After the establishment of a regular camp for guard and expeditions, the other inhabitants, dwellers, and residents were enrolled without pay under the banners of six captains of the Filipinas, for special occasions requiring the defense of the city.  But they were relieved of all other duties pertaining to the troops, unless they should offer of their own accord to go upon any expedition, or volunteer for any special occasion, in order to acquire merits and benefits, so that they may be given encomiendas that become vacant, and offices, and the means of profit of the country.  They are not compelled or obliged to do this, unless they are encomenderos.  Consequently all have given themselves to trading, as there is no other occupation, but they are not unmindful of military service.

His Majesty prohibits all who are in his pay in the military forces of the islands from engaging in commerce; and orders the governor not to allow this, or permit them to export goods to Nueva Espana.  If the governors would observe that order, it would not be amiss. [230]

The merchants and business men form the bulk of the residents of the islands, because of the great amount of merchandise brought there—­outside of native products—­from China, Japon, Maluco, Malaca, Sian, Camboja, Borneo, and other districts.  They invest in this merchandise and export it annually in the vessels that sail to Nueva Espana, and at times to Japon, where great profits are made from raw silk.  Thence on the return to Manila are brought the proceeds, which hitherto have resulted in large and splendid profits.

Through the very great increase of this trade—­which was harmful and prejudicial to the Spanish merchants who shipped goods to Peru and Nueva Espana, and to the royal duties collected on the shipments from Espana—­and through the business men of Mexico and Peru having become greedy of trade and commerce with the Filipinas, by means of their agents and factors, so that the trade with Espana was ceasing in great measure, and the merchants were sending to the Filipinas for their investments great consignments of silver, which by that means flowed yearly from his Majesty’s kingdoms, to fall into the possession of infidels:  all persons of Nueva Espana and Peru were prohibited from trading and engaging in commerce in the Filipinas, and from taking the Chinese merchandise to those regions. [231] Permission was given to the inhabitants and residents of the Filipinas that they alone might trade in the said merchandise, and export it.  They are to take these goods themselves, or send them with persons who belong to the islands, so that they may sell them.  From the proceeds of the said merchandise, they may not carry to the Filipinas more than five hundred thousand pesos each year. [232]