Morga next sketches the condition at that time of Spanish colonies in the islands. He describes the city of Manila in detail, with its fortifications, arsenals, government and municipal buildings, cathedral, and convents; also the seminary of Santa Potenciana, and the hospitals. There are six hundred houses, mostly built of stone, within the walls, and even more in the suburbs; "and all are the habitations and homes of Spaniards." All the people, both men and women, are clad and gorgeously adorned in silks; and nowhere is there greater abundance of food, and of other necessaries of human life, than in Manila. Morga enumerates the dignitaries, ecclesiastical and civil, who reside in the city; and mentions it as the center and metropolis of the archipelago. He then briefly describes the other Spanish settlements in the Philippines; and mentions in their turn the various orders and their work there, with the number of laborers in each. He praises their efforts for the conversion, education, and social improvement of the Indians. He defines the functions of both the civil and the ecclesiastical authorities, and the policy of the government toward the natives; and describes the application and results in the Philippines of the encomienda system imported thither from America. He deprecates the permission given to the Indians for paying their tributes in kind or in money, at their option; for it has led to their neglecting their former industries, and thus to the general damage of the country. Slavery still exists among them, but the Spaniards have been forbidden to enslave the natives. Personal services of various sorts are due from the latter, however, to their encomenderos, to the religious, and to the king, for all of which they receive a moderate wage; and all other services for the Spaniards are voluntary and paid. Close restrictions are laid upon the intercourse of the Spaniards with natives. Various information is given regarding appointments to office, residencias, elections, town government, and finances; also of the ecclesiastical organization, expenses, and administration, as well as of the incomes of the religious orders. Morga recounts the numbers, character, pay, and organization of the military and naval forces in the islands. The bulk of the citizens are merchants and traders, commerce being the chief occupation and support of the Spanish colony. Manila is a market for all the countries of Eastern Asia, from Japan to Borneo. The China trade is restricted to the inhabitants of the Philippines; Morga describes its nature and extent, and the manner in which it is conducted, as well as the character and methods of the Chinese traders. A similar account is given of the trade carried on with the Philippines by the Japanese, Borneans, and other neighboring peoples, and of the shipment to Nueva Espana of the goods thus procured. This last commerce is "so great and profitable,