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Spanish Settlement and Rule, Manila Galleons and Spanish Trade
Manila galleons, galleon trade, government monopoly, British East India Company, direct trade
Although Spain did not capture a share of the profitable Moluccas spice trade, it did use the Philippines as a base for trade between Asia and the Americas and as a way to challenge the Portuguese maritime monopoly. Manila played an important role as a port for the Manila galleons, huge Spanish trading ships that voyaged between Manila and Acapulco, on the west coast of New Spain. The galleons sailed from Manila with Chinese goods, mainly silk textiles and porcelain, and returned from Acapulco with silver bullion and minted coins, which purchased more Chinese goods. The galleon trade was a government monopoly that had exclusive trading rights with the Philippines, and no direct trade with Spain was allowed. The colonial treasury of the Philippines received a subsidy, consisting mainly of customs duties paid at Acapulco, that was the colony’s main source of income. The galleon trade presented new opportunities for Chinese merchants, who formed an economically important community in Manila by the 1590s. They outnumbered the Spanish and were subject to residence restrictions and periodic deportations.
In 1762, when Spain became involved in the Seven Years’ War on the side of France against Great Britain, the British East India Company captured Manila. The treaty that ended the war restored Manila to Spain in 1764. The British occupation, although brief, exposed the resentment of Spanish authority and discrimination felt by local peoples, especially the Chinese, some of whom openly supported the British. After Spanish rule was restored, the colonial government implemented a series of reforms to promote the economic development of the islands through commercial agriculture and household industries. The establishment of a state monopoly of the cultivation, manufacture, and sale of tobacco in 1782 enabled the colonial government to balance its budget and send substantial subsidies to Spain. The galleon trade, already much diminished, ended in 1815. Trade was opened to the world, and the links to Latin America weakened rapidly after Spain’s colonies there won independence.
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