Grau notices the accusations that have been made against the Philippine commerce, of infractions of the ordinances regulating it; while not denying these, he claims that they are not more extensive or serious than those that are committed in the India trade, and do not deserve the severity which has been employed against them. In behalf of the islands, Grau asks for an increase in the amount of trade permitted to them; for the restrictions on their commerce have greatly reduced their wealth, on which heavier burdens are constantly laid by the necessity of defending themselves from so many and so powerful enemies. The population of Manila is also much larger than when the trade was first limited, and needs more for its support; moreover, much of the amount permitted is granted to convents and other institutions, and to certain privileged persons, and various deductions are made from its total, thus diminishing its actual value. Grau argues that a sufficient increase in the trade of the islands would put a stop to illegal shipments of goods; and that the exporters cannot make any reasonable profits unless they are more liberally treated. He suggests that they be allowed to export goods freely, a limitation being placed only on the returns of silver therefor; and urges that the products of the islands be free from all restrictions, and not included in the amount permitted--which latter should apply only to Chinese goods--for which he adduces various forcible arguments. Discussing then the commerce between Nueva España and Peru, he shows that the suspension of this trade during 1635-40 has been very injurious to the Philippines, for various reasons; it has also hurt both Peru and Mexico, especially by checking the latter's silk industry, which found a market in Peru. He defends the Peruvian merchants from the accusations made against them of transgressing the trade permission that had been accorded to them, and urges that, for the sake of all the western colonies, this permission be restored to Peru. This memorial by Grau is followed by several royal decrees (dated February 14, 1640) addressed to Palafox; these are mainly "informatory," and lay before that official the representations made by the citizens of the islands regarding their distressed condition--ordering him to investigate the affairs of Philipinas carefully and thoroughly, and report thereon to the home government. In later volumes of this series will be presented a considerable part of the Extracto historial--a work which, as we understand, has not before been Englished--on account of the importance attached not only to the book as an official report, but to the commerce of the Philippines as a factor in the history and development of that Spanish colony in the Far East.