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Native settlements are not allowed in Sangley settlements, or even near them. No Sangley can go among the islands, or as much as two leguas from the city, without special permission. Much less can he remain in the city at night, after the gates are shut, under penalty of death. There are generally some Japanese, both Christian and infidel, in Manila.

One is that the said settlement and district of these said Indian natives is very close to another district and market, that of the Japonese, so near that they are only about a stone's throw from each other; and the Japonese are fully as bad as the Sangley infidels, both on the score of the infamous sin, and as concerns the need of protecting ourselves from them as from enemies.

Still, from some cause or other, they do not appear to carry the on trade so successfully as the provincial shipowners, most of whom have only one or two small vessels, which they keep constantly running between their native place and Manilla, and whose sole business it is, after despatching either of them, to purchase up from the cultivators of the soil, such small lots of their produce as are cheap at the time, such as sugar, rice, &c., which they are able to do at greatly lower terms, when buying them by little at a time, than it would be possible for the agent of a merchant in Manilla to do, whose operations it would probably be necessary should be conducted upon a more extensive and quicker scale, and whose knowledge of the district and of the vendors could seldom be equal to that of a native Sangley, or Indian born among them.

The licentiate Geronimo de Salazar y Salcedo, fiscal of this royal Audiencia, is dead. He leaves his wife in very poor circumstances and a daughter who is without any resources, which is a great pity. In a letter of last year I told your Majesty how the sargento-mayor went to La Laguna, which is about fifteen leguas from this city, in pursuit of the Sangley rebels.

Hence it follows, as already observed, that the whole of the interior trade is at present absorbed by the principal natives, the Sangley mestizos of both sexes, and a few Chinese peddlers.