ride and love for outward show in a manner never known before, at
the expense of the American capitalists. As bankers, the firm enjoyed
the unlimited confidence of those classes who had something to lose as
well as to gain; hence it is said that, the original partners having
withdrawn their money interest, the firm endeavoured to continue
the business with a working capital chiefly derived from the funds
deposited by private persons at 8 per cent, per annum. All might
have gone well but for the rascality of the native agriculturists,
who brought about the failure of the house in 1875 by taking loans
and delivering no produce. The news amazed everybody. Trade was,
for the moment, completely paralyzed. The great firm, which for years
had been the mainspring of all Philippine mercantile enterprise, had
failed! But whilst many individuals suffered (principally depositors
at interest), fifty times as many families to-day owe their financial
position to the generosity of the big firm; and I could mention the
names of half a dozen real-estate owners in Yloilo Province who,
having started with nothing, somehow found themselves possessing
comparatively large fortunes at the time of the liquidation.

Consequent on the smash, a reaction set in which soon proved beneficial
to the Colony at large. Foreign and Spanish houses of minor importance,
which had laboured in the shade during the existence of the great
firm, were now able to extend their operations in branches of trade
which had hitherto been practically monopolized.

Before Manila was opened to foreign trade, even in a restricted form,
special concessions appear to have been granted to a few traders. One
writer mentions that a French mercantile house was founded in Manila
many years prior to 1787, and that an English firm obtained permission
to establish itself in 1809. In 1789 a foreign ship was allowed to
enter the port of Manila and to discharge a cargo. This would appear
to have been the first. In olden times the demand for ordinary foreign
commodities was supplied by the Chinese traders and a few Americans
and Persians. During the latter half of the 18th century a Spanish
man-of-war occasionally arrived, bringing European manufactures for
sale, and loaded a return cargo of Oriental goods.

The Philippine Islands were but little known in the foreign markets
and commercial centres of Europe before the middle of the 19th
century. Notwithstanding the special trading c