ts way to Mexico City, that, in latter days, the
Philippine galleons' cargoes did not always find a market. Moreover,
all kinds of frauds were practised about this time in the quality of
the goods baled for shipment, and the bad results revealed themselves
on the Mexican side. The shippers, unwisely, thought it possible to
deceive the Mexicans by sending them inferior articles at old prices;
hence their disasters became partly due to "the vaulting ambition that
o'erleaps itself and falls on t'other side." The Governor commissioned
four of the most respectable Manila traders to inspect the sorting
and classification of the goods shipped. These citizens distinguished
themselves so highly, to their own advantage, that the Governor had
to suppress the commission and abandon the control, in despair of
finding honest colleagues. Besides this fraud, contraband goods were
taken to Acapulco in the galleons themselves, hidden in water-jars.

In the time of Governor Pedro de Arandia (1754-59) the 100 per
cent. fixed profit was no longer possible. Merchants came down to
Acapulco and forced the market, by waiting until the ships were obliged
to catch the monsoon back, or lie up for another season, so that often
the goods had to be sold for cost, or a little over. In 1754 returns
were so reduced that the _Consulado_ was owing to the _Obras Pias_
over P300,000, and to the _Casa Misericordia_ P147,000, without any
hope of repayment. The _Casa Misericordia_ lent money at 40 per cent.,
then at 35 per cent., and in 1755 at 20 per cent. interest, but the
state of trade made capital hardly acceptable even at this last rate.

Early in the 18th century the Cadiz merchants, jealous of the
Philippine shippers, protested that the home trade was much injured by
the cargoes carried to Mexico in Philippine bottoms. So effectually
did they influence the King in their favour that he issued a decree
prohibiting the trade between China and the Philippines in all
woven stuffs, skein and woven silk and clothing, except the finest
linen. Manila imports from China were thereby limited to fine linen,
porcelain, wax, pepper, cinnamon, and cloves. At the expiration of six
months after the proclamation of the decree, any remaining stocks of
the proscribed articles were to be burnt! Thenceforth trade in such
prohibited articles was to be considered illicit, and such goods
arriving in Mexico after that date were to be confiscated.

By Royal Decree dated Octobe