Asia-Pacific in the Making of the Americas: Toward a Global History

The Spanish Pancada and Chinese Revolt

From the beginning, Spanish authorities were troubled by the business methods and ethics of the Hokkien traders.  Their tendency was to warehouse their merchandize after they sailed up an estuary of the Pasig at high tide, directly into the lagoon in the middle of the Parián where they docked, there to wait patiently for optimal market conditions that would fetch them the best prices; this method required that they hung around Manila indefinitely.[12]  (Santamaria, pp. 89-90; Sugaya, p. 113; Salazar, no pagination; pp. 228 in Blair and Robertson translation).  If they were unable to sell off by May, in time for the galleons which departed for Mexico in late June, they simply held on to their wares until the following year, gambling that prices would improve.  While acknowledging that the Sangleys bargained skillfully and used credit astutely (“Es gente muy plática, e intelijente en la mercancía, … para hazer mejor su negocio; y saben fiar…”) (These people are very sociable, they are intelligent about their wares...in order to make the most of their business and to guarantee…), these tactics frustrated and infuriated the Mexican buyers and Spanish authorities, who accused them of all sorts of bad behavior and motives: “…como jente sin ley ni conciencia, y tan codiciosa, hazen mil fraudes, y engaños en la mercaderías,” (...how people without laws or conscience, and very greedy, make a thousand frauds, and win in the marketplace) thereby encouraging Mexicans to also default on payments and engage in other fraudulent activities, keeping the courts well occupied.  He should know, as he was one of the high judges (oidor).  (Morga, p. 313)

To resolve what they perceived to be a serious problem if not quite a crisis, Spanish authorities devised a system of exchange, called the pancada, that was imposed only on the Hokkien traders by 1593, perhaps earlier.  In August 1589, the Emperor, Philip II, sent instructions to Governor Dasmariñas to take control of disposing goods from the Chinese junks:  “… no Chinese or foreign ships could sell at retail the goods which they carried to the islands, as is done now; nor could the inhabitants buy the goods, openly or in secret, under severe penalties.  The purchase of the said goods was to be discussed by the Council, and as many and so qualfied persons as the business demanded were to be appointed. These persons alone should buy in a lot all the merchandise brought by the ships, and then distribute it fairly among the citizens, Spanish, the Chinese, and the Indians, a the same price at which it should be appraised.”  (Philip II, p. 138-39) It forced the Hokkien merchants, immediately upon their arrival, to sell their cargoes of merchandize in bulk and wholesale, and at fixed prices,  to a select committee of two or three persons.  The committee would then distribute the goods to Mexican merchants in proportion to the amount of money they were able to invest.  (Cunningham, p. 80; Philip II)  The arrangement was meant to give all the Mexican merchants a chance to purpose Chinese merchandize, while preventing the Chinese from demanding exorbitant prices.  (Cunningham, p. 80)  But of course, such a rigged market robbed the Hokkien merchants of a fair chance of maximizing profits, while limiting the range of exchanges that Mexican merchants could engage in as well.  The pancada system was supplemented by the “boleto” (lottery) system whereby available space on board the galleons was allocated to Mexican merchants in Manila.  

From its inception, the pancada was highly unpopular and broke down because both Mexican and Hokkien merchants refused to abide by it.  Even government officials, not to mention merchants, were inconvenienced because they had specific consignments of goods that were pre-arranged and pre-paid.  These consignments were “surreptitiously unloaded and stored” in the Parián; others simply arranged to make their purchases before official prices were fixed, usually paying a higher price in exchange for choice merchandize.  So both Mexican and Hokkien merchants conspired to end the practice by ignoring or circumventing it, even if the law remained in the books for some time.  It also did not work to diminish the number of Chinese who chose to reside more or less permanently in the Parián.  Concludes Filipina historian Milagros Guerrero, attempts to implement this flawed arrangement “had, if anything, strengthened Chinese hold on the commerce as well as on the economic life of the country.”  She adds: “The increase in the number of Chinese in the city due to the junk trade was as inevitable as it was significant.”  (Guerrero, p. 24; Bernal 1966, p. 45)

By contrast, Mexican authorities contrived to control prices in their favor, while trying to dissuade growing numbers of Sangley, who might number two thousand or more at high season, from tarrying long in the Parían.  In their estimation the large “infidel” Sangley population posed an imminent danger to social stability and peace. Mincing no words, the ever present and observant Morga explained, “Desto, nacen muy grandes inconvenientes: porque demás que con tanto número de infieles, puede a ver poca seguridad de la tierra, son jente mala y viciosa.” ( In fact, very big obstacles were born: because of these {Sangley} others, there were so many numbers of infidels, and they could lessen the security of the land, [because] they are a wicked and vicious people.) Moreover, so many of them meant they consumed too much available food.  “Y por ser tantos y grandes comedores, encareçen los bastimentos, y los consumen.”  (Morga, p. 319) (And because there are so many and so many big eaters, they raised the price of the wares and supply and ate it all.)


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[12] This lagoon, or pond, was fed by an islet carrying water from the sea.

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