Adam Smith and the Invisible Hand: Part II, the Manila to Acapulco Trade Route

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Sunday October 26, by Jerome F. Keating Ph.D.

Part I of this series can be found on Oct. 17. Now while Taiwan is often the center my writings, as far as Spain was concerned in the 16th and 17th centuries, Taiwan was only one part of the larger picture of its trade, empire and expansion. An oft-forgotten part of that picture is the long standing Manila-Acapulco Trade Route, whose establishment and history have enough tales, challenges and adventures to create several novels. For though the Spanish had arrived in the Philippines as early as 1521 and a remnant of Magellan's men would continue west to complete their round-the-world journey, the Spanish faced yet another problem. If they were to develop consistent trade with Asia, they would need to find a way back east across the Pacific Ocean.

We often read of the Spanish galleons bringing gold and treasures from Mexico back to Spain, but we seldom realize that there was a whole different theatre of trade developing on the Pacific side of Mexico. Why? As the Treaty of Tordesillas (1494) divided the lands bordering the Atlantic Ocean between the Spanish and Portuguese, so the subsequent Treaty of Saragossa (1529) divided the lands on the Asian side of the globe. This meant that for Spain, most of the lands west of the Philippines were in Portuguese waters. The Spanish were not to sail to, trade with or conquer lands in that area. For Spanish trade ships therefore even to venture through Portuguese trade routes was risky and provocative.

In today's age of steam and even nuclear powered ships, to go from the Philippines back to Mexico is no challenge. Going in any direction is natural but in the 16th Century, when ships were solely dependent on wind and current it was a different story. There were no winds or currents that went direct from Manila to Acapulco. They had to be found, and it would take the Spaniards some forty plus years of exploring to realize that they lay much further north off the coast of Japan.

Two Spaniards, Andres de Urdaneta and Alonso de Arellano, discovered this route almost simultaneously in following the Kuroshio Stream up to Japan. Arellano completed the return trip to Mexico first by about three months, but Urdaneta is given more credit since his records were more detailed and accurate allowing others to follow more easily.

While driven by the invisible hand, one must nevertheless admires the courage and daring of men setting out through uncharted Pacific waters on a trip filled with dangers of typhoons, storms, potentially hostile territories for a journey that could take 100 days or longer.

The Spanish ships would pass by Taiwan on this route, but Taiwan even after the Spanish settlements (1626-1643) would serve only as an adjustment point or a port in a storm if needed rather than a regular stop over. Since the ships were well laden with cargo and setting out for what would be a trip of anywhere from 80 to 120 days, the captains were more interested in making as much time as possible on this trek than in stopping for a rest so soon.

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Once established, this trade route from Manila to Acapulco would continue from 1565 to 1815 with the main commodities being the Spanish bringing silver from Mexico to use in Asia and bringing back to Mexico the much sought after Chinese silk. It is hard to imagine and picture such a world but it was there. This thriving trade carried on for over 250 years with its ups and downs, risks and rewards and the invisible hand bringing people together in ways they did not dream of. This too was part of Taiwan's past..