further to be observed, that, in these Islands, the same as in all the vice-royalties and governments of America, there is a distinct body of royal decrees in force, which, in themselves, constitute a code of considerable size.

[Opposition to tobacco monopoly.] The process of converting the consumption of tobacco into a monopoly met with a most obstinate resistance on the part of the inhabitants, and the greatest circumspection and constancy were necessary for the governor, Don Jose Basco, to carry this arduous enterprise into effect. Accustomed to the cultivation of this plant without any restriction whatever, and habituated to its use from their infancy, it appeared to the people the extreme of rashness to seek simultaneously to extirpate it from the face of the greatest part of the Island of Luzon, in order to confine its culture within the narrow limits of a particular district. They were equally revolted at the idea of giving to a common article a high and arbitrary value, when, besides, it had become one of the first necessity. Every circumstance, however, being dispassionately considered, and the principle once admitted that it was expedient for the colony to maintain itself by means the least burdensome to the inhabitants, it certainly must be acknowledged that, although odious on account of its novelty and defective in the mode of its execution, a resource more productive and at the same time less injurious, could not have been devised. Hence was it that the partisans of the opposite system were strangely misled, by founding their calculation on false data, when they alleged that a substitute, equivalent to the increased revenue supposed to arise out of the monopoly of tobacco, might have been resorted to by ordering a proportionate rise in the branch of tributes. In fact, no one who had the least experience in matters of this kind, can be ignorant of the open repugnance the natives have always evinced to the payment of the ordinary head-tax (cedula), and the broils to which its collection has given rise. Besides, if well examined, no theory is more defective and more oppressive on account of the disparity with which it operates, than this same wrongly-boasted impost; for, however desirous it may be to simplify the method of collecting the general revenue of a state, if the best plan is to be adopted, that is, if public burdens are to be rendered the least obnoxious, it is necessary preferably to embrace the system of indirect contribution, in which class, to a certain degree, the monopoly of all those articles may be considered as included which are not rigorously of the first necessity, and only compel the individual to contribute when his own will induce him to become a consumer.

[Doubling of insular revenue thru tobacco.] Let this be as it may, certain it is, that to Governor Basco we are indebted for having doubled the annual amount of the revenue of these Islands, by merely rendering the consumption of tobacco subservient to the wants of the crown. It was he who placed these Islands in the comfortable situation of being able to subsist without being dependent on external supplies of money to meet the exigencies of government. It ought, however, to be remarked that, although they have been in the habit of receiving the annual allowance of $250,000 for which a standing credit was opened by the government at home on the general treasury of New Spain, considerable sums have, nevertheless, on various occasions, been remitted from the Philippines to Spain, through the channel of the Captain-General. * * * If these remittances have been suspended for some years past, it has evidently been owing to the imperious necessity of applying the ordinary proceeds of the revenue, as well as other extraordinary means, to unforeseen contingencies arising out of peculiar circumstances.

[Tobacco belt.] The planting and cultivation of tobacco are now confined to the district of Gapan, in Pampanga Province, to that of Cagayan, and to the small Island of Marinduque. The amount of the crops raised in the above three points and sold to the king, may, on an average, be estimated at fifty thousand bales, grown in the following proportion: Gapan, forty-seven thousand bales; Cagayan, two thousand, and Marinduque, one thousand. This stock, resold at the monopoly prices, yields a sum equal to about one million of dollars, and deducting therefrom the prime cost and all other expenses, legally chargeable on this branch, the net proceeds in favor of the revenue amount to $550,000 or upwards of one hundred twenty-two per cent. This profit is so much more secure, as it rests on the positive fact that, however great the quantity of the article sold furtively and by evading the vigilance of the guards, as the demand and consumption are excessive and always exceed the stock on hand, a ready sale cannot fail to be had for all the stock placed in the hands of the agents of the monopoly. From this it may also be inferred how much the net proceeds of this branch would be increased, if without venturing too far in extending the plantations and consequent purchases, care was taken to render the supplies more proportionate to the consumption; for, by a clear profit of one hundred twenty-two per cent, falling on a larger capital, it follows that a corresponding result would be obtained. In a word, the sales, far from declining or being in any way deemed precarious, are susceptible of a great increase, consequently this branch of revenue merits the serious attention of government beyond all others.

[Defective sales system.] It is, however, to be lamented that, instead of every facility being given to the sale of tobacco and the consumption thus encouraged, the public meet with great difficulties and experience such frequent obstacles and deficiencies in the supplies, that with truth it may also be said, the sales are affected in spite of the administrators themselves. In the capital alone it is a generally received opinion that a third part more would there be consumed, if, instead of compelling the purchaser to receive the tobacco already manufactured or folded, he was allowed to take it from the stores in its primitive state; and if the minor establishments in the provinces were constantly supplied with good qualities, an infinitely larger quantity might be sold, and by this means a great deal of smuggling also prevented. Such, however, is the neglect and irregularity in this department, that it frequently happens in towns somewhat distant from Manila, no other tobacco is to be met with than what the smugglers sell, and if, perchance, any is to be found in the monopoly stores, it is usually of the worst quality that can be imagined.

[Loss from preventable causes.] I pass over, in silence, the other defects gradually introduced, as evils, in a greater or lesser degree, inseparable from this part of public administration in every country in which it has been deemed necessary to establish monopolies; but I cannot refrain from again insisting on the urgency with which those in power ought to devote themselves, firmly and diligently, to the destruction of abuses which have hitherto paralyzed the progress of the branch in question, because I am well persuaded, that, whenever corresponding means are adopted, it will be possible in a short time to double the proceeds. What these means are, it is not easy, nor indeed essential, to particularize in a rapid sketch, like this, of the leading features and present state of the Philippine Islands. I shall, therefore, merely remark, that it will be in vain to wish the persons engaged in the management of this department to exert their real zeal and sincerely co-operate in the views of government, as long as they are not placed beyond the necessity of following other pursuits and gaining a livelihood in another way; in a word, unless they have a salary assigned them, corresponding to the confidence and value of the important object entrusted to their charge, no plan of reform can be rendered efficient.

[Abuses by revenue officers.] At the same time steps are taken to augment the revenue arising out of tobacco, it would be desirable, as much as possible, to improve the methods used with regard to those who gather in the crops, by endeavoring to relieve them from the heavy conditions imposed upon them; conditions which, besides exposing them to the odious effects of revenue-laws, by their very nature bring upon them many unpleasant consequences, and often total ruin. In order that a correct opinion may be formed of these defects, it will suffice to observe that, under pretext of preventing smuggling, the guards and their agents watch, visit, and, if I may use the expression, live among the plantations from the moment the tobacco-seedlings appear above ground, till the crops are gathered in. After compelling the Filipino planter to cut off the head of the stem, in order that the plant may not become too luxurious, the surveyors then proceed to set down, not only the number of plants cultivated on each estate, but even the very leaves of each, distinguishing their six qualities, in order to call the farmers to account, respectively, when they make a defective delivery into the general stores. In the latter case, they are compelled to prove the death of the plants and even to account for the leaves missing when counted over again, under the penalty of being exposed to the rigor of the revenue laws.

[Burdensome and unprofitable inspection.] It cannot indeed be denied that by this means two important objects are attained, at one and the same time; the one, the gradual improvement of the tobacco, and the other, the greater difficulty of secreting the article; but, on the other hand, how great are the inconveniences incurred? Independent of the singularity and consequent oppression of a regulation of this kind, as well as its too great minuteness and complication, it is attended with very considerable expenses, and renders it necessary to keep on foot a whole army of guards and clerks, who tyrannize over and harass the people without any real motive for such great scrupulosity and profusion. I make this observation because I cannot help thinking that the same results might nearly be obtained, by adopting a more simple and better regulated system. I am not exactly aware of the one followed in the Island of Cuba, but as far as I understand the matter, it is simply reduced to this: the growers there merely present their bales to the inspectors, and if pronounced to be sound and good, the stipulated amount is paid over to them; but if the quality is bad, the whole is invariably burnt. Thus all sales detrimental to the public revenue are prevented, and I do not see why the same steps could not be taken in the Philippine Islands. It must not, however, be understood, that I presume to speak in a decisive tone on a subject so extremely delicate, and that requires great practical information, which, I readily acknowledge, I do not possess. I merely wish by means of these slight hints, to contribute to the commencement of a reform in abuses, and to promote the adoption of a plan that may have for basis the relief of the growers, and at the same time advance the prosperity of this part of the royal revenue.

[Coco and nipa wine monopoly.] The monopoly of coco and nipa, or palm-wine, is a branch of public revenue of sufficient magnitude to merit the second place among the resources rendered available to the expenditure of these Islands, converted into a monopoly some years ago. In like manner as the consumption of tobacco, it has experienced several changes in its plan of administration, this being at one time carried on, for account of the king, at others, by the privilege being let out at auction; till at length the Board of Control, convinced of the great profit gained by the contractors, resolved at once to take the direction of this departure under their own charge, and make arrangement for its better administration. Having with this view established general deposits and licensed houses for the sale of native wine, with proper superintending clerks they soon began to reap the fruits of so judicious a determination. In 1780, the privilege of selling the coco and nipa wine was farmed out, to the highest bidder, for no more than $45,200 and subsequently the increase has been so great, owing to the improvements adopted, that at present net proceeds equal to $200,000 on an average may be relied upon. In proof of this, the proceeds of this branch, in the year 1809, may be quoted, when the total balances received at the Treasury, after all expenses had been paid, amounted to $221,426, in the following manner:

Administration of Manila and district $201,250 Administration of La Pampanga and district 12,294 Administration of Pangasinan and district 7,882 —— $221,426

The prime cost and other expenses that year amounted to no more than $168,557 by which means, on the whole operation, a net profit of thirteen and one-half per cent. resulted in favor of the treasury.

[Wine monopoly district.] The monopoly of native wine comprehends the whole of the Island of Luzon, excepting the Provinces of Cagayan, Zambales, Nueva Ecija, Camarines and Albay, and is under the direction of three administrators, who act independently of each other in their respective districts, and have at their disposal a competent number of guards. These administrators receive in the licensed establishments the coco and nipa wines, at prices stipulated by the growers. That of the coco is paid for at the rate of two dollars per jar, containing twenty gantas, equal to twelve arrobas, seven azumbres and half a cuartillo, Castilian measure, and at fourteen reals in the places nearest the depots. The nipa wine is laid at six and one-half reals the jar, indistinctly; prices which, although extremely low, are still considered advantageous by the Filipinos themselves, more particularly when it is besides understood, that, from the circumstance of their being growers of this article, they are exempted from military service, as well as several other taxes and public charges.

[Coco-wine.] The coco-wine is a weak spirit, obtained in the following manner: The tree that produces this fruit is crowned by an assemblage of large flowers or corollas, from the center or calix of which issues a fleshy stem, filled with juice. The Indian cuts the extremity of this stem, and inclining the remainder in a lateral manner, introduces it into a large hollow tube which remains suspended, and is found full of sweet and sticky liquor, which the tree in this manner yields twice in every twenty-four hours. ["Tuba".] This liquid, called tuba, in the language of the country, is allowed to ferment for eight days in a large vessel, and afterwards distilled by the Indians in their uncouth stills, which are no other than large boilers, with a head made of lead or tin, rendered tight by means of clay, and with a pipe frequently made out of a simple cane, which conveys the spirit to the receiving vessels, without passing, like the serpentine tube used in ordinary stills, through the cooling vats, which so greatly tends to correct the vices of a too quick evaporation. The tuba, obtained in level and hot situations, is much more spirituous than that produced in cold and shady places. In the first, six jars of juice are sufficient to yield one of spirit, and in the latter, as many as eight are requisite; a much greater number, however, would be wanted to rectify this spirit so as to render it equal to what is usually known by Hollands proof. I am not positively certain what degree of strength the coco-brandy, or as it is usually called coco-wine, possesses, but it is evidently inferior to the weakest made in Spain from the juice of the grape. The only circumstance required for it to be approved of, and received into the monopoly-stores, is its being easily ignited by the application of a lighted candle.

[Nipa brandy.] The nipa is a small tree of the class of palms, which grows in a very bushy form, and multiplies and prospers greatly on the margins of rivers and watery tracts of land. The tuba, or juice, is extracted from the tree whilst in its flowering state, in the same way as that of the coco, and afterwards distilled by a similar process; but it is more spirituous, from six to six and a half jars being sufficient to yield one of wine. The great difference remarked in the prices of these two species of liquor, arises out of the great number of uses to which the fruit of the cocal or coco tree is applicable, and the increase of expense and labor requisite to obtain the juice, owing to the great height of the plant, and the frequent dangers to which the caritones, or gatherers, are exposed in passing from one tree to another, which they do by sliding along a simple cane (bamboo).

[Little drunkenness.] The impost on, or rather monopoly of, native wine, is in itself little burdensome to the community, as it only falls on the lower and most dissipated orders in society, and for this reason it is not susceptible of the same increase as that of tobacco, of which the use is more general, and now become an object of the first necessity. The native of the Philippine Islands is, by nature, so sober, that the spectacle of a drunken man is seldom noticed in the streets; in the capital, where the most corrupt classes of them reside, it is admirable to see the general abstinence from a vice that degrades the human species. The consumption of the coco and nipa wine is, nevertheless, considerable, for it is used in all their festivities, cock-fights, games, marriages, etc. Accordingly if it is desired to augment the annual sale of these liquors, no way could be more efficient than to increase the number of their festive meetings, and seek pretexts to encourage public diversions, so long as these do not go contrary to the well-regulated order of society, and conflict with the duties of those who are intrusted with its superintendence.

[Extension of monopoly urged.] I am still of opinion, however, that, without resting the prosperity of this branch of the public revenue on principles possessed of so immoral a tendency, it might be rendered more productive to the treasury, if the monopoly could be introduced into the other districts adapted to its establishment. By this I mean to say that, as hitherto the monopoly has been partial, and enforced more in the way of a trial than in a general and permanent manner, much remains to be done, and consequently great scope is left for improvement in this department of the public revenue. This most assuredly may be attained, if all the local circumstances and impediments, more or less superable, which the matter itself presents, are only taken into due account, and proper exertions made to study and discover the various indirect means of increasing the total mass of contributions, by applying a system more productive and analogous to the nature of the Philippine Islands. With regard to the revenue of the two particular articles above treated on, I merely wish to make it understood that, far from introducing by means of the monopoly, a new vice into the provinces in which I recommend its establishment, it would rather act, in a certain degree at least, as a corrective to pre-existing evils, and the government would derive advantages from an article of luxury, by subjecting its consumption to the same shackles under which it stands in the northern provinces, where its administration is established and carried on for account of the royal treasury.

[Former customs usage.] In former times, when only vessels belonging to the Asiatic nations visited the port of Manila, with effects from the coast of Coromandel, or the China junks, and now and then a Spanish vessel coming from or going to the Island of Java, with spices for account of Philippine merchants, the receipt of duties was left in charge of a single royal officer, and the valuations of merchandise made by him, in concert with two merchants named by the government; but with the knowledge and assistance of the king's attorney-general. The modifications and changes which have subsequently taken place in this department have, however, been frequent, as is evidently shown by the historical extract from the proceedings instituted before the Council of the Indies, by the merchants of Seville and Cadiz, in opposition to those of the Philippine Islands, printed in Madrid, 1736, in folio, by order of the said council; but as it does not enter into my views to speak of times so remote, I shall confine my remarks to this branch considered under its present form.

[Custom house.] In conformity to royal orders of March 15 and May 5, 1786, the Royal Custom House of Manila was definitively organized on its new plan; and from 1788, was placed under the immediate charge of an administrator-general, a controller, a treasurer, aided by a competent number of guards, inspectors, etc., and in every respect regulated on the plan established in the other custom houses. The freedom of the port being granted to foreign nations, a privilege before enjoyed only by those purely Asiatic, and a new line of trade commenced by the company, the competition in merchandise soon began to increase, as well as the revenue arising therefrom, in such manner that, although the exportation of goods was limited to the cargo of the Acapulco ship, of which the duties are not payable till her arrival there; notwithstanding also the property imported by the company from China and India, and destined for their own shipments, was exempt from duties, and above all, the continual interruptions experienced by the maritime commerce of the Islands within the last fifteen or twenty years, the net proceeds of the custom house, from the period above mentioned of its establishment, till the close of 1809, have not been less than from $138,000 to $140,000, on an average, independent of the amount of the king's fifth on the gold of the country, which is collected by the same administrator, in consequence of its being trivial; as well as the two per cent. belonging to the Board of Trade, and by them collected under that title, and afterwards separately applied to the average-fund and which usually may be estimated from $20,000 to $25,000.

The general duties now levied in the custom house, are the following:

[Port charges and duties.] Six per cent. almojarisfago is on all kinds of merchandise imported in foreign bottoms, under a valuation made by the surveyors, in conformity to the respective prices of the market at the time on importation; it usually is regulated by an increase of 50% on the prime cost of India goods, and of 33 1/3% on those from China. This duty may be considered as, in fact, equal to nine per cent on the former, and eight on the latter.

Six per cent, or the same duty, on all foreign goods, although imported in national bottoms.

Three per cent on Spanish goods, imported under the national flag, equal, according to the above estimate to 4 and 4 1/2%.

Two per cent Board of Trade duty, indistinctly on all foreign property, equivalent to 2 1/2 or 3%.

Twenty-five per cent anchorage dues, levied on the total amount of the almojarisfago duty.

An additional of two and one-half per cent, a new and temporary duty, called subvencion, appropiated to the payment of the loan made to the king by the Cadiz Board of Trade, and leviable on all kinds of imported goods, and, of course, equal, according to the usual mode of valuation, to about three per cent.

Three per cent on the exportation of coined silver and gold of the country, in dust and, ingots.

An additional or duty of subvencion, or temporary duty on the above, equal to one-half per cent.

One and a half per cent under the same rate, on all kinds of goods, and equal to two or two and one half per cent.

One and one-half per cent on the amount of the cargo of the Acapulco ship, on leaving the port of Manila, equal to 3/4% on the real prime cost.

[Slight concession to the Company.] The company are considered in the same light as the rest of the merchants, in the graduation and payment of duties, on such goods as they sell out of their own stores for local consumption, to the Company, with the exemption only of the Board of Trade rate of 2% and 3%, on the exportation of silver, according to a special privilege, and in conformity to the 61st Article of the new royal decree of 1803.

Besides the duties above enumerated, there is another trifling one established for local purposes of peso merchante, being a rate for the use of the king's scales, levied according to an extremely equitable tariff, on certain articles only of solid weight, such as iron, copper, etc. The raw materials as well as all kinds of manufactured articles, belonging to the Islands, are exempt from duties on their entry in the port and river of Manila; but some of the first are subject to the most unjust of all exactions, that is, to an arbitrary tax and to the obligation of being retailed out on board the vessels in which they have been brought down, and deliverable only to persons bearing a written order, signed by the sitting members of the municipal corporation. Among this class of articles may be mentioned the coco of Cebu and the wax and oil of the Bisayas, which are rated as objects of the first necessity.

[Undervaluation of galleon goods.] With regard to the respective duties on the cargo annually dispatched by the merchants of Manila to New Spain, the practice of galleon is tolerably well regulated. An extreme latitude is given to the moderate rates at which it is ordered to value the goods contained in the manifest, by which means these are frequently put down at only one-half of their original prime cost; the commission to frame the scale of valuations which is to be in force for five years, after which time it is renewed, being left to three merchants, and made subject to the revision of the king's attorney-general (fiscal) and the approbation of the governor; consequently, such being the nature of the tariff on which these operations are founded, the 33 1/3% to which the royal duties amount on the $500,000 stipulated in the permit, does not, in fact, affect the shipper beyond the rate of 15 per cent, in consequence of the great difference between the prime cost and valuation of the articles corresponding to the permit; or, what is the same thing, between the $500,000 nominal value, and $1,100,000 or $1,200,000, the real amount of the cargo in question. The most remarkable circumstance, however, is, that the officers of the revenue in Acapulco collect the above-mentioned 33 1/3% in absolute conformity to the Manila valuation, and not according to the value of the goods in America, and without any other formality than a comparison of the cargo with the ship's papers. In honor of truth, it ought to be further observed that, although the Manila merchant by this means seeks to exempt himself from the part of the enormous duties with which it has been attempted to paralyze the only commercial intercourse he carries on with New Spain, in every other respect connected with this operation, he acts in a sufficiently legal manner, and if at their return those vessels have been in the habit of bringing back near a million of dollars in a smuggled way, it must be acknowledged that it is the harshness of the law which compels the merchant to become a smuggler; for according to the strange regulation by which he is thwarted in the returns representing the proceeds of his outward operation, he must either bring the money to the Philippine Islands without having it declared on the ship's papers, or be obliged to leave the greatest part of it in the hands of others, subject to such contingencies as happen in trade. As long, therefore, as the present limitations subsist, which only authorize returns equal to double the value of the outward-bound cargo, this species of contraband will inevitably continue. The governors also, actuated by the principles of reason and natural justice, will, as they have hitherto done, wink at the infraction of the fiscal laws; a forbearance, in fact, indirectly beneficial to them, inasmuch as it eventually contributes to the general improvement of the colony. Indeed, without this species of judicious condescension, trade would soon stand still for the want of the necessary funds to carry it on.

[Unbusinesslike custom ways.] .... It will readily be acknowledged that, in like manner as the good organization of custom houses is favorable to the progress of general commerce, so nothing is more injurious to its growth and the enterprise of merchants, than any uncertainty or arbitrary conduct in the levying of duties to be paid by them. This arises out of the circumstance of every merchant, entering on a new speculation, being anxious to have, as the principal ground work of his combinations, a perfect knowledge of the exact amount of his disbursements, in order to be enabled to calculate the final result with some degree of certainty. Considered in this point of view, the system adopted in the Islands is certainly deplorable, since it must be acknowledged that the principles and common rules of all other commercial countries, are there unknown. For example; this year a cargo arrives from China or Bengal, and the captain turns in his manifest. The custom-house surveyors then commence the valuation of the goods of which his cargo is composed: I say they commence, because it is a common thing for them not to have finished the estimate of the scale and amount of corresponding duties, till the expiration of two, four, and not unfrequently six months. The rule they affect to follow, in this valuation, is that of the prices current in the market, and in order to ascertain what these are, they are seen going round inquiring in the shops of the Sangleys (Chinese), till at length, finding it useless to go in search of correct and concurrent data, in a place where there are neither brokers nor public auctions, they are forced to determine in an arbitrary manner, and as the adage goes, always take good care to see their employers on the right side of the hedge. The grand work being ended, with all this form and prolixity, the sentence of the surveyors is irrevocable. The bondsman of the captain, who, in the meanwhile, has usually sold his cargo and departed with a fresh one for another destination, pays in the amount of the duties, thus regulated by law.

[Variations in valuations.] The practical defects and injurious consequences of such a system as this, it would be unnecessary to particularize. It would, however, be less intolerable, if, once put in force, it could serve the merchant as a guide in the valuations of his property for a determined number of successive years. What, however, renders this assessment more prejudicial, is its instability and uncertainty, and the repetition of the same operation I have just described every year, and with every cargo that arrives; but under distinct valuations, according to the reports or humor of the day. Besides these great defects and irregularity, the Philippine custom house observes the singular practice of not allowing the temporary landing of goods entered in transitu and for re-exportation, as is done on the bonding system in all countries where exertions are made by those in authority for the extension and improvement of commerce in every possible way. Of course, much less will they consent to the drawback or return of any part of the duties on goods entered outwards, even though they are still on board the very vessels in which they originally came shipped. Beyond all doubt, the wrongly understood severity of such a system, has, and will, continue to prevent many vessels from frequenting the port of Manila, and trying the market, unable to rely on the same liberal treatment they can meet with in other places.

[The areca-nut.] The bonga, or areca-nut, is the fruit of a very high palm-tree, not unlike the one that bears the date, and the nuts, similar to the latter, hang in great clusters from below the protuberance of the leaves or branches. Its figure and size resemble a common nut, but solid, like the nutmeg. Divided into small pieces, it is placed in the center of a small ball made of the tender leaves of the buyo or betel pepper, lightly covered with slacked lime, and this composition constitutes the celebrated betel of Asia, or, as it is here called, the buyo, the latter differing from that used in India, inasmuch only as it contains cardamomom.

[Buyo monopoly unsatisfactory.] The government, anxious to derive advantage in aid and support of the colony, from the great use the inhabitants make of the buyo, many years ago determined to establish the sale of the bonga, its principal ingredient, into a monopoly, either by hiring the privilege out, or placing it under a plan of administration, in the form in which it now stands. Both schemes have been tried, but neither way has this branch been made to yield more than $30,000; indeed the annual proceeds usually have not exceeded $25,000. In 1809, the total amount of sales was $48,610, and deducting from this sum the prime cost and expenses of administration, the net profit in favor of the treasury was equal to no more than $27,078 or upwards of 125 1/2%. In 1780, the privilege of selling the bonga was let out at public auction for the sum of $15,765 and this, compared with the present proceeds, clearly shows that, although the increase has not advanced equally with the other branches of the revenue, it is far from having declined. It must nevertheless be confessed, that on the present footing on which it stands, the smallness of the proceeds is not worth the trouble required in the collection, and even if the amount were still greater, it could never serve as an excuse for the oppression and violence to which this monopoly frequently gives rise.

[Hardships on areca-nut planters.] As the trees producing the bonga are not confined to any particular grounds, and indiscriminately grow in all, the plan has been adopted of compelling the Filipinos to gather and bring in the fruit, raised on their lands, to the depot nearest the district in which they reside. There they are paid from two, two and one-half, three and three and one-half reals per thousand, according to the distance from which they come: and, in order to prevent frauds, the surveyors belonging to the revenue go out, at certain times of the year, to examine the bonga plantations, and the trees being counted, they estimate the fruit, that is, oblige the proprietor to undertake to deliver in two hundred nuts for each bearing tree, whether or not, hurricanes deteriorate or destroy the produce, or thieves plunder the plantations, as very frequently happens. In case deficiencies are proved against him, he is compelled to pay for them in money, at the rate of twenty-five reals per thousand, the price at which the king sells them in the monopoly-stores. Besides, the precise condition of delivering in two hundred bonga nuts, according to the stipulations imposed upon him, presupposes the previous exclusion of all the injured or green ones; and although the ordinary trees usually yield as many as three hundred nuts each, great numbers are nevertheless spoiled. If, to the adverse accidents arising out of the storms and robberies, we add the effects of the whims or ill-humor of the receivers, it is not easy to imagine to what a length the injuries extend which befall the man who has the folly or misfortune to become a planter of this article.

[Folly of monopoly plan.] On the other hand, as in the conveyances from the minor to the larger depots, frauds are frequently committed, and the heaping together of many millions of nuts inevitably produces the fermentation and rapid putrefaction of a great number of them, it consequently follows that the waste must be immense; or if it is determined to sell all the stock laid in, without any distinction in quality and price, the public must be very badly served and displeased, as in fact too often happens. Since, therefore, the habit of using the buyo is still more prevailing than that of tobacco, when suitable supplies cannot be had in the monopoly stores, the consumer naturally resorts to the contraband channels, although he encounters some risk, and expends more money. It is also very natural that the desire of gain should thus lead on and daily expose a number of needy persons, anxious by this means to support and relieve the wants of their families. Returning, however, to what more immediately concerns the grower, I do not know that the oppressive genius of fiscal laws has, in any country of the globe, invented one more refinedly tyrannic, than to condemn a man, to a certain degree at least, as has hitherto been the case, to the punishment of Tantalus; for the law forbids the Filipino to touch the fruit of the tree planted with his own hands, and which hangs in tempting and luxuriant abundance round his humble dwelling.

[Its modification desirable.] It would be easy for me to enumerate many other inconveniences attending this branch of public revenue, on the footing on which it now stands, if what has already been said did not suffice to point out the necessity of changing the system, as those in authority are anxious that the treasury should gain more, and the king's subjects suffer less. The strong prejudice entertained against this source of revenue, the inconsiderable sum it produces, and the complicated form of its organization, have in reality been sufficient motives to induce many to become strenous advocates for the total abolition of the monopoly. I do not, however, on this account see any reasons for altogether depriving the government of a productive resource, as this might soon be rendered, if it was placed under regulations less odious and more simple in themselves. I nevertheless agree, that the perfect monopoly of the areca fruit, or bonga, is impracticable, till the trees, indiscriminately planted, are cut down, and, in the same way as the tobacco plantations, fresh and definite grounds are laid out for its cultivation, on account of the revenue. I am further aware that this measure is less practicable than the first; for, independent of all the other obstacles, it would be necessary to wait till the new plantation yielded fruit, and also that the public should consent to refrain from masticating buyo in the meanwhile, a pretension as mad as it would be to require that the eating of salt should be dispensed with for a given number of years. But what difficulty would there be, for example, in the proprietors paying so much a year for each bonga tree to the district magistrate, the governor of the nearest town, or the cabeza de Barangay, or chiefs of the clans into which the natives are divided, in the same manner as the Filipino pays his tribute? [Tree-tax preferable.] The only one I anticipate is that of fixing the amount in such way that, at the same time this resource is made to produce an increased income of some moment, it may act as a moderate tax on an indefinite property, the amount of which, augmented in the same price, may be reimbursed to the proprietor by the great body of consumers. It is not in fact easy to foresee or estimate, by any means of approximation, the alteration in the current price of the bonga, that would result from the indefinite freedom of its cultivation and sale, especially during the first years. Although, for this reason, it would be impossible to ascertain what proportion the impost on the tree would then bear with regard to the value of the fruit, the error that might accrue would be of little moment, as long as precautions were taken to adopt a very low rate of comparison, and a proportionably equitable one as the basis of taxation. Supposing then that the price of the bonga should decline from twenty-five reals, at which it is now sold in the monopoly stores, to fifteen reals per thousand, in the general market, and a tax of one-fourth real should be laid on each tree valued at two hundred bonga nuts, it is clear that this would be equal to no more than 8 1/2%; or, what is the same, the tax would be in the proportion one to twelve with the proceeds of each tree, and the more the value of the fruit was raised, the more would the rate of contribution diminish. It ought at the same time to be observed that, under the above estimate, that is, supposing the price of the article to remain at fifteen reals, the 8 1/2% at which rate the tax is regulated, would not perhaps exceed five or six per cent on a more minute calculation; in the first place, because at the time of making out the returns of the trees, [Exception of immature and aged trees.] those only ought to be set down which are in their full vigor, excluding such as through the want or excess of age only yield a small proportion of fruit; and in the second, because in the numbers registered, the trees would only be rated at two hundred although it is well known they usually yield three hundred, in order by this means the better to avoid all motives of complaint. In this point of view, and by adopting similar rules of probability, it seems to me that the government would not risk much by an attempt to change the present system into a tax levied on the tree itself, on a plane similar to the one above proposed; more particularly by doing it in a temporary manner, and rendering it completely subservient to the corrections subsequent experience might suggest in this particular.

[Difficulty of estimating probable revenue.] The difficulty being, in this manner, overcome, with regard to the prudent determination of the rate at which the proprietor of the bonga plantations ought to contribute, let us now proceed to estimate, by approximation, the annual sum that would thus be obtained. As, however, this operation is unfortunately complicated, and in great measure depends on the previous knowledge of the total number of trees liable to the tax proposed, details with which we are at not present prepared, it is impossible to come at any very accurate results. All that can be done is to endeavor to demonstrate, in general terms, the great increase the revenue would experience by the adoption of the new plan, and the real advantage resulting from it to the contributors themselves, all which may be easily deduced from the following calculation.

Let us, in the first instance, suppose that the consumers of buyo, in the whole of the Islands, do not exceed one million of persons, and that each one makes use of three bongas per day, this consumption, at the end of the year, would then amount to 1,095,000,000 nuts. We will next divide this sum by two hundred, at which the product of each tree, one with another, is rated, and the result will be 5,475,000 trees. [Greater, however, than at present.] This number being taxed at the rate of one-fourth real, would leave the sum of $171,093.75 and deducting therefrom the $25,000 yielded by this branch under its present establishment, together with $5,132 equal to three per cent paid to the district magistrates for the charges of collection, we should still have an annual increase in favor of the, treasury equal to $140,961.75.

It might perhaps be objected that, in this case, the proprietor, instead of receiving, as before two and one-half reals for every thousand bongas, would have to disburse one and one-fourth reals in the mere act of paying one-fourth real for each tree; a circumstance which, at first sight, seems to produce a difference not of one and one-fourth, but of three and one-fourth reals per thousand against him; though in reality far from this being the case, if we take into consideration the deficiencies the sworn receiver usually lays to his charge, the fruit he rejects, owing to its being green or rotten, and the many and expensive grievances he is exposed to in his capacity of grower; it will be seen that his disbursements under these heads frequently exceed the amount he in fact has to receive. [Tax only a surcharge ultimately paid by consumer.] If, in addition to this, we bear in mind that, on condition of seeing himself free from guards and a variety of insupportable restrictions, constituting the very essence of a monopoly, he would in all probability gladly pay much more than the tax in question, all the doubts arising on this point will entirely disappear. Finally, considered in its true light, we shall not find in the measure above described anything more than a very trifling discount required of the proprietor from the price at which he sells his bonga, and which, as already noticed, ultimately falls on the consumer alone.

[Estimate conservative.] The moderate estimate I have just formed ought to inspire the more confidence from its being well known that the use of the buyo is general among the inhabitants of these Islands. The calculation, as it now stands, rests only on one million consumers, for each of whom I have only put down three bongas per day, whereas it is customary to use much more; nor have I taken into account the infinite number of nuts wasted after being converted into the buyo, a fact equally well known. Indeed, as the object proposed was no other than to prove the main part of my assertions, and I trust this is satisfactorily done, I have not deemed it necessary to include in the above calculation a greater number of minute circumstances, nor attempt to deduce more favorable results, which, with the scope before me, I was most assuredly warranted in doing.

[Advantages.] In a word, from the concurrence of the facts and reasons above adduced, the following propositions may, without any difficulty, be laid down. First, that the increase of revenue produced by the reform in question, would in all probability exceed $150,000 per annum; secondly, that the Filipinos would soon comprehend, and gladly consent to a change of this kind in the mode of contributing of which the advantages would be apparent; thirdly, that the persons employed in the old establishment, might, with greater public utility, be applied to other purposes; and lastly, that the civil magistrates would not be harassed with so many strifes and lawsuits, and so many melancholy victims of the monopoly, and its officers would cease to drag a wretched existence in the prisons and places of hard labor in these Islands.

[Cockpit licenses.] The cock-pit branch of the revenue is hired out by the government, and the license is separately set up at auction for the respective provinces. Its nature and regulations are so well known that they do not require a particular description, the general obligations of the contractors being the same as those in New Spain. Perhaps the only difference observed in this public exhibition in the Philippine Islands consists in its greater simplicity, owing to its being frequented only by the natives, the whites who are present at this kind of diversion being very few, or indeed none.

[Inconsiderable income.] The cock-pits are open two days in the week, and the lessees of them receive half a real from every person who enters, besides the extra price they charge those who occupy the best seats, the owners of the fighting cocks, for the spurs, stalls for the sale of buyo, refreshments, etc. Notwithstanding all this, and although cock-fighting is so general and favorite an amusement among these people (the rooster may justly be considered as the distinctive emblem of the Filipino) the annual proceeds of this branch are inconsiderable; although it must be acknowledged that it has greatly increased since the year 1780, when it appears the license was let at auction for only about $14,000 owing, no doubt, to the exclusive privilege of the contractors not having been extended to the provinces, as was afterwards gradually done.

[Provincial cockpit revenue.] The total sum paid to the government by the renters of this branch, according to the auction returns in 1810, amounted to $40,141 in the following order for the provinces:

Tondo $18,501 Cavite 2,225 La Laguna 2,005 Pampanga 3,000 Bulacan 6,900 Batangas 2,000 Pangasinan 1,200 Bataan 1,050 Iloilo 1,600 Ilocos 600 Tayabas 400 Cebu 360 Albay 300 Total $40,141

[Possibilities of increase.] The causes, to which the increase that has taken place within the last twenty-five or thirty years is chiefly to be attributed, have already been pointed out, and for this reason it would appear that, by adopting the same plan with regard to the fourteen remaining provinces, of which this captaincy-general is composed, hitherto free from the imposition of this tax, an augmentation might be expected, proportionate to the population, their circumstances, and the greater or lesser taste for cock-fights prevailing among their respective inhabitants. At the commencement, no doubt, the rentals would be low, and, of course, the prices at which the licenses were let out, would be equally so; but the experience and profits derivable from this kind of enterprises would not fail soon to excite the competition of contractors, and in this way add to the revenue of the government. This is so obvious that I cannot help suspecting attempts have, at some period or other, been made to introduce the establishment of this privilege, in some of the provinces alluded to; at the same time I am persuaded that, owing to the affair not having been viewed in its proper light, seeking on the contrary to obtain an immediate and disproportionate result, the authorities have been too soon disheartened and given up the project without a fair trial. All towns and districts murmur, and, at first object, to taxes, however light they may be; but, at length, if they be not excessive, the people become reconciled to them. The one here proposed is neither of this character, nor can it be deemed odious on account of its novelty. The natives are well aware that their brethren in the other provinces are subject to it, and that in this nothing more is done than rendering the system uniform. I, therefore, see no reason why the establishment of this branch of revenue should not be extended to all the points of the Islands. At the commencement, let it produce what it may, since constancy and time will bring things to the same general level.

[Indian tributes.] The too great condescension and mistaken humanity of the government on the one hand, and the fraud and selfishness of the provincial sub-delegates or collectors, on the other, have concurred to change a contribution, the most simple, into one of the most complicated branches of public administration. The first cause has been owing to a too general acquiescence to receive the amount of tributes in the produce peculiar to each province, instead of money; and the second, because as the above officers are the persons intrusted with the collection, whenever the sale has held out to them any advantage, they have been in the habit of appropriating the several articles to themselves, without allowing any benefit to the treasury. If the prospective sales of the produce appear unfavorable, it is then forwarded on to the king's store in Manila, surcharged with freights, exposed to many risks, and the value greatly diminished by waste and many other causes. No order or regularity being thus observed in this respect, and the sale of the produce transmitted to the king's stores being regulated by the greater or lesser abundance in the general market, and a considerable stock besides left remaining, from one year to another, and eventually spoiled, it is impossible to form any exact estimate of this branch. If to these complicated matters we add the radical vices arising out of the infidelity of the heads of clans (cabezas de barangay), the difficulty of ascertaining the defects of the returns made out by them, the variations annually occurring in the number of those exempted either through age or other legal motives, and above all, the frequently inevitable tardiness with which the district magistrates send in their respective accounts, it will be readily acknowledged, that no department requires more zeal in its administration, and no one is more susceptible of all kinds of frauds, or attended with more difficulties.

[A conservative estimate.] In this state of uncertainty, with regard to this particular branch, I have guided myself by the last general return of tributes, made out in the accountant-general's office, on the best and most recent data, and calculating indistinctly the whole value in money, I have deemed it proper afterwards to make a moderate deduction, on account of the differences above stated, and arising out of the collection of the tributes in kind, the expenses of conveyance, shipwrecks, averages, and other causes already enumerated.

[Fixed charges.] In conformity to this calculation, the total proceeds of this branch of revenue amount to $505,215 from which sum are deducted, in the primitive stages of the accounts, the amount of ecclesiastical stipends, the pay of the troops under the immediate orders of the chief district magistrates in their quality of war-captains, together with all other extraordinary expenses incurred in the provinces by orders of the government, the remainder being afterwards forwarded to the king's treasury. It ought, however, to be observed, that the above aggregated sum is more or less liable to deficiencies, according to the greater or lesser degree of punctuality on the part of the sub-collectors in making up accounts, and the solidity of their respective sureties; the failure of this kind experienced by the revenue being so frequent, that, according to the returns of the accountant-general, those which occurred between the years 1762 and 1809, were no less than $215,765 notwithstanding the great precautions at all times taken to prevent such considerable injuries, by every means compatible with the precarious tenure of property possessed by both principals and sureties in this country. All the above circumstances being therefore taken into due consideration, and the ordinary and extraordinary discounts made from the total amount of tributes, the real sum remaining, or the net annual proceeds of the above branch, have usually not been rated at more than $190,000 and $200,000; a sum respectively extremely small, and which possibly might be doubled, without the necessity of recurring to any other measure than a standing order for the collecting of the tributes in money, as by this means the variety of expenses and complications above enumerated, would be avoided, and the king's revenue no longer exposed to any other deficiencies than those arising out of the insolvency of the sub-collectors and their sureties, or casual risks, and the trifling charges paid for the conveyance of the money. If in opposition to this it should be alleged that it would be advisable to except some of the provinces from this general rule, owing to the advantages the government might derive from certain tributes being paid in kind, I do not hesitate to answer that I see no reason whatever why this should be done, because, if, for example, any quality of rigging or sail cloth is annually required, it would be easy to obtain it either by early contracts, or by laying in the articles at the current market price. Indeed, all supplies which do not rest on this footing, would be to defraud the natives of the fruits of his industry, and in the final result this would be the same as requiring of him double or triple tribute, contrary to the spirit of the law, which unfortunately is too frequently the case under the existing system.

[Preferability of tribute in money.] Considering this affair in another point of view, it would be easy for me to demonstrate, if it were necessary, the mistaken idea that the native is benefited by receiving in kind the amount of the tribute he has to pay, at the low prices marked in the tariff used as a standard, by showing the extortions and brokerage, if I may so term it, to which the practice gives rise on the part of the district collectors. It will, however, suffice to call the attention of my readers to the smallness of the sum constituting the ordinary tribute, when reduced to money, in order for them to be convinced that it would be superfluous, as well as hazardous, to attempt to point out how this branch might be rendered more productive to the state and at the same time less burdensome to the contributors, more particularly when the rate assessed does not exceed ten reals per year, a sum so small, that generally speaking, no family can be found unable to hoard it up, if they have any inclination so to do. The prevailing error, however, in this respect, I am confident arises out of a principle very different from the one to which it is usually attributed. The tributary native is, in fact, disposed to pay the quota assigned to him into the hands of the chief of his clan, in money, in preference to kind; because, independent of the small value at which the articles in kind are rated in the tariff, he is then exposed to no expenses, as he now is for the conveyance of his produce and effects; nor is he liable to so many accidents. But as the chief of each clan has to deliver in his forty or fifty tributes to the head magistrate, who is answerable for those of the whole province, it is natural for him to endeavor to make his corresponding payments in some equivalent affording him a profit; at the same time the provincial magistrate, speculating on a larger scale, on the produce arising out of his jurisdiction, seeks to obtain from the government a profitable commutation in kind for that which the original contributor would have preferred paying in money. In order the better to attain his purpose, he asserts, as a pretext, the impossibility of collecting in the tribute under another form, alleging, moreover, the relief the native derives from this mode, whereas, if only duly examined, such a pretence is founded on the avarice, rather than the humanity of the magistrate.

Leaving to one side the defects attributable to the present mode of collection, and considering the tribute as it is in itself, the attentive observer must confess, that in no part of our Indies is this more moderate; and, indeed, it is evident that the laws generally relating to the natives of these Islands seem to distinguish them with a decided predilection above those of the various sections of America.

[Items in tribute.] The tribute in its origin was only eight reals per family; but the necessity of providing for the increased expenses of the government gave rise to this rate being afterwards raised to ten. The Sangley mestizos pay double tribute, and the Sangleys contribute at the rate of $6 per head. Besides this, all pay a yearly sum, applicable to the funds belonging to the community, and the above two casts pay three reals more, as a church rate, and under the name of the Sanctuary, the whole being in the following form:

Entire Native Tribute Tribute of Mestizos Sangleys

8 Reals, original tribute 16 Reals. $6 each. 1 1/2 Reals for expenses of troops 3 1/2 Reals to tithes 1 10 Reals, amount of tribute 20 Reals. $6.75 1 Real, community funds 1 3 Reals, sanctuary rate 3 14 Reals, total annual disbursement. 24 Reals. $6.75

The males commence paying tribute at twenty years of age and the females at twenty-five, if before they have not entered the matrimonial state, and in both the obligation ceases at the age of sixty. The chiefs of clans, or cabezas de barangay and their eldest sons, or in default of children, the person adopted in their stead, that is, an entire tribute and a half, are exempt from this tax, as a remuneration for the trouble and responsibility they may have in collecting in the forty or fifty tributes, of which their respective clans are composed. Besides these there are various other classes of exempted persons, such as the soldiers who have served a certain number of years, those who have distinguished themselves in any particular manner in the improvement of industry or agriculture, and others who have received special certificates, on just and equitable grounds. In summing up the total number of exempted persons, on an average in the whole of the provinces, they will be found in the proportion of fifty to every thousand entire tributes.

[Chinese tax.] The head-tax of the Sangleys has usually been attended with so many difficulties in its collection, owing to the facilities with which they absent or secrete themselves, and the many stratagems this cunning and artful race employ to elude the vigilance of the commissioners, that the government has at length found itself compelled to let out this branch, as was done in 1809, when it was disposed of in the name of one of them for the moderate sum of $30,000; notwithstanding it is a generally received opinion, that the number of this description of Chinese, constantly residing in the Islands, is above 7,000, which, at the rate of $6 per head, would raise this proportion of the tax as high as $42,000.

[Community funds.] The Community funds belonging to each town, have, in conformity to the regulations under which they are administered, a special, or I might say, local application; but collected together into one stock, as is now the case, and directly administered by the government, they produce a more general utility. The head town of the province A, for example, requires to rebuild the public prison or town-hall, and its own private funds are not sufficient to defray the expenses of the work in question. In this case, therefore, the government gives orders for the other dependent towns to make up the deficiency by taking their proportions from their respective coffers, as all have an equal interest in the proposed object being carried into effect. The king's officers, in consequence thereof, draw the corresponding sums from these funds, the whole of which is under their immediate superintendence. And in order that the surplus of this stock may not stand still, but obtain every possible increase in a country where the premium for money is excessive, when let out at a maritime risk, it is ordered that some part shall be appropriated in this way, and on the same terms as those observed by the administrators of the charity funds belonging to the Misericordia (Charity) establishment, and the third order of St. Francis, which is another of the great advantages of assembling this class of property.

In consequence of this judicious regulation, and the success with which this measure has hitherto been attended, the Community fund has gone on increasing in such a way that, notwithstanding the sums drawn from it for the purpose of constructing causeways, bridges, and other municipal objects, at the commencement of 1810, the stock in hand amounted to no less than $200,000; and it is natural to suppose when the outstanding premiums due shall have been paid in, a considerable augmentation will take place. This branch, although not exactly comprehended in those which constitute the revenue of the government, has so obvious an analogy with that of tributes, that I have not deemed it any essential deviation from the order and method I have hitherto observed in this work, to introduce it in this place, as in itself it did not deserve to be classed under a distinct head.

[Tribute burdensome.] Notwithstanding the truth of what has been said with regard to the moderate rate of the tribute imposed on the native of the Philippine Islands, it would be extremely desirable if he could be altogether exonerated from a charge which he bears with great repugnance, by some other substitute being adopted, indirectly producing an equivalent compensation. In the first place, because the just motives of complaint would cease, caused not only by the tribute, but also the manner of its collection; and an end would then be put to those intrigues and extortions the district magistrates commit, under the title of zealous collectors of the king's revenue, and the power of a multitude of subaltern tyrants, comprehended under the denomination of chiefs of native clans (cabezas de barangay) would then also fall to the ground; a power which, if now employed for the purpose of oppressing and trampling on the liberties of inferiors, might some day or other be converted into an instrument dangerous and subversive of our preponderance in the country. In the second place, if, among all the civilized nations a head-tax (poll-tax) is in itself odious, it must incontestably be much more so among those whose unlettered state, far from allowing them to know that the social order requires a certain class of sacrifices for its better preservation, makes them attribute exactions of this kind to an abuse of superiority. Hence are they led to consider these restraints as the symbols of their own slavery and degradation, as in fact the natives in these Islands have ample reasons for doing, when the legal exemption of the whites is considered, without any other apparent reason than the difference in color. Independent of this, the substitute above alluded to would be extremely expedient, inasmuch as it would greatly simplify the plan of administration, the accountant's department would be freed from the most painful part of its labors, and the district magistrates and sub-collectors would not so frequently be entangled in their accounts, and exposed to expensive and interminable lawsuits, as now so often happens.

[Possible Revenue substitutes.] The difficulty, however, of finding out this compensation or substitute is a matter of some consideration. On the one hand, if it was attempted to distribute the proceeds arising out of the tributes on other branches, such as tobacco, native wine, bonga, and custom house, it would, at first sight, appear possible, through the medium of an almost invisible augmentation in the respective sale prices and in the king's duties, that this important object might easily be attained; but, on the other, it might be apprehended that the additional value put on the articles above-mentioned, would produce in their consumption a diminution equal to the difference in prices, in which cases no advantage would be gained. The practicability of the operation, in my opinion, depends on the proportion in which the means of obtaining the articles in question respectively stand with the probability of their being consumed. I will explain myself. If, for example, the annual stock of tobacco laid in should be insufficient to meet the wants of the consumers, as constantly occurs, it is clear that this article, when monopolized, will bear a small augmentation of price, not only without any inconvenience or risk, but with the moral certainty of obtaining a positive increase of revenue, the necessary effect of the total consumption of the tobacco laid in and sold. But as this does not happen with the branch of native wines, of which the stock usually exceeds the demand, and as the bonga also is not susceptible of this improvement, owing to the small place it occupies among the other resources of the revenue, no other means are left than to add to the duties of export on silver, and of import on foreign merchandise, a percentage equivalent to the deficiency not laid on tobacco, unless it should be deemed more advisable to levy a sumptuary contribution on coaches, horses and servants, and especially on all kinds of edifices and houses built of stone and mortar, situated both within and without the capital.

[Objection to tribute-paying.] However this may be, whatever the king loses in revenue by the abolition of the native tributes, no doubt, could be made up by an appeal to other ways and means. It is well-known that many of the Indian tribes refuse to become subjects of the crown and object to enter into general society on account of the odious idea they have formed of paying tribute; or, as they understand it, the obligation of giving something for nothing, notwithstanding those who voluntarily submit themselves to our laws, are exempt from tribute, and this charge falls only on their descendants. But of this they must either be ignorant, or they regret depriving their posterity of that independence in which they themselves have been brought up, and thus transmit to them slavery as an inheritance. As soon, therefore, as a general exemption of this kind, without distinction of casts, should be made public, the natives would quit their fastnesses and secluded places, and satisfied with the security offered to them, would be seen coming down to the plains in search of conveniences of civilized life, and all gradually would be reduced to Christianity. Hence the increase of productions and their consumption, as well as the extension of agriculture, industry and internal commerce. The diminution of smuggling tobacco would soon follow, progress would be made in the knowledge of the mines and natural riches of the country, and financially, greater facilities would present themselves in gradually carrying into effect its entire conquest and civilization.