These treaties, however, were virtually quashed by
King Charles III. on the establishment of the "_Real Compania de
Filipinas_." Holland only lodged a nominal protest when the company's
ships were authorized to sail to the Philippines _via_ the Cape of
Good Hope, for the Spaniards' ability to compete had, meanwhile,
vastly diminished.

With such important immunities, and the credit which ought to have
been procurable by a company with P8,000,000 paid-up capital, its
operations might have been relatively vast. However, its balance
sheet, closed to October 31, 1790 (five-and-a-half years after it
started), shows the total nominal assets to be only P10,700,194,
largely in unrecoverable advances to tillers. The working account is
not set out. Although it was never, in itself, a flourishing concern,
it brought immense benefit to the Philippines (at the expense of its
shareholders) by opening the way for the Colony's future commercial
prosperity. This advantage operated in two ways. (1) It gave great
impulse to agriculture, which thenceforth began to make important
strides. By large sums of money, distributed in anticipation of the
4 per cent, on nett profit, and expended in the rural districts, it
imparted life, vigour and development to those germs of husbandry--such
as the cultivation of sugar-cane, tobacco, cotton, indigo, pepper,
etc.--which, for a long time had been, and to a certain extent are
still, the staple dependence of many provinces. (2) It opened the
road to final extinction of all those vexatious prohibitions of trade
with the Eastern ports and the Peninsula which had checked the energy
of the Manila merchants. It was the precursor of free trade--the
stepping-stone to commercial liberty in these regions.

The causes of its decline are not difficult to trace. Established as
it was on a semi-official basis, all kinds of intrigues were resorted
to--all manner of favouritism was besought--to secure appointments,
more or less lucrative, in the _Great Company_. Influential incapacity
prevailed over knowledge and ability, and the men intrusted with the
direction of the company's operations proved themselves inexperienced
and quite unfit to cope with unshackled competition from the outer
world. Their very exclusiveness was an irresistible temptation to
contrabandists. Manila private merchants, viewing with displeasure
monopoly in any form, lost no opportunity of putting obstacles in
the way of the company. Again, th