lony a stipulated
number of years, and to be possessed of at least eight thousand pesos.

For the support of the Philippine administration Mexico remitted
back to Manila, on the return of the galleon, a certain percentage of
the realized value of the above-mentioned official cargo, but seeing
that in any case--whether the Philippine Treasury were flourishing
or not--a certain sum was absolutely necessary for the maintenance
of the Colony, this remittance, known as the "_Real Situado_," or
royal subsidy, was, from time to time, fixed. [113]

The Philippine Colony was therefore nominally self-supporting, and
the _Situado_ was only a guaranteed income, to be covered, as far as
it could be, by shipments of foreign bartered manufactures and local
produce to Mexico. But, as a matter of fact, the Mexican subsidy
seldom, if ever, was so covered.

By Royal Decree of June 6, 1665, the Mexican subsidy to the Philippines
was fixed at P2,500,000, of which P2,000,000 was remitted in coin
and P500,000 in merchandise for the Royal Stores. Against this was
remitted value in goods (Philippine taxes and tribute) P 176,101.40
so that the net Subsidy, or donation, from Mexico was P 2,323,898.60.

Hence, in the course of time, coin--Mexican dollars called
_pesos_--found its way in large quantities to the Philippines, and
thence to China.

The yearly value of the merchants' shipments was first limited to
P250,000, whilst the return trade could not exceed P500,000 in coin
or stores, and this was on the supposition that 100 per cent. profit
would be realized on the sales in Mexico.

The allotment of surplus freight-room in the galleon was regulated by
the issue of _boletas_--documents which, during a long period, served
as paper money in fact, for the holders were entitled to use them for
shipping goods, or they could transfer them to others who wished to
do so. The demand for freight was far greater than the carrying power
provided. Shipping warrants were delivered gratis to the members
of the _Consulado_, to certain ecclesiastics, and others. Indeed,
it is asserted by some writers that the Governor's favourites were
served with preference, to the prejudice of legitimate trade.

The Spaniards were not allowed to go to China to fetch merchandise
for transhipment, but they could freely buy what was brought by the
Chinese. Indian and Persian goods uninterruptedly found their way to
Manila. Spanish goods came exclusively _via_ Mexico.

T