The Manila Galleon was a royal fleet that sailed between Manila and Acapulco from the late 1560s to 1815 to sustain the Spanish government in the Philippine islands with people and funds and to facilitate trade. The excellent harbor conditions of Manila Bay and its geographic location made it a focal point for exchange, where merchants converged with spices, textiles, ceramics, and other goods from China, Japan, India, and other parts of Asia. The ships of the Galleon transported these commodities, including slaves, to the Americas. On their return, the ships primarily carried minted silver and products like cochineal.

The Hapsburg Crown moved to regulate this fleet in 1593, with additional decrees that were codified in the Laws of the Indies. The 1604 decree by Philip III is one of these documents (Fig. 4.1). Merchants initially carried out trade freely, including by chartering their own ships. The lack of regulation sparked protests from various quarters, from competing merchants in Seville to government officials concerned with the safety and regularity of the ships. The Crown set out the conditions detailed in this decree to address their concerns. The decision to administer and fund an annual fleet had the primary purpose of encouraging vassals to live in Spain's most far-flung settlement in return for trading opportunities. Its chief outcome was to enrich silver merchants in Mexico City, who sent large amounts of capital to Manila to invest in Asian goods, which were then sold back in New Spain (Mexico) for extravagant profits.