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Changing the Rules of the Game (The India-Manila Trade: 1785–1809)1

  • Cheong Weng Eang

The establishment of the Royal Philippine Company by the Royal Charter of March 10th. 1785 promised the beginning of a new era in the history of the India-Manila trade. The concessions made by the Crown to the Company were many, and they were extended in the next two decades. The Company was intrinsically valuable as an organised agency with which trade could be conducted on a structurally modified line. Initially the Company provided a new axis of Spanish commercial operations in Asia between Manila and metropolitan Spain. This was in addition to the traditional Manila-Acapulco trade. From 1793 the Philippine Company also obtained the right of direct trade between Manila and Callao on the Peruvian coast, thus adding yet another axis to the trade of Manila. These concessions underlined and enhanced Manila's importance as an entrepot for all three lines of Spanish trade authorised in Asia. The opening of Manila in three stages by the decrees of 1785, 1787 and 1789 at the Company's insistence, further increased the entrepot stature of Manila. Thus from the viewpoint of the markets, the methods of trade and the volume of commerce, the potential of the trade from India was vastly increased, and improved.

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2 The capital ($15,000,000 or 120,000,000 reales) of the new Company was to be raised by the public sale of shares and the amalgamation of the Company of Havana, the Caracas Company, the Company of San Fernando of Seville, the Royal Guipuzcoa, and the Five Great Gremios of Madrid. The National Bank of St Carlos, and the King himself were the principal shareholders.

3 For further reading on the Galleon trade: Schurz, W.L.: The Manila Galleon (N.Y. 1959).

4 Egerton 518 ff. 78–80 Cedula signed by King and J. Galves, 15.7.1785.

5 FO 72/7 (Sec/Conf.). No. 6 Carmarthen to Liston, London-Spain 16.2.1786. Also see FO 72/2 R. Liston to Carmarthen Spain-London, No. 51, 29.7.1784; HMS 77/14, p. 317, E. Nepeian to Chairman of Court of Directors, EIC, 26.12.1785.

6 HMS 606 p. 447, Minutes of the Bengal Secret Committee, 26.1.1786 p. 433, “Notes on Manila” 6.2.1789.

7 CC 142 (1802–03) p. 14. Select to Wellesley, Canton-Calcutta, 31.10.1802; CC 167 (1809) p. 174 Select to Minto, Canton-Calcutta, 11.4.1809; Cheong, W.E.: Some Aspects of British Trade and Finance in Canton with Special Reference to the Role of Anglo-Spanish Trade in the Eastern Seas: 1784–1834 (Ph.D. Thesis, London 1962) p. 192 ff.

8 Quaison, S.D.: English Country Trade with the Philippines 1644–1765 (University of Philippines Press, 1966) passim; Cheong, W.E.: “An Anglo-Spanish-Portuguese Clandestine Trade between the Ports of British India and Manila, 1785–1790” in Philippine Historical Review Vol. 1 No. 1 (1965) pp. 8095.

9 In the ten years 1778–1787, Manilenos lost three of the galleons and two smaller vessels with cargoes totalling over $3·5million. There were not enough funds to lade the full permitted cargoes of the galleons, and the ferias held in Mexico for sale of the cargo of the ships had been ruinous. Filipinas 976 “Exposicion del Consulado de Manila” 8.7.1786; Filipinas 985 Royal Tribunal of Manila Consulado to King, Manila 8.7.1786; M. Orbaneja y Ortega (Consulado's representative in the Spanish Cortes) to King, Madrid 3.5.1787; M. Orbaneja y Ortega to King, Madrid, 16.5.1788.

10 Manila officials had their own salaries; they were also given shipping space on the galleons as citizens of the colony; by the second half of the 18th century, they also claimed space on the galleons as officials. Bribes and gifts had an important place in the income of the port regulators.

11 e.g. In 1789 the Manila Directors spent $1,940,020 but received in funds only $918,927; corresponding figures in 1790: $707,750 and $820,000; for 1791: $1,957,512 and $1,104,711.

12 The Madrid Directors described the contracts of the Manila Directors as “una cosa, a la verdad indiscreta y escandalose”. Filipinas 989 Madrid Directors to D. de Gardoqui, Madrid 11.11.1796; A British diplomat described the Manila Directors as “improperly selected as well as ignorant and rapacious …” FO 72/32 Commercial No. 4 R. Woodford to Grenville, 2.8.1796, Whitehall.

13 W.E. Cheong: “Canton and Manila in the 18th century: a study of Western and Oriental mercantilist instruments and controls of trade” in Studies in the Social History of China and South-East Asia (Cambridge UP. 1969).

14 The Royal Company was supposed to contribute substantially to the development of the Philippines by ploughing back 10% of its annual profits, and undertaking a large share in the tobacco monopoly. But the Company hardly came through a year in the black and the tobacco experiment had not at this stage acquired its subsequent fame and success. The Company also was given the right to import European goods, but abused it by subcontracting to other houses in India or Mauritius. The attempt to encourage the growth of local produce for export to Europe on Company ships were destroyed by the prohibitive rates of freight which the Company offered to the consigners.

15 HMS 77/14 p. 451. Agreement between the EIC and the Philippine Company, 10.12.1788; p. 503 ff. Board of Trade to Bengal (and Madras) Councils, 1.12.1789; p. 595 Lord Cornwallia to Court of Directors, 1.12.1789. HMS 606 p. 433 ff. “Notes on Manila”.

16 CC 84 (1786–1787) see notably consultations and letters, 5.1.1787 to 1787.

17 CC 142 (1802–1803) p. 4 Select to Lord Wellesley, Canton-Calcutta 31.10.1802; CC 167 (1809) p. 74 Select to Lord Minto, Macao-Calcutta 11.4.1809; CC 168 (1809–1810) p. 173 J. Lumsden and H. Colebrooke to Select. Calcutta-Canton 25.8.1809. CC 171 (1810) p. 22 Select to Court, Canton-London, 26.1.1810: CCL 10 (1811) No. 3 for 1811 Court to Select, London-Canton 11.1.1811.

18 In 1796 the Canton Committee borrowed $250,000 from the Spanish factor Julien Fuentes. On the other hand in 1802 Fuentes took a loan from the Canton Committee ($100,000), and in 1806 another loan was contracted by Francisco Mayo the New Spanish agent in Canton. CC 110 (1795–1796) p. 249, 29.4.1796; CC 139 (1802) P. 168 25.9.1802; CC 153 (1806) p. 216 13.11.1806.

19 The bond issued by the Canton Committee in 1796 was in fact redeemable by the Spaniards in Calcutta, and in 1802 the Spanish factors in Canton drew bills worth £300,000 for de la Trayata, their agent in India.

20 W.E. Cheong: Some Aspects of British Trade and Finance at Canton pp. 158 ff.

21 This Canton agency was set up with the Canton Committee's approval, and all three men were members of the Committee. It was designed to provide competition against other private agencies then being established in Canton against the Company's monopoly. Lane & Fitzhugh was eventually set up in London between 1788 and 1796.

22 “Finally, despite the earlier efforts of that Junta, the contract was carried through and the Company adversely affected to a significant degree, not so much by the contract itself, as because having succeeded on this occasion, the Directors continued with other contracts and speculations which through the ignorance and negligence with which they were conceived and carried out gave rise to incalculable damage to the Company”. Filipinas 989 M Aguilar to D. Gardoqui, No. 107, Manila-Madrid, 5.8.1795.

23 Graham A. Mawbray also mentioned the contract between the Royal Company and Lane, Lance & Fitzhugh, although no mention was made of the size of the contract. Filipinas 986 No. 3 Graham Mawbray to Manila Directors, Calcutta-Manila. 25.4.1788.

24 Filipinas 986 No. 3 Graham & Mawbray to Manila Directors, Calcutta-Manila, 25.4.1788. Filipinas 976 Deposition of M. de Bajaman. 20.7.1792. Sevire however over-exploited his contacts with the Royal Company in Manila. In 1792 he brought in a ship “Soledad” under the English Captain John Guisa (?) from Mauritius. The ship and cargo were cleared and taxed under the name of Vicente Versoza and his brother Juan when in fact it was Sevire's property. A litigation ensued and Versoza's firm was closed down. Filipinas 976 No. 14, 19.4.1792.

25 In 1790 the Royal Company owed Graham & Mawbray £205,500 and Locatelle £107,000. Filipinas 988 Memo, to Marquis Yranda, Madrid 12.12.1790. HMS 495 W. Duntsfeldt to A. Murray, Copenhagen 26.7.1797.

26 Filipinas 986 No. 3 Graham & Mawbray to Manila Directors, Calcutta-Manila, 25.4.1788.

27 Filipinas 988 “Expediente sobre la solicitud … para la permita extraer 400 o 500,000 … para el puerto de Pondicheiry”. No. 34, 15.7.1791.

28 Filipinas 976 Manila Directors-to Madrid Directors, 8.1.1788 enclosing Paxton, Cockerell & Delisle to Manila Directors, Calcutta-Manila, 5.8.1787.

29 It is pure conjecture that the three Carvalhos — Jaoa, Francis and Alexander — who made several voyages to Manila in the first half of the century, were related to John.

30 CC 89 (1788) 23.6.1788; Cornwallis to Select, Calcutta-Canton, 22.6.1788 (received) Filipinas 986 Madrid Directors to A. Valdes, 31.7.1787.

31 CC 84 (1786–1787) 5.1.1787.

32 HMS 77/14 Agreement between East India Company and the Philippine Company, 10.12.1788.

33 “We are under the thankless restriction of conducting the trade to that port under the Portuguese flag which makes us liable to the exactions of the people of Macao, and an even grater evil can supervene and through a conference among them, we may on some occasion find ourselves entirely frustrated of the means of consigning your orders”. Filipinas 986 No. 3 Graham & Mawbray to Manila Directors, 25.4.1788.

34 “… to exercise all your authority and influence to procure from the Manila Government, papers and licenses for the two ships which will be employed in this commerce”. Filipinas 986 Graham & Mawbray to Manila Directors, 25.4.1788.

35 Ibid 986 No. 5 (reservada) Governor F.B. de Marquina to A. Valdes, Manila-Madrid, 15.12.1788.

36 HMS 634 p. 581–98 Anglo-Armenian Agreement, 21.6.1688.

37 Egerton 518 ff. 170 J.P. Viana to B. Yriarte, Madrid 10.5.1790. ff. 172–175 Viana Minute to Yriarte, 15.10.1790; ff. 217–224 Viana to Yriarte, 12.5.1791; ff. 246–253, Viana to Yriarte, 1.10.1791.

38 Egerton 518 ff. 213–216 B. Yriarte to J. de Aldazabal, Madrid 7.5.1791.

39 Quaison, S.D.: English Country Trade with the Philippines, 1644–1765 (University of Philippines Press, 1966) p. 93.

40 Filipinas 986 Madrid Directors to A. Valdes, 11.10.1787.

41 Mitchell later sailed the “Wallajah” carrying goods on the account of the Royal Company in 1789 ($502,489.6.8). The proceeds of this consignment was bought up by the Bombay Government early in 1790 to provision troops on the Malabar Coast. Bombay Sec/Pol. Con. Range E/3 p. 110, 4.5.1790; Filipinas 987 No. 227, 4.2.1790.

42 Filipinas 986 No. 2 Graham & Mawbray to Manila Directors, 7.8.1787 No. 3 Graham & Mawbray to Manila Directors 25.4.1788.

43 The Bunta was composed of Conde de Tepa (President), Bernardo Yriarte, Vicente de Hererra y Ribero, Josef de Basco, Francisco Munoz, and the Archibishop. Filipinas 976, Consulta de Junta, Madrid 10.3.1789; Royal Co. to Tepa, Madrid 16.10.1788; Josef Basco y Vargas to Tepa, Madrid 27.10.1788; Voto de Vicente de Hererra y Ribero to A. Valdes, Madrid 12.1.1789; FO 72/15 Royal Cedula opening Manila from 1.9.1790 dated 15.8.1789 enclosed in A. Merry to Duke of Leeds No. 27, Madrid-London, 24.8.1789.

44 “If the port of Manila remains closed to the European nations trading today in Asia, it will amount to conceding Manila's exclusively to the English through the hands of the Armenians their creatures who have monopolised it”. Filipinas 976 Junta de Estado to Director Philippine Co. Madrid 12.7.1788.

45 Filipinas 987 Madrid Directors/Co. to P. de Lerena, Madrid 24.11.1791.

46 FO 72/32 Enclosure in R. Woodford to Grenville, Whitehall, Commercial No. 4, 2.8.1792.

47 BM Egerton 514 “Papeles sobre la Navegacion” ff. 73–106. Seville Filipinas 977 “Estado de la embarcaciones que entraron y salicron de Filipinas con efectos de comercio desde 1° Junio 1795 hasta fines de May 1796”. 20.5.1796. Filipinas 988, “Nota de la plata que han introducido los barco que han fondeado en el Puerto de Bampu en la Monzon de 1791 a 1792”. 8.5.1792.

48 There were five in 1791–1792, several (undefined) in 1793–1794. and five in 1795–1796.

49 CC 84 (1786–1787) Select to Court, Canton-London, 8.12.1786.

50 CC 94 (1788–1789) Cornwallis to H. Browne. Calcutta-Canton, 12.7.1788; CC 96 (1789–1790) 5.5.1789; CC 89 (1788) 23.6.1788.

51 Egerton 518 ff. 193 “Reflexiones imparciales que Don Vicente Vasadre propone al Ministerio”. Madrid 14.1.1791; Filipinas 988 Madrid Directors to D. de Gardoqui, Madrid, 8.5.1792.

52 “By that Article the Spaniards stipulated that they would retain their navigation according to what they then held without the power to extend beyond it”.

53 “… in the East as well as the West Indies which are under the rule of the States General, the trade and navigation will be conducted as they have been done until now”.

54 Filipinas 986 Madrid Directors to A. Valdes, 19.7.1787.

55 The Dutch Minister to the Court or Ildefonso presented the protest to the Spanish Foreign Minister at the end of August 1786, and a long bitter exchange of notes ensued. The amusing story is reported of Count Floridablanca, the Spanish Minister replying in these words to the Portuguese Ambassador's inquiry after his health: “It is impossible. I should be well; there is the Dutch Ambassador has given a clyster — it is enough to make any man sick, but I have a good mind to send the Dutch Ambassador and their High Mightiness to the Devil”. FO 72/9 No. 60 R. Liston to Marquis of Carmarthen, St Ildefonso — London, 7.9.1786. Other reading in FO 72/6–9.

56 FO 72/7 No. 6 (sec/conf.) Marquis of Carmarthen to R. Liston, St James-St Ildefonso, 16.2.1786.

57 FO 72/10 E. Liston to Marquis of Carmarthen, Madrid No. 5 (conf.) 19.2.1787; Carmarthen to Liston, Whitehall, No. 7 (Sec/Conf.) 9.4.1787; Liston to Carmarthen, Madrid, No. 20, 21.4.1787.

58 “As a result the Asian goods which the Company exports from Manila for the wider market, attains a price which can neither allow a profit nor compete with the contraband of foreigners”. Filipinas 986 Madrid Directors to A. Valdes, 4.2.1788.

59 Among the ships granted permits to use the China station were the “Saula Rufina” (1788); “Sauta Rosalia” (1788); “Rei Carlos” (1794); “Princessa” (1795) “Reyna Maria Souisa” (1795).

60 Filipinas 989 D. Gardoqui to Commission 29.4.1796; No. 1 M. Aguilar to Gardoqui, Manila-Madrid, 22.7.1794; C. Directors to Gardoqui 6.7.1795 and 11.11.1795; J.B. de Marquina to Gardoqui, Madrid, 21.8.1795 and 6.2.1796; A. Malaspina to Gardoqui, St Ildefonso, 26.8.1795.

61 The Royal Commissioners were Conde de Compananes, Conde de Tepa, and Ramon de Posada y Soto.

62 Filipinas 989 Madrid Directors to D. Gardoqui, 3.2.1796.

63 Filipinas 985 “Estado qu manifesta los Bugues Espanoles y Extranjeros” 4.1.1787, No. 2 (1785; No. 1 (1786); Filipinas 976, 31.12.1787).

64 Filipinas 986 No. 5 (reservada). Berenguer de Marquina to A. Valdes, Manila-Madrid, 15.12.1788.

65 FO 72/31A No. 2 p. 295 (English Trans.), FO 72/32 p. 23 (French original), “Factum in answer to de las Heras”. 24.12.1791.

66 vide supra p. 22.

67 Egerton 514 “Papeles sobre la Navegacion” p. 71–106.

68 FO 72/31 “Factum in answer to de las Heras” 24.12.1791.

69 Vide supra p. 15. for the parallel British views — of the Indian authorities and the English Company.

70 “Such an expedient was not proper for the Company's ships nor were we able to venture to engage in this practice ourselves, even if we might be assured of the same tolerance with which the ships of these islands were being treated. Being denied all recourse to extend the active commerce, we saw ourselves obliged to limit our undertakings, and not (to consider) expeditions to India”. Filipinas 988 “Testimonio del Ynforme de la Direccion de la Real Compania” 18.6.1794, No. 68 P. Darwin & J.M. Arieta (Manila Directors of the Company).

71 BRPET Range 174/13 Report on Manila trade, 10.9.1800.

72 HMS 494 p. 107 Appendix to E. Parry and C. Grant to Board or Directors, EIC London, 14.10.1807.

73 HMS 77/14 p. 463 ff. Agreement between the EIC and the PEIC 10.12.1788.

74 HMS 77/14 p. 588 Bengal Board of Trade to Governor-General, Calcutta 1.12.1789.

75 HMS 77/14 Lord Cornwallis to Court of Directors, Calcutta-London, 7.12.1789.

76 HMS 606 p. 447 Minutes of Secret Committee 26.1.1786; p. 433 “Notes on Manila” 6.2.1789; CC 84 (1786–87) Minutes of January and February, passim.

77 FO 72/9 R. Liston to Marquis of Carmarthen, St Ildefonso-London, 11.10.1786 enclosing copy of proposed Anglo-Spanish Commercial Treaty.

78 BRPET Range 174/13 (1795–1802) Report No. 1 for 1796–1797.

79 CC 116 (1796–1797) 21.1.1797.

80 Murray a Scotsman and a British subject was also a naturalised Danish subject.

81 HMS 495, 496 passim deal in detail with the Scott case.

82 David Scott was for twenty three years a private merchant in Bombay before he returned to London in 1786. In 1787 he was in the Company's service, and began a long campaign to break the exclusive and restrictive features of the EIC policy to private trade and India shipping. The Company's shipowners yielded 3,000 tons on Company ships annually for private investments, by the 1793 Charter Act. Freight however remained beyond the investor's means. Scott used his experience in the clandestine trade to great advantage against the arguments of the shipowners. By 1796 he had become Chairman of the Secret Committee, which made him liable to a treason charge in 1798.

83 HMS 606 “Notes on Manila” deals in some detail with the plans and progress as well as eventual abandonment of the 1797 expedition.

84 HMS 494 p. 7 E. Parry & C. Grant to Court of Directors, 14.10.1807.

85 Filipinas 980, Notes, 3.8.1805.

86 BRPET Range 174/13 (1795–1802) Report No. 1 for 1796–1797.

87 CC 145 (1803–1804) p. 26 31.10.1803.

88 BRPET Range 174/15 (1803–04) Report for 1803–1804 p. 103; Range 174/15 (1804–1805) p. 154 Report for 1804–1805.

89 Filipinas 980, Notes. 3.8.1805.

90 BRPET Range 174/17 (1805–06) Report for 1805–1806, 8.5.1807.

91 Filipinas 977 “Estado de las embarcaciones que entraron y salieron de Filipinas con efectos de comercio desde 1° Junio 1795 hasta fines de Mayo 1796”. 20.5.1796; “Estado de las … desde 1° Junio de 1798 hasta fines de Mayo de 1799”. 20.6.199.

92 CC 150 (1805–1806) p. 63 Macao. 14.7.1805; BRPET Range 174/13 (1795–1802) Report for 1802, 26.8.1802.

93 CC 126 (1799–1800) p. 138, 14.9.1799; CC 122 (1798–1799) p. 41 26.3.1798; MRPET Range 339/80 (1803) p. 181; Range 339/86 (1804) p. 176; Range 339/110 (1809) p. 179; Filipinas 977 “Estado que manifesta las embarcaciones extrajeros que con efectos de comercio vinieron al Puerto de Manila … 1789–1799” 20.6.1799.

94 Ibid. and CD 135 (1801) p. 44.

95 BRPET Range 174/20 (1808–1809) Report for 1808–1809 1.5.1811.

96 BRPET Range 174/13 (1795–1802) Report for 1800, 10.9.1800 and 24.9.1800.

97 CC 118 (1797) p. 194, 2.11.1797; CC 126 (1799–1800) p. 138 14.9.1799; CD 135 (1801) p. 44.

98 CC 142 (1802–1803) p. 121, 29.11.1802; Select to Wellesley Canton-Calcutta 28.11.1802.

99 CC 144 (1803) p. 234 10.10.1803.

100 BRPET Range 174/13 (1795–1802) Report for 1800, 10.9.1800.

101 As early as 1787 the Bombay Governor expressed fears that the Goanese authorities would lower their duties to increase the prosperity of Goa and its adjacent territories. HMS 404 p. 61 David Scott to Court, London, 3.4.1787; p. 164 Scott to Court, London, October 1970.

102 HMS 494 p. 111. The new duties were operative from 1st January 1803.

103 Owen, D.E.: British Oplum Policy in China and India (Yale 1934), p. 13.

104 MRPET Range 340/32 W. Harrington to Reporter of Madras Private Trade, 13.11.1817; BRPET Range 174/19 (1807–1808) Report of J. Larkins, 2.1.1810.

1 Sources: The Filipinas are all in the Seville Archives of the Indias. The Egerton Papers are in the British Museum. All the India and China series cited come from the India Office Library in London. Abbreviations: BRPET: Bengal Reports of Private External Trade; MRPET: Madras Reports of Private External Trade; HMS: Home Miscellaneous Series; CC: Canton Consultations and Letters; CCL: Canton Court Letters; CD: Canton Diary; The Foreign Office Papers are abbreviated as FO.

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