The Commercial & industrial manual of the Philippines (Part 1 of 4) by Filipiniana Online

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THE

COMMERCIAL & IND UST RIA L MA NUA L ~ OF THE

PHILIPPINES 1937 -38

WITH 150 ILLU STRA TIO NS AND MAP

DONATED BY AYAL A CORPO RATIO N TO FILIPI NAS FO UNDA TI0!'l. INC.

AYALA LIBRARI PUBLl SftBRS INCORPOR ATBD c /o PmUPPUili ED UCATIO N'

100-tO) Escohl M"'N'Il.A

Co., IN'c ..

AYALA LlBRARY

117 3 Rp/k

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1.[.0 tbS113'1/38

I NDUSTRIAL M ANUAL

OF THE P HILIPPI NES arc protected by coprrigh r secured

under the: laws of the Philippines. wLIJ be proscnHcd.

All infringements

MADE AND PRINTED IN MANIL ...

PREFACE ~~~;;(i';m ONG

years of experience as the directing head of various business enterprises and as an official at the helm of d ifferent units of the Government have developed in me a strong belief that success lies in a large measure in the system which effects constructive activity. Now, system, in its narrow sense, implies forms, rules, regulations; and in its wider sense, organization, facility for classifying and expediting th e manifold activities of business. The Commercial dud Industrial Manual of the Philippines furnishes a system which facilitates informacion necessary in the functioning of an active organization. For example, its contents are so arranged by sections that one may easily fin'cl the information desired about the Philippines. In this way, the volume renders that"~nvisible service known as speed in locating data for transacting business. The articles, being wri tten ~ those qualified to discuss the particular subjects, are dtpendahle guides.

S'y

The Philippines tocfay is attracting attention in come mporary international life, and everi year people from different countries come to visit the Philippines wishing to know how the young ~ation conducts its affairs , hOHc its commerce is carried on, how its trades and industries supply the peoples wants and how the Filipinos maintain their relationship with other people. This M a1ltla! gives the reader a direct and sympat het ic acquaintance with whatever question that turns up in his mind. There is to be found in this volume something more than a mere directory of the industrial and commercial firms or a list of the distributi ve agencies of the Philippines. It describes the cou mrr through such varied articles as to gi ve a perspecti ve a r a glance in compact form of the hi sto ry of the Philippines, its development, the facts about the Government, and the economic structure of the Commonwealth . Illustra tions are in abundance to furnish evidence of the progress of the Filipino people. It gives an insight inca the life in the interior pr:ovinces. The Ma1ltla! opens with a picture and biographical sketch of Hi s Excellency, Manuel L. Quezon , first President of the Philippines, follow ed by th e messages and photographs of the Cabinet, who direct the destiny of the country. The next few pages are devoted to a historical account of the Philippines since its discovery to the present day, and an enumeration of events lead ing up to the establ ishment of the Commonwealth. The Manllal then gives a flashlight view of the construction program of the New Nation, and the organization and functioning of th e Government, winding up to the growth of the country along agriculture, commerce, and in d ustries.

The directory of business firms which constitute t he greater part of t he Manual does not come until about the midd le of t he volume. T he listi ng gives the add ress, capitalization, business, principals, directors, bank references, and ot her miscellaneo us data of each firm, and here indeed is a Manual very useful to businessmen seek ing contacts with other businessmen. The last part of theMttlt1tatconsists of official governmental and genera l information, such as those a@out t he Govern ment of the United Star~s and of t he Commonweal th of the PhiliRpinesj information about religious organizations, ed ucational institutions, political parries, social groups, chambers of commerce, and masonic organizations; and a directory of professionals.

It is nO[ tOO much to say that this vo lume will be of va lue to anyone. Businessmen and bankers, publicists and public men, studen ts and scholars, officials as well as professionals can find help in it to accomplish t heir pracrical purpose. The man with constructive imagination may find a rich field of information between the covers of the Manual. He .sees suggestions for investments, hints for capitalizing his opportunities, ourlets for dlstribution for his products, sources of supply, markets, business location, conracts, and many other constructive ideas. EULOGIO RODRIGUEZ,

Secretary of Agriculture and Commerce.

MAGALLANES MONUMENT-

MACTAN . CBBU

" ,

.-'

DEDlCATED TO PHILIPPINE NATIONAL HEROES TUGUEGARAO RIZAL MONUMENT-CAGA Y AN

PRESIDENT MANUEL L. QUEZON

CROSS the forbidding Sierra Madre Mountains lay, in 1889, forty miles of tOrtUOUs trails between the obscure village of Baler. Tayabas, and

[he nearest road to Manila.

Along these, sometimes on foot, strug-

gled a boy of eleven years and his father , Lucio Quezon.

The pur-

pose of their journey was co enter young Manuel in the College of San Juan de Lerran, situated in the capital city. Symbolic of the seemingly insurmountable obstacles which he has since overcome must be in the mind of Manuel L. Quezon coday, [hat first momencous journey of his childhood. His was a heritage of poverty and constant struggle, but a lso of inflexible purpose, a brilliant mind , and daundess courage. He graduated from (he College of San Juan de Lcrran and from the Universiry of Santo Tomas with highest honors . As an officer in the Filipino Army during the Filipino··American War, he rose swiftJy from lieutenant of infantry (Q major. In the three years b~tween 1903 and 1906, his ability and force of character ca,rri ed him from (he level of a,n almost unknown lawyer, co the governorship of Tayabas, one

of the richest provin.ces of the Arch ipelago. Election to the first Philippine Assembly in 1907 was the next logical step in hi s career, to be followed , In 1909, by his selection as one of the twO Resident Commissioners to the Congress of the United States, where he succeeded in obtaining for his country three vitally important concessions: in 1913, a Filipino ma jority in the Philippine Commission; in 1916, the surrender of all legislative rights to Filipinos by the establishment of the Phi lippine Senate, of which he became the president; and the solemn pledge of ind ependence for the Philippines from the Congress of the United States. The independence of the Philippines, possibly within the lifetime of Manuel L. Quezon, was now clearly assured as the result of the unceasing efforts which he had made tOward th is great national aspiration during those eight years in Washington. On tv[ay 1, 1934, the valiant batrIe which he had waged for nearly thirty years was crowned with glorious success, when the Philippine Legislature accepted the TydingsMcDuffie Law, granting the Islands complete liberty in tcn years hence. Then, on September 17. 1935, the Filipino people bestowed upon him their greatest gift in electing him first President of the Philippines. From the obscurity of humble circumstances which attended his birth on August 19, 1878, he had risen, in 57 years, to a preeminence immortal in the heans of his countrymen . • Th. Blu o n""k

MONUMENT DEDICATED TO PHILIPPINE NATIONAL HEROES . J

[

----" ' . i\.'~··,.

VICE-PRESIDENT SERGIO OSMENA §:;=~m

0 the service of his country Sergio Osmefia has brought two sterling gifts of the pioneer-breadth and nobility of vision and steadfast, indomitable courage. His brilliant personality and outstanding ability as a constructive, sagacious leader early arcracred the favorable attention

of American administrators, and, in 1904~ Luke E. Wright appointed him governor of his hom e province, ecbu.

Two years later, in 1906 , he was designated fiscal for

ecbu and Negros Oriental, and in the same yea r was elected Governor of ethu.

October, 1906 , although the youngest of all provincial executives in the Archipelago, he presided over rhe assembly of provincial governors held in Manila, and was elected chairman of thac body. For a young maQ scarcely 28 years of age ch ese were indeed distinctive achievements.

Nevert heless, hi s public career had only jpst begun, for in 1907, he was elected

Delegate

the first

Phi~ppine

Assembly, and it was in the Assembly, as Speaker from

1907 until 1916, thac he performed, perhaps, his g reatest pacrioeic service in so conducting chi s legislative body as to make good the claim of the Filipino people to self-governmenc. After the creation of the Philippine Senate in 1916, Sergio Osmeiia was urged by his friends

seek election as Senaror, but rhis he could not bring himself

do until

six years later, so great was his interest in the work of the Lower House and his loya lty fO

it, which he regarded in the light of a condnuation, practicall y at least, of rhe

Philippine Assembly.

In 1~22, howeveIi, after remaining continuously in the House

of Representatives as Speaker, he was elected Senaror from the Temh Districc, and has consistently served in this capacity until November 15, 1935, when in his 57th yea r, he emcred upon a new career of service to his country, as Vice Presidem of the Philippines, his early vision of the future of this nation almost realized, and che courage and faith chac have sustained him throughout the long struggle toward national self determinacion rewarded . • Tho BI~t HOM:

PRESIDENT MANUEL

QUEZON

MESSAGE OF PRESIDENT QUEZON ~~~~

HE Filipino people, w ho are firm believers in self-govern ment, have been struggling for the anainmenr of an independ en t existence. For the last thirty years they have oriented the course of their life. political as well as economic, tOwards a definite goal-the opportunity to play the part of an independent people in the concert of narions. In this struggle for political emancipation several advances have been made. In 1907 the Philippine Assembly, the first national elective law-makin g body in the land, was created through an act of the American Congress . In 1916, the Philippine Senate 'Was established through the passage by Congress of the Jones La w. This increased the part played by Filipinos in the affairs of their own government by placing full legislative powers in their hands. And two years ago this gradual march towards greater Philippine autonomy was capped by the approval of the TydingsMcDuffie Law which provides for Philippine independ ence ten years after the approval of that law. It is evident, therefore, that now we have a definite objective in view. Nearly two years ago we inaugurated the new form of autonomous government created by the Tydings-McDuffie Law known as Commonwealth of the Philippines. From that date we have dedicated ourselves to the task of nation building so that after the tenyear t'ransition period or as soon as the Congress shall decide, we shall emerge a people ready in every respect to venture 0ut inaependently into the sea of international affairs . We have starred mustering the energies of the nation with a view to securing economic self-containment calculated to bring about peace throughout the country. We have made changes in the old governmental machinery in order to effect simplicity, efficiency and economy. We have stimulated the trades and industries and brought about labor reform s so that there can be provided work and a reasonable wage for every national. Armed with all these weapons, we have never been better prepared than now to guide our own destinies and I am fully confident that with earnest determination our people. cannot fail. MANUEL L. QUEZON, PreJidmt of the Philippine;.

MESSAGE OF VICE-PRESIDENT OSMENA E~'E'~

HE question of Philippine independence has been defin itely setded

by the Congress of the United Scates.

The cask that now

fronts the Filipino people is the preparation of rhe country

COI]In

most comprehensive sense for [he independent status chat it will attain eight years hence. It is nOt necessary to elaborate upon the imporrance of such preparation, particularly in [he economic field.

HO\v to assure a decent livelihood co the people not

only during the tra~sition period but especially in the years follovving the granting of independence is indeed an urgenr, difficult and most complicated problem.

Nevenhe-

less, it is one chat rnus~ be met and solved during the period of transition if we are co measure up ro

OUf

present obligation as citizens of this country and to perform our

share in securin g prosperity and happiness for the nation. There are also other fields such as national defense and education in which work of a serious and comprehensive nature must be done if this preparation for independence is to be made complete and to rest on sound and lasting foundations. It should be the concern of every inhabitant of the Philippines at this time, be he a Filipino or a foreigner, to contribute all that he can to this work of narional preparation so that all may particirate in the prosperity and concentmenr which should be rhe logical outcome of [he combined and earnest labors of all for the a-Jv:tncemenc of th e common welfare.

OSMEKA,

Viet-President of the Philippims.

HON.

GIL

MONTJLLA

Speaker, Natiol1al A.rsembl-y

MESSAGE OF SPEAKER GIL M. MONTILLA HE Filipino people real ize the responsibilities which nationhood may bring. This is evidenced by the fact that commercial and industrial activities in [he Islands have greatly increased recently. We are exploiting our resou rces with the prime motive of providing for our present needs and, for the needs of an independent Philippines. The new political stants awakens in us a consciousness of our rich natural resources, and we are proud co sa that our present goveljnment is very much interested in the intelligent and successful planning of this pha se of our nadonal development. We are confident, therefore, that our task of nationbuild ing will be carried through a successful end . GIL M. MONTILLA, Speaker, National Auembly.

HON. RAMON A VANCENA Chitf j1/-Stict of tht S1lprtme Court

A MESSAGE OF

HON.

JOSE YULO

JTH best wishes for th e success of Th e Commercia [ and

Industrial

Ma-\l uaI

the

Philippines. J OSE YULO,

Secretary of Justice .

H ON. ELPIDlO QUIR I NO

Secretary of the Interior

MESSAGE OF

H ON.

ELPIDIO QUIRINO

ITH the establishment of the Commonwealth of the Phi lippines, the immediate task of the Department of the Interior has been to extend to the remotest barrio of the archipelago the wholesome policies announced by OU f chief executive, President Manuel L. Quezon. Seeing a splendid opportunity for those in charge of our local self-governing unics to perform a lasting service to the material welfare of the people, this Depart"ment launc hed a campaign urging each one of the 48 provinces and 915 municipalities to adopt a well-defined scheme of economic development in line with the national program . . While other agencies of the insular government under the American regim e have been active in moddling OUf life to the exigencies of modern and scientific ways of living, our municipalities have lagged behind in this respect; as a result a great majority of our educated youth has the tendency to avoi~ living in th e communities of their birth, because of the drafness of rural or small-cown life and the little opportunities offered therein. To rem~dy this situarion, the Department has strongly advocated town planning co revital ize and modernize the progress of local communities in order to awaken rhem from the lethargy acquired duning the past three centuries. A planned economy for each of these units was sought, so that all entities might adjust their expenditures to revenues, and in Ghis way ach ieve true local autonomy. T wo years ha ve passed since the inauguration of the Commonwealth of the Philippines. During that period, four new cities were given charters and several municipali ti es created as the direct result of th e Department's policy of constructing towns and ci ties, based on the sound premise that to build them would be building provinces, and building provinces would be build ing the nation. ELPIDIO QUIRINO,

Secretary of the Interior.

H ON. A . D E L AS ALAS

Secretnry Of Finnnce

MESSAG E OF

HON.

A. DE LAS ALAS

~~~ HE publication of a Commercial mid Indus-

trial iWamta! of the PhilippineJ is mo st weJcome especially at this time when the Philippines is a bo ut to take her place in

[he concert of independent nations. The commer,al and industrial possibilities of the country are not well known abroad and foreign capital looking for opportunities for investment are not sufficiently anracrcd to migrate ro the Philippines. The sound and stable economic condit'ions existing in the Philippines as shown in rhe pages of rhis Manlt a! are a guarantee that capital could find profitable employment in rhe Philippines. This Mmwal should be a useful source of information about rhe Philippines especially on the economic developmen t of the country. A. D E LAS ALAS, Secretary of Finance.

HON. EULOGIO RODRIGUEZ

Secretary of Agriculture and Commerce

MESSAGE OF

HON.

EULOGIO RODRIGUEZ

publication of a book, The Commerci(t/ and Il1dustrial Manual of the Philippines, especially at chis time when special emphasis is being given to the economic development of the Islands, is very timely. The commercial and trade aspect of chat development has intimate relationship. with our conracts with [he outside world, especiall y the countries of [he Far East. I hope thac this book, which will be published in Manila, will serve to bring the Philippines nearer in every way CO th e peoples of this pan of the world through closer trade relations with resultant ever increasing need of the things chat we produce in this country. Conversely, it is to be hoped that our neighbors will become known to us better through mutual exchange of goods, in a larger measure than it is today, so that the cordial relationship that exists between us may grow increasingly in the future. This book if widely circulated can aid greatly in the realization of this much desired friendly neighborliness . EULOGIO RODRIGUEZ ,

Secretary of Agricultllre and Commerce.

H ON. M. JESUS CUE NCO Secretary of Public Work! and Communication!

MESSAGE OF

HON.

M. JESUS CUENCO

T is with great pleasure that I join the readers of The Commercial and Industrial M anual of the Philippims in welcoming its entry in the local field. There can never be tOO many publications of this class in chis coumry especially at this stage of our commercial and industrial develo ment. We have so much to learn of OUf own weaknesses as well as our strength. I ha ve every hope that the MmJltai w~l pro\re a valuable addition to our li st of publications dedicated co the progress of our industry and commerce. The service that it will rend er the community may well be regarded as an asset to aid us in carrying on. Of interest to this Deparrmenc will be th e benefits that Government contractors may derive from the publication, since we are cerrain that such benefits will redound to th e advantage of the Government. We are anxious co see that all means are offered contraGcots for improvement and progress in their chosen line, and we realize tha t the Mmmal is a facility very much desired. Needless to stace, the business of contracting has ramifications reaching into practically all the indu-5tries and commercial encerprises. I congratulate the Publi shers of the MtlJl1t at on the ir worthy undertaking, and wish them every success.

J ESUS CUENCD,

Secretary of Public Works and C01nnlttlliCllfiOlls.

HaN. RAMON TORRES

Secretary of Lahor

: . II

MESSAGE OF

!.,

HON.

RAMON TORRES

HE Philippine Department of Labor was creaccd on December 8, 1933, for the purpose of

'~.l路 ~

looking after the interests of four million persons that perform the Nation's hard work. It has the executive supervisio n over the Bureau of Labor, the Office of the Inspector-General of Labor and the Immigration Division. Being of recent creation, it is the least known among the Executive Departments of the Commonwealth of the Phil ippines. Thi s situation is gradually giving way to a morc widespread knowJedge as tne laborers and underprivileged are becoming av,rare and are availing themselves of [he gratuitous services of the Department of Labor. Public Defenders have been assigned to stra tegic places in the provinces to the end that problems arising between labor and cap' tal and landlords and tenants may be solved through their friendly mediation. In this way, not only harmonious relat~ons between the disputants are maintained but also possible losses due to suspension or stoppage of activities are minimized. It is also their duty to defend indigene accused persons in criminal cases and laborers' claims in civil cases before the CourtS of justice. The immediate task of the Department is to see to the proper enforcement of all laws relative to labor and capical in the Philippine Islands and to supervise all other matters related to the welfare of the Pdipino laborers both here and abroad. '1

RAMON

TORRES,

Secretary oj Labor.

HON. JORGE

VARGAS

Secretary to the President

MESSAGE OF

HON.

JORGE B. VARGAS

:=;e,,:::;,"E'it'! HE Philippines has been a popular subject for treatment in many books , fortunately or otherwise. Fortunately because they have

served to hoist the counery before the eyes of the world, and unforcunarely because some of these books presented it before suc h eyes not in its real colors, possibly through ignorance but in more instances for a designed purpose. At this ped0d of its history, the Philippines has attracted considerable attention, but it deserves to be khown better in order to und erstand (he ideals and aspirations of its people, their state and [he progress they have made in preparation for an independent nationhood. Informative literature on the country should not be superficial but depth-sounding and far-reaching. A book of these qualities will undoubtedly be valuable and serviceable in more ways tihan one. B. VARGAS, Secretary to the President. JORG E

MAJOR

GENERAL

PAULINO SANTOS

Chi'f Of Staff, Philippine Army

MESSAGE OF MAJOR GENERAL PAULINO SANTOS ILIPI NO youths have gained and are fast gaining a broader outlook of the ir duties and responsibilities as citizens through the operation of the National Defense Ace. I believe that our military preparation can teach the young men of all classes more abom sport, hygiene and out-oE-door life than loads of books could! The bunch of young boys who readil y leave their homes to render service to the colors cannOt fail to give our people greater national consciousness. When twenty thpusand young men a.re graduated from our camps every six months- hale, sturdy and supple, surely the hard life in our cadres must convince the public [hat their health has been greatly improved by ir. We are indoctrinating OUf youch a practical and cultural education in economic democracy. We are instilling in their h ea rts and minds a professional courage and loyalty v..arthy of emulation by future generations. A nation of pessimists is sure to breed in the minds of its young men and young women that cancerous and demoralizing apprehension that they are not as str0ng and as resourceful as the youth of other lands, who are brought up in an atmosphere VI/here equality complex drives away every strain of defeatIsm. The realm of independence may indeed impose numerous sacrifices and heavy financial obligations upon us , but the way to national recognition for the greater happin ess and the grea ter glory of our RACE already lies open , and we roust follow the trail for honor , for duty, and for country. PAULINO SANTOS,

Chi'f of Staff, Philippi", Army.

HON. ] . H ERNANDEZ

A,tditor General

MESSAGE OF HON. J. HERNANDEZ BOVE a"ll I wish to congratulate you for the happy idea of publ ishi ng a co mprehensive book coverin g hiscorical , soc ial , educatio na l , economic, financial and govern menta l matters on presenc-day Philippines. Now t hat ch is coumry is just ente ring the portal of indep<mdenc ex istence, at least jrs Oriental neigh bors and some of the Occ idenra l count ri es, may cake some imeres( i n know ing more of the cond itions of this new commonwea.J~h. Statistical da.ca a nd informational matters concemin ~ th e Philippi nes are indeed abundant, but unfortunately these have never yet been syscemarically compiled and arlian,~ed in such form as to be readily available within rhe compass of a sin g le vol um e. Yours is indeed a signal service to this country and it is hoped that the book would serve nOt only as a source of reliable information on Philippine matte rs bue also as a means of bringing fuller understand ing bcn'l'een the Filipinos and t heir American and foreign ncig hbors.

HER NANDE'I,

A"ditol' General .

C0RNELIO B ALMACEDA

Director of COlllmerce

MESSAGE OF CORNELIO BALMACEDA ' ., • ,,","" ,,, m,

wm,'.

w.,. "'"' ",<om, '" "rn' ••,."

message for the Commercial and Industrial Manual of the Philippints soon to be published by yo u. Everyone interested in [he , progress of Philippine commerce, especiall y w ith other countries, wil1 heanily welcome a publication like yours which w ill bring to the attention of the people and traders in various countries interesting facts and dara about the Philippines. l

The Philippines is becoming increasingl y important to the world economy as a source of varied tropical materials so necessary to the industries of many countries and also of artic\cs of Philippine manufacture that have won patronage and popularity in the world mar ~e[s. The Philippines is one of rhe leading sources of copra , coconut oil, desiccated cocon,ut , and other products of the coconut industry. Sugar is another leading export of the Philippines. She supplies the world \;v ith the famous and unrivaled abaca fiber, the ,est hard fiber material for (he manufacture of cordage. \Ve have tOo the famous Philippine embroideries and bllntai hats and rh e far-famed Manila cigar, a favorite among ~mokers the world-over who have had the opportunity to enjoy its delicate and sadsfying taste. More recentJy, the Philippines has attracted world-wide attention by its increasing production of minerals especiall y gold and right now the gold industry is occupying the center of the stage in Philippi ne investment field. Various other artides of commerce that could satisfy the wants of world buyers. and which are characteristic of a tropical agriculcural country endowed with the rich soil and tropical climate that we have in the Philippines, are being produced h ere in increasing 'luantities. It only remains, therefore, to let the world know more of what it can get from the Philippines, and I sincerely hope and expect thac the facts and information gathered by you so painstakingly to be embodied in this Commercial and Industrial Manllal of the Philippims will contribute materially toward this end. I therefore wish to commend your efforts in including (he Philippines among your set of publications intended to transmit to the commercial world useful and interesting trade information. The 1JJtI1l1tal will serve as a handy reference and guide to traders who may establish business relations with the Philippines . CORNELIO BALMACEDA,

Director of COlJlmerce .

)

. . I

'. l \

ATERIAL contained in The Comlllercial and 1Ild,lJfr;al Manual of the Philippims is the result of several years experience and many hundreds of personal interview~ with the executi \'(:5 of Governmem departments, associations, commercial, industrial and business concerns gathering first hand informacion of various kinds of which the present ~11I((11 is composed. This data is believed to be timely and representative of conditions as they affect the econ:Jmic life of the Philippines at the preseOt time. In compiling the Mal1ul'll every courtesy. assis tance and consideration has been extended by aU Government

officia ls and executives.

The Publishers also wish to acknowledge here the constant helpfu lness of the Bureau of Commerce, its Director :tnd depllrrment heads, whose cooperation in obtaining d:tta and material, as well as many of the signed writings contained in the Manual, speaks well of the development and progressive policy of the Bureau, and its representatives in the Provinces. Acknowledgme~ of sources of material, toO numerous to be included here are set down in footnote style throughout the pages of the Mallual. Messrs. Hair & Picornell have generously permirred the incorporation of balaQce sheets from their Mal/ualof P!Jllippme Securiliu. We are indebted 3.lso to the nrious Governmental and business executi \les whose messages and articles express for us rhe true Filipino poi nt of view on conditions and rhe construction program of the Filipino people. Executives of Manila Dailies and Periodicals have ~onrributed generously in material and suggestions for the effective layout of the text.

It is the hope of rhe Publishers thar this Montlal wiii contribute toward the better understanding of rhe aspirations and accomplishments of the Filipino people and in particular to the serious and expansive program of the Philippine Government for the de\'e!opmenr of the Philippines inro a powerful and independent country which shall take its place in the family of nations and leadership in Oriental affairs. Tbe Commel'cial rI:J' Industrial MaTtual of rbe PbilippintS is to be an annual publication. Suggestions for future editions will be most welcome as it is the aim of the Publishers to create in the Mrlllllat as complete and comprehensi \'e a reference book as p0ssible, devoted to the development and progress of the Phi lippine people. It is realized that in a publication of this magnitude errors and discrepancies must occur although serious effort has been made ro verify information and d:lta and publish same only with rhe knowledge and corrections of the firms and parties concerned. The publishers will greatly appreciate having their attention called to any omissions or errors which will gladly be corrected in the next edition.

It will be noted that some ofrhe articles 3re not quoted in their entirety, due to the fat[ that certain of the passages repeat subj..:ct-matter :tppearing in other articles and fN the sake of brevity the Publishers ha\'e reluctantly shortened certain ot the articles. PUBLISHERS

INCORPORATED.

TABLE OF CONTENTS FOREWORD ~:y SECRETARY EULOGIO RODRIGUEZ

BIOGRAPHICAL SKETCH L. QUEZON

P RESIDE N T MANUEL

VICE-PRESIDENT SERGIO OSMENA

MESSAGES FROM 1vlANUEL

A. DE L AS ALAS, SC6retary of FintlllCe

QUEZON ,

H ON.

President of the Philippi1lc!

HON. EULOGIO RODRlGUEZ,

SERGIO OSMENA ,

Secretar)' of Agriculture and Commerct

Vice-Presid;mt of tbe Philippine.! H ON. GIL

H ON.

MONTILLA,

J ESUS CUENCD,

Speaker, Ntlti~"al Aucmbly

Secretmy of the Department of Public Warks and. Cotnrll1micationJ

HO N. RAMON AVANCE NA, Chief jttstice of the Supreme Cottrt

H ON. RAMON TO RRES,

Secretary of Labor

Secretary of lustice

V ARGAS, Secretary of the President

HON. ELPIDIO QUIRlNO,

MAJOR GENERAL P A ULI NO SANTOS,

Suretar] of the Interior

Chi'f of Staff, Philippine Army

H ON. JOSE YULO,

H ON. J ORGE

H ON.

H ERNANDEZ,

A11.ditor Gmeral CORNELIO BAL MA('EDA,

Director of Commerce SECT I ON

O NE

P AGE

THE EARLY PHILIPPINES ..

CRBU SPANISII CoLONy-PORTUOUESE AND BUTl511 EXPJU)ITIONS-SPANISH CONTIIOL- A MRRICAN CoNTROL

Es-

T ABLlSIl\lO-E VI!NT! L£AOINO TO TIIB mMILISIIMENT OF TII\I COMMONWB .\LTH OF TIIB PIIllIPPINES-PHILIPI'INE COMMO"'WBA LTII

INDEPENDENCE MOVEMENT. 8/1 DlI.

EUFROSIO ),1.

ALII'. I'll. M. LITT. 0 .. Pr{J/c"{Jr o/Ihe Uniur,i/ll 0/

4 S~nl{J T{Jm~.

and lilt L./rgn Colltllt.

INAUGURAL CEREMONY OF THE COMMOl\'WEALTH OF THE PHILIPPINES. ................. .

(Con dnued )

P AGE

SIGNIFICANCE OF NOVEMBER FIFrEENTH ........ . 8" JOII<JI:

VARGAS, S«rdtJ'lI to /I"

I'Nri"~"r .

THE AIM OF THE COMMONWEALTH . P IlESIDUNT QUEZON EN'UMBJlATBS OUTSTAN DI"G W01l.X: 001"11 BY TIIII NBW GOVEIISMBNT-"""Govn,NMIINT REOIlOAN I U,TION-ES GLiSll

L "NODAOII BAS IC-ON .IA,,,NI!SB RELATIONS

LONG-RANGE ECONOMIC PROGRAM. P IJIL IPPINJl GOVIlIINMBNT 1$

QPBR"Y IID AS TO ENAIILB T II II COUNTRY TO /l B h <PB PBNOIINT AT ANY T I MB, SAYS

P RBS I DBNT QUI!ZON

FIRST YEAR OF THE COMMONWEALTH HAS ADVANCED GOOD GOVERNMENT .

OUTSTAN DING ACHIEVEMENTS OF THE COMMONWEALTH OF THE PHILIPPINES DURI NG ITS FIRST YEAR.

XXXIII INTERNATIONAL EUCHARISTIC CONGRESS IN MANILA.

REOR GANIZING THE PHILIPPINE GOVERNMENT . .

BII J&5U8 Z. VALES'O&L.'. C .. mm~r";,,1 A(}cnt. Clritl. PublicilJ/ Sedi,,", BurCllU 0/ CO"''''tru.

/JIJ ~: L IA B G. COI<POR.,L. ColI,o~ 0/ Law• .lUlU" de M"",'/a.

MlnUEL Ul<~O:'''

/IIJ

Ch(J.irm"". G".crn menl Surrlll B()(Jrd.

FIRST STIIPS TAKeN By T II Il BO,\IID

DEPARTMENT OF J USTICE .......... . .................. .. ............ .

Till! SeClleTA"Y Or.jUSTICE-AoMINI$TRATION 0' JUSTICE-TilE SUPIIIlMf. COUR......-JORI5DICTIOs-THIl CoURT 0' A'PIIO\LS-jUR ISDICTION-TIII.

Cou ..."

D. FlIl$T II'STANc_TnE JUSTICE OP TnE

PE~CIl

COOIln-TUE COUIlT or

II'lDU5TIlIAL RELATIOS$-TIIE BUIlEAU 0 ' JUSTICB-T nE PUBLIC SU\' ICE Co~IMISSION-T"E BUIIEAU 0 ' PRUOI<o1iT IIII GBNEIIAL L AND ~G\STIIATION OPrICB-TnE SBCOIUTII!5 AND EXClI ANGI! CoMMISSION-Till! Dlvmol<o' 01' hIVBSTlGATION-Tu l! COIlI'ORATI! CoU""!!L DIVISION-TlIlI AI<o"fI-U5UR\' BOARD-TUI! PROBATION OIPlcB-isDBTERMINATI! SBI<o"fBNCE LAw -

T ile BOAkD OF I NDBTE.I\~flNATB SBNTBNCB-

PROEATION

FUNCTIONS OF TH~DE PARTMENT OF AGRICULTURE AN D COMMERCE .. . . Hu

I,h,OGlO RODlU01J&Z

S'~"U"y OJ

, 1 1I... ~"I1"" /I'ld

Co",m~'ee

NATURAL RI\~OU R CBS-A("'IC LTURAL DBVBLOP \I IlNT-SCIIlNTIPIC .RI!5BA!lCII-CO~'MilRCil

PHILIPPINE NATIONAL ECONOMY ... TIIB EXTRACTIVB !NDUHRII!S-PIIILlPPINE OVBRS!!AS TRADE-oROBIlt.Y EXPLOlTATION 0 ' PUlLlPPINE NATUUL RBSOUIlCBS-WBOR AND CAPITAL

THE NATIONA L INFORMATION BOARD . .

INDEPENDENCE IN 1938 OR 1939 UN DER CONSIDERATION.

GrD.p~ic-Jfor.~

e() !h, 1fJ3'1,

Cor.l:MITTB!! OIlGANI:/;l!D T O H AND LE D BTAILS-PROSP!!CTS CAUSB SLlG lI T TBNSION-TuE POSSIBILITY OF AN EARLY i N D QPBND.I).NCB-W ASIIINOTON CAN'T H BLP-WA y OU-r--RIICIPkOCAL AGRBI\MtiNn- PLANS AVP£CT1l1)-

THE JOlNT PREPARATORY COMMITTEE ...

.i 8"'_j ,1110./1/'''' oj the /fj,JCO,icnl. P"lili(D.1. Eeo""",i. 0. .,,1 Sociol Bockll,,,,,"d. fubm ilW/ by I/orry B. 11 .. ,,,,". II'afhillolo", D . C, U, S .. Rcpru~lIror"'" Philipp;"e SUllnr AUDCI'""'",,, A~urR I CA N GROU_PlII UHINH G l o u _ H ISTORIC BACO::OlOUND-EAItLY UVIL GO"B RNMBNT----CoMMBRCIAL RBLAT IONS-FRBB T RADB-BBNI'lno. FRBB TRADB-oFPIII.S O. INDE.ENDENC'B-THE F IIlSTOUIR - THBSICOND O"IlR-A SIONIFICANT H ISTORICAL FACT---De VBLOP~I RNT O P TUB SUGAR INDllnRY- !MPOIlTANCIl To NATIONAL EcONOMy--CooPEIlAT IVE SYSTBM-MAIN EXPORT"""- I N"'B$TMIlNT-N BW T "EOIlY O. CONTROL-PlU LI""IN8 QUOTAS -RBPlN"E D S UGAa-I NT.I).aNATIONA l. SUGAR .'\oaEIlM8 N T-GIlADUATBO EXPORTT Axrs-R.!!PoaT By TIIB PIIILIPf'IS.!! SUOAR Anocl ATION B E . 01l1l T II 1I Jon'I T P RII'ARAT ORY CoMM ITTEII ON PIIIUPPINE ArrA I r.s-FUNDA)'ENTA!.S OP P "ILI ~PlN1I-AMIlRICAN TRAUII RIILAT IOM

THE ULTIMATE DECISION . "H~rald

" "'a rch l alh, 1!l37, EdiIQr;,,!.

WHAT HAVE AMERICAN INVESTMENTS CONTRIBUTED TO PHILIPPINE PROGRESS?

55 57

PAGE

FRENCH INVESTMENTS IN THE PHILIPPINES. lly LEOI'OL!)O le,,,/'t, l'u' ('/eM. i"rell ch

Cha",b~~

of Comm erce o/lA t Philo'PI"''''''

CHINESE INVESTMENTS AND THE COMMONWEALTH .

8 /1 ALFON SO S rCI~. l'ruil/( "" PMlippj" c Chi,,(u GM t'''/ Ch"", w r 0/ Comm~rrt.

C"'NUB

INfLUINCII

THE JAPANESE INFLUENCE AND THE COMlYIONWEALTH .

PUBLIC WELFARE WORK IN THE PHILIPPINES.

8 11 :X[AS. A" u><" o" A .

P&RE~.

Knell' i cc Sccrt /(Jrll . .-hloc iolcd Clu.r,',I...

SCIENCE FOR THE NEW COMMONWEALTH . Ilu .\[AN tI >:!.

IlQX.\s. elll1i"",,,,. Nali(t""/ Hu e"rc/' Cou"ci/

Wn TAl.." AOOUT PLANNlI<{O- SOI.\ INO ECONO\llC PROIlLl!.~I~ PRO~I l"IlIlSWlVIIl.C!I<IIII-TU ll MI!TIIOD OfSCII1NcrSCIIiNCII AND POL1T1 C$-SO~l e IMPORTANT NATION" .. PIIOBLEMS

THE ARMY' S PART TN THE ECONOMIC DEVELOPMENT OF THE PHILIPPINES. TilE FII.IPINO

1111 ;\[.\JOl< Gt:~路': II.\L ~DlBU-C" A RACTI!R Of

AND STAPf 5\"$1' M-

Chi ., (J/ &uff. PbiU/I/"'"c

PAULINO SAl<TOS. OUR

PkQV1DING AN QpP[CIIR

,I,"'Y.

NATIONAL DI!PIINill SnT IiM - SUMMAIIY Of PROORI!$S--COMM",,路O RESllltvll OPfICIIRS' TRAINING CORPS-PRIIPARATOR\'

CORPs-TuB

MILITARY TRAIl'll G UNITS IN HIGII SCltOOLS A"O ELllMI:NTARY SCHOOLS- ORGANIZAT ION AND TRAINING OF Till'. FIRST REGULAII D l vmON - OIlGANIZATION AND FUNCTIONING Of Tlill TRAININO CADRII$-VOCATIONAL TIIAINING

CIVIL SERVICE UNDER THE COMMONWEALTH . . 8 u JOSE CIL, C,,"'mi楼.ion f r 0/ Ciril

THE NEPA AND THE COMMONWEALTH .. r B II E LISI:O Q UlIU:S O,

l\fa~aQ"'"

NoJ.io~a/

.')~r<i ~~.

.............. .

EcoII".ni'l Prol<d iOtOi" " A .."dalioll ,

GREATER HOMII CONSUMFTI ,.;:--QROANIZATION A:-''O PU RPOSli-

lojlIlMPIlU-

BoAIIO OJ' DIIII'.CTOIIS-

HONOllAIIY

BOAJU)

PROBLEMS OF THE COMMONWEALTH. 8 /1

Jou; L .

CELESTE. E;uc wl i<~ Sur~/(Jrll, .Vali(JI".1 EcoII"n..-, ('"wll ci/.

FORIlION E CONOMI C PLANS- AoIlICULTUIlIl-hoIlICULTURAI. CRliDlT--M.,I.RKI!TINO-FUTURIi Of hGRICULTURIINIlIlO POll b ' OU 5TRlALIZATION-GOVIIRNMBNT hID-I ND USTIl,lliS BOARo-SCARCITY OJ' CAPITAL-FoIIBION TRADE -PIlOTliCTIVE TARIPf- CURIlIINCY PRO Il LIL\f-CURRI!NCY AU T ONOMy- NATiONAL ECONOMIC CoUNC I L-ExBCUTION -

F'NANCINO-

NUMI!ROUS PlloJ=-NDC PR OJECTS-GI!NBRA L POLin'

THE RURAL CREDIT SYSTEM IN THE PHILIPPINES .

PURPOSE AND SCOPE OF THE COMMONWEALTH SECURITIES ACT.

Uy 1I I IOUIlI. 0, ).U"A, Cl<i~/, 1'rade Rel/w/alioll Sedi"", IJ\lr~a\l 0/ Com"'t.ct.

WlIAT [ s S& CUR ITy )-

SUM M AIl\' OP IMPORTANT PnOvlSIONS-How TUB LAW WORKS-

LIMITATIONS Op T UB An-

BEN BFIT$ To BE D lilllVED

CONCLUSIO N

REVENUE SYSTEM OF THE PHILIPPINES. nu A ,

Dt: '-'IS ALAI!.

Secreta'lI O/I'",allU,

REVBNUB FROM TAXA"J'ION - I NCID8NTIll. R SVI!NUe-E AIlNINOS AN'D C>rUBIl CRIIDITS-50URCBS OP INSULAII \'liN'UBS- LoCAL RlivIINun- TIII: EXPORT TAx-A BALANCBD BUOOJ!T

RE-

CENTRAL BANK NEEDED TO CONTROL TRADE

Finonu . D. "n, ColltUt o/ Bllf in . .. Adm.",',/,olioll, Un,' r~.jt/lQ/ .I/~nil(J. i mUL" R TRIl ASURY 1$ I NADBQUAT ! TO MAN'AOIl CUIlRENC\' SY$Te~. or THB PIIILlrPINI! COMMONWIIALTK-Till: EXA ~IPl,li or EN 0 1-4ND

IJ/I A:SD.I>:" \' . C

'~T 'L!.O,

T cchll ico / A driur,

D~ji<lr1m~nl 0/

THE NATIONAL PRODUCE EXCHANGE. IJ/I

COI\:S':LIO BAI.)d ,<C t:DA, .1c1.ng .I/""ogrr.

hs FUNCTION AND MBTltODS or OPiIRATJON'- How TO TII.ADB I'" TUE EXC"IIAI<OE-B.OKBR', CO MI><ISSIOI<-TltJ! OLD MAIIKI!TII<O SYSTeM - A CB.>:TII.AL MAR>::liT-KtNDS OP TR.ANSIICTIONS IN TIIB EXCIIAI<OIl- ILLUSTIIATICI< OP A PRODUCli' SIII,I..INO F UTlJRB5- SALES T AX EXJ!.'tP'TION-INQUtR'ES INV ITBD

P AGE

PHILIPPINE TOBACCO INDUSTRY IS COUNTR Y'S BIG SOURCE OF REVENUE. ......... Ed,',,,,, bl/ Do"n<oo U . l· ... ou lluo .. :< oflh H"T~'u of PI4", bWtu/r1/ ,,,,,I N"I'"""I Hu toTtli. Co ", ,,,,,/ of/ht Ph ilipp,,,. ! j/,,"d••

287

I.--CULTOIl6- PIIILIPPINII LII'" TOIIACCO P .. ODUCTION-Typ!lS R ..ullo-Con OF PIIODUCTlON- I I . -MANU".. CTUII£ -M .. Nu".. I:TuaJtD PlloouO'S- R .. w M...TIIa l .. L5 USBD IN THII M .. NUF.. I:TUIIII OF TOBACCO PIIODUO'S-<:osn or M... NU"..cru.r-I.- C,o .. ltrrra- 2 .--C,G ..as-PaODUI:T,ON 0' MANUFAI:TUItIlO TOBAcco- l l l .--COmuMPTlol'o'PIIOOUCTION OF TOBACCO PaoDuO'S- IV .-Ta"'DII-PlIll.ll'PINli TOB .. cco EXi'OlI'J""'-PmLIPPlNlI TOB .. CCO blPoRnLaAp TonAcco EQUIV .. LIINT OFTollACOO PRODUO'S ExroltTIWTO THIl U.S.-V.-RIlAl. P . I.- U.S . T It ... D£ B"LANCIl - FOR TIIII UNITal) ST ... ns-- FoII T II II PHIUPPINIIS-TOT"L U.S. TOBACCO hll'ons- U.S . TOMC<:o DUTlES- El'ncT 0' McDu,.,ul- TYDINOS LAw ErPQaT T "'X!IS Uro,,", TIIII P UlLIPPINII TOII .. cco T ""011 IN TIIII UNITIIO STATIIS- VL --CONCLUSiONS ... NO R£COMMIIN'DAT'O:-'S- V U .-ACD<OWLIID(lJ.lIINT

ECONOM IC ASPECT OF THE TOBACCO IND USTRY IN THE PHILIPPINES. 1Jv Jo .. ~

293

nA)' OS. •i u i".... ' AO',ollom' ll. Hurto" I>f PI,,,,, J "dlUITV.

TIIB ANNU .. L El(CISII T"X-SUIT"'II'L,TV Of TUII PIIILlPPlI<i!S PO .. TOIIACCO PRODUCl"OI<- TAIILII SnowING TIlIl PIU LIPP,NII b'POlln OF TOII ... cco PRODUCTS, 19}1-1935-P RBSBl<, ST'ATU5 0 ' THII TOB .. cco INDUSTRV IN THIS Plln.· 'PPINES-SO~flS P RODUIM$ OF T II II TOb ... cco INDU'T RY I N Til li P III L1PP'NlIS-OvllR P RODUCTION OP CW"'R FILLIIRHIOIl WT PRODUCTIOI<- IN"'OIlQU ...TII KN'OWLIIDO Il ON' T ill S TyplI 0 ' TOBAcco- LoC"'L C'O"RIITTES HII .. V1LY

T .. xoD-SuMM .. RY

ABACA-YESTERDAY AND TOMORROW .

IJv ANTOS'O V., ~~r.'o. Vice-l'raide7ll. I'hiIiPI)i"c f·'/.~r l'rrxJ..«. , lfl c.

299

RAVON·AoACA-AII"CA FOURTH AMOI'<O PHLLIPPlNlI EXPORn-CORDA(i1i QUOT'" POll 1936-1937-PH, LLPPIl<E CoRD ... OlJ, E;CPOR~ PIlO,", 1925 TO 1935-BRW HT FUTURII S IUIN FOR A1IACA-PIIILIPPINIlCoRO"GII QUOT" F,tLED IN U. S. - AB"C'" Cwru F... CTORY TO Oil EST.. BUS IULo-AIIAC", CIIN'TR ... L IN 0 ... CITV EII."OIC..TION' 0' BUNDLE DI5B ..u - Ao .. c .. CON:rR"L FROIILHM,--QRO"N'UT,ON OF CooPISR ... TIVII AUOC'ATJON- GOVUN'MEt-T MuST H f u R ESOttITlOI<S PASSBo-M ... CIIINIl DlI!qulI~o-1>4,4<O.((O INVa1MENT-DEloIA:-"D Nllw DEAL - TIll! .luLOus

",,0

INOUSTRV-

AII .. c ... EXl'IIR'MBN'T"'TION TO liE EsT"BLISlIBD IN AUUVCG

COTTON AND TEXTILE INDUSTRY ................ . .. .... . U;\TKOAO'O ;\liLLOll",

Chid. Rawrd. S cd iu. Ilu n au 0/

Co","'~rcc.

307

OUR N"SCIINT TIIXTIU INOUSTav-N£llo POR TBXTU..B M ILU-DIIVIlLOpMB.", or Houn lioLO I NOUSTRlIIS- Dl s· TINCTIVII PIIILIPPINB C LOTIII;-it.OCAN'O CorrON CUITH--l\101L0 CLO'TH-PROlIOTION'AL MBASUILES N«ess .. ltY

PHILIPPI NE COTTON FACTS AN D FIGURES. Ill! 1I11_,RIO" S. SIt_'YA:<. Dincl", 0/ PI"nl r "d" .'rll.

310

POSS'IIILITIES OP CorrON INDUSTRY IN' TUII PHJLIPPIN'8S-PIIILIPPIN'1I IMPORT.. TION 0 ' CorrON "I'<D ITS M .. :-,u· , .. CTURi!S- LIM IT INCl F... CTou IN T n E Success 011 FAI LURE OF PIULIPP IN'1I GROWN CorrOI'<- COMP ..... ... TIVI! YIELPS, P. 1. \'S. U. S.-CorrON·OROW II<G RI!GIOI<$

U. S. LOSES COTTON TEXTILE TRADE. BU'JlSES!! .""0 Fu< .. "c ,:. /IInreh, 1037.

TWO IMPORTANT INDUSTRIES PROMOTED. 1'rill",,,). ;\I nrd' 17th. 1937 .

312 313

N ... TI V II TEXT'LIlS TO DO IM PRovBO-COrrON' Y"'RN' F ... CToRY"IO 1111 EsTAII L1SIlBO - /'.'1"'Rcn FIOURIIS 45 PUR CEt-, GRIIATEK T Il "N T HOSE roR FIIII RU .. llv-T EXTILIl E xpBRT--FURCIlASH 0' CIIIN" CorrON UIIOHo- RAl5I! CoTTON rOIl,lAPAN?--Co", pLJ, ll.rn O F U, S. ON T""NHmPMIINT O. GOODS AOJUSTBo-U RGi!S P. I. TO R .\lSB COTTON POR ,1""'NUS6- RIICI PIIOCITY WITH P. I . URGBo-CO"nON SPINNI NO- INOUSTRI" L PIIOBLIIl>' - M .. CIIl:-· ERY NIlISOBOTRANS·SIIIPMUN"I'S 'ROM HOI<OKONO MAKII P"CT QpBR.AT. ON' DIPFICU LT--LIMIT... TION' OIPPICULT - QUOT" Ex. CIIBOIID- R"vON I MPORTS-SyClP UKGI!S U. S.-JAP"'N' AGIIElIloUlNT RIIG ..... D I NO P. I. MARKlT

CEMENT INDUSTRY IN THE PHILIPPINES............ . ...... . .. lill

s. n. r ...TCK:<O. of '\[0,1"00/

321

.f: C.. mpoRI/--{)""' .... afld Opuol,,,. of lI i : o l CfMt,,1 J'u.;IUII.

SANITARY CANNING AND PRESERVATION OF PHILIPPI NE FOODS.

323

iiI! ;\I,,:<UI:L I.. ItOx.-.fi. Ch .. irm .. ". No.lio" ..1 n ..earch C o "n r i/.

DEVELOPMENT OF THE PHILIPPINE BEER INDUSTRY.

325

,lAPANRSfi BIBa FACTORV-PltOTBST ATTEMPT TO R .. I51i D UTY ON BElli

COFFEE: A MINOR PHILIPPI NE INDUSTRY. V,TAL ST .. TI$TIC1i ON P " ' LIl'P I ~E CoI'. ~1!

326

P AGE

328

PHILIPPI NE FISH INDUSTRY. 811 HII,.,nIO A. !tox.,s.

CM~f.

Fi." and 0""",

Ad""·,,i.!r~!io". lJ",~"u

S~jenc.

GOVERNMENT ACTIVITIES IN THE PROMOTION OF PHILIPPINE FISHERIES. 8 /1

Ot:OGfUCI.U

V. VIl.l,..,DOLID, Full "lid

Ga",. Admin;. ,.,,';on, OurCil" of St-i.nu

329

h,POIlTANCB 0' F,SH ING bIDUSTllV--GOVER""!II IINT INTBIJISl'--F i$ 1I AND G"ME ADMINIS'U.AT I DN-CoNTIlOL OP FI5I1BUII$-FISII F"'R~,,- FISII COLLECTION-FISHING INVIlS'TI(iATlO,,"$- PRODUCTION 0' NBW SPIICIIIS-F' SIi ING MBTIIODS-Fml PRIlSIIR\'ATION -PARA~AQUE'S FI~ " I NDUSTRy-P" n .IPPINB BUTTON PRODUCTS-WH.!. NATIQNAI.1:tB F,SHIIRIB$

FOOTWEAR INDUSTRY IN THE PHILIPPINES.

333

THE RICE INDUSTRY- THE NA RIC AND THE NATIONALIZATION OF THE RICE INDUSTRY.

334

RICE AND CORN COOPERATIVE MARKETING .

335

THE PARADOX OF THE TOBACCO INDUSTRY.

337

1111 VI~"TO" Il Ut:N C,","NO. ,u""aq." 1'h. NoI.i"",,1 fUu "'''/ COrti C<>",O'<lII"",

8 /1 M"suc!. V.

G"LIJ~(;O l>m'·dD:~.. "~,:~~I::";~~t'f::~hi\i~-;::!"'V;;k~Px~~~:,ells~r~i3i; connection with the Tobncco

PR~B'NT MIINACE TO 111? M C<:o INDUSTRy-MANILA TOBACCO AS50Cl"TION R~-Eucn OrI'lC!t.u- TOMCCO WARIiHOUSISS-

NATIOS AL TOB(>CCO CORfIOR "TION

339

340

PHILIPPINE FURNITURE INDUSTRY 811

Gu. J, PonT

341

TRANSPORTATION. PROP05A L TO START P.

MU CUANT

M"RlNE BOOH TO I NO\JITRy-PUBLI C

SAVING ON FREIG HT CHARGES . BII JOSE ll. I.IBUl<AO, TrnffiG D~,,"r!menl. P "CKINO 0' MBRCItANDISB- PUILIPPIN"B TOU~ I ST BOOM S J>BN

M"r

Buy STOCK

341 M anila Hili/road Comp""I/ .

MOTOR BUS TRANSPORTATION IN THE PHILIPPINES

342

811 .. Illy. C. G. AI..,,,r DAVAO P ORT HAS BRISK MARITIME AcrIVI T IIlS---COU MBRC!t.L hV!t.TlON

SIGNIFICANCE OF THE "CLIPPER" SERVICE.

811 J on; R . ,\Su."G. Junior Commercial A,,~I. BM'taU of Com"'tre ••

TRAl<S-OcIANJC P~S5I1NGER AIR SERVICE "CLIPPER"

LAND AND REAL ESTATE REFUND. DoWNWARD RBVI510N Of LANO AnESSMENT WILL

344

is SUCCESSruL

HBLP LAND OwNBRS- CL05B CoT~B"TO TO EXPLOITATlOS-

347

T"R8E BU I LOINOS HOUSING WaLL- K NOWS CoNCIIU."'S C UANGB H """"l)5-

THE PHILIPPINE LUMBER INDUSTRY .

811 FLORf:"CIO TA">:lII ~. Dirulm oj Pore~lrli.

U . S. LUMBBR, Loo EXPORT1i .. N O I MPORTS GAIN IN 193i$-Lu~I IISR R""IU F IPTH IN CAPITA L J"' VB~TIID-COMMIIRC/"L WOODs-DIPTIIROCARPS- LA u .. m-A pI TO"-"G-GU IJO - YA,,"L - PALO$APIS·M .. NGAGCHA-

LUMBeR EXPORTS~u l -LEOUMB$

349

P AG E

TELEPHONE DEVELOPMENT IN THE PHILIPPINES.. 81/ J . E . II . STEVENO .... Ge"vo ' .lfo~tJQer, P}'ilippi"~ Lo"y D i.'" nu

TrI, ,'ho,,~

353

Co mp""11

DEVELOPMENT OF ELECTRIC SERVICE.

354

PHILIPPINE MINI NG INDUSTRY.

356

FOREIGN MARKETS FOR PHILIPPINE ORES.

362

111/ I.U I8 J . B OI"A. Phi/ippin~ A ..""i"lio ll of ,I[(da"ieot ",,,I etcd'i~1I1 EN II""c'~,

1111 nAl.PI! KeELER, M i,,"~o h'difo" ,l/o "il" Do l/l/ 8 " /It1i,,,

BII A. I·' .

DU(]OLEH Y,

FUNCT IONS OPTflB B URBAU OP Mn'IIS-

Vict-Pru Men!. Bc" o"d C,m.olidnlcd ,lI i" ' ''fJ Co mp" ,,'1.

PIIILl PP' KB M IKES A MONG LBA DING WOR LD P ROD UC IlRS

MINING INDUSTRY , ITS IMPORTANCE TO BUSINESS AND GOVERNMENT. . BII J. H .

,1{R" "''''' ,(; CO"'l'i"'fJ,

i\ I AI<S>lA" . P.rn id6ll1.

365

FBW COMPAN I ES SUR VIVE- B uS I NESS P ROPIT PROb! W ASTe-STBA DY GROWTU OF P ROOUCTION- 4 2,OOO, OOO PO~ 1 936-Gol.o B UI.LlON P RO O UCB D IN T II B PII!I.I PPINIl ISLANOS- P . J. GOLD M INI).! Low G~ADJ!.-O\,IIRlle A D TOR GOOD AND B AD CRo_M IN I NG CoN T I N UOUS INDUSTR y - M ,N , NG TO SUPPLANT S UGAR ?

REVIEW OF rHE PHILIPPINE MINING l NDUSTRY. BIJ

R",.,,,,

Q UIU ICO A. An,\Oll,!..\ . D irCd"',

369

vf .l/ i" u.

GBNBRAL SURVBY,. 0 ' T II B t-,.[ INI!RAI. R P.SOURCIIS - M oUN TAIN PROVIN CB DI5TRICT - TIIBCAM ARINBSN o Rlll D IST~l(:r-T" B 1\V,1 ll ATB D'STRIcr-TIIB SURIOAO D ISTR l cr--Z AMBOAN O A- TIi B BUl.A CA N D15TRl cr--PIITRO Ll!"U~1 ASPIl AI.T AND RBLAT BD B IT UMIlN$-ASBI!STQS-GYPSU~I--M IN E RAI. \VATEU- GUANO AND P" QSPIIAT E R OC K --SUL""U Il-CEM BN ~CLAY PROD UCTS- L IME- STONB, BUILDI NG AND ORNAMBNTAI,- GOI,D : PIIILIP PINP.S' H o pB - P UIl.IPp'NB SB1.1, S IL'II;BR--(;IlROMll AND MANGA~'p'sB-M ANGA NI!SE ORE- CUllOM IT}! O RI!- G "' I,ENA OIl E-" LB ... D

FACTS ABO UT ORE.,. By D. B. P l/1I"'S ,

,l[t1"II~roi,nl E~oi"e"" ,

C<.. looi.u ""d E" vi,,<c'.

SJ/lIdic,,'~.

379 I II' .

DlI"NITlON, T It BATMENT AN"!> TEST INO-DESCIUPTIOK OF VAR IOUI STEpSINV0 1.VBD IN MILI,I NO AND CoSC~S T ..... TlON P I.O(:"BSS or ORES- GOI,D AM ... LG ... MATION AND C YAKIDAT ION- L ABORATORY BATCIl O R E TUT IN OF EW POINT$ ON SAM PLING 'OR A"Al"Il<"G t.1:INBR AL.OQ ICAL M ICRO$COPE - Tile D S p ARTMBNT OF P ET RO LOOYT ADLE or Un r UL MBTAL·BBARI NG M INB RALS Al'o'D T IlBI R CII ... RACT BRISTI CS

CUSTOMS REPORTS.

386

RECBIPTS AND EXPBN OIT unES

SECfIO:t:J"

Two

LEADING BUSINESS CONCERNS ALPHABETICALLY ARRA NGED . 1 HISTORY AN D ORGANIZATIO N - CAPITALDATE OF EsTABLISHMENT-

DIR ECfORS-

N ATI ONALlTY-

A NN U AL REPORTS

ADVERTISEME N TS P age ABOITI Z & Co., I NC •• Aeo) B M IN INO Co., I NC .•. ,

, • 2

A ONo-PLA" lfl BL P LACBR MININO AM"'WAMATBD M INllllALS, INC . AMUO$IO & Co., D. B.. AND TIIM\'.

Co"

11'(:..

Pagc ANO BL P ADILLA & Co. A RAMBUW P I.ODUen, I N C,. A T IILBTI C SU PPLY Co .. ATLANTIC GULP & P AC"lPI C Co. o r M ANILA . •• B .B.B. Y L A I DBAL, INC . .•. ,., ., . B AC(lWD- Mu RCI ... MI I,LING CO., I N C.,.

" 33

" ).

522

Page

SIINX OP TIIII PJllLlPP1NE isU.NDS, TUB .

LUZON CONSOLIDUIIO MINIlS Co., INC.

fiRCK, INC., I..

6,"

LYIIIC MusIC HOUSJl, INC. .

BRNOUIlT GOl.D MINIIS, I NC •• BBNQUET PAMPANGA MINING SYl~DJCATB .

C"L..I~'B"

Il<c.. SUGAR £sTAn . .. ..

CIIRMIILO

8oTliLHO ,

72 79

C"~'II~II SUPPLY Co. ( ADDENDA ) .

" " 'I "

BAUIIIIM"NN , INC •••

S. Co., JOSH .. ' .. '

C""RllIDO , PIIOII.O

USTRO

CHBI) PORT!,." NO CIIMIlNT Co .. CBIlU STEveDORING

Co. ,

INC . .

CBNTIl"!. P " R AC/ILIi MINING

(IIENG SIaNG LAM &:

Co ...

Co ..

Cnu ,,:-: &. SONS, DUI! C. ........ . Co~I.MONWIIALTH

COMMIIIlCIII!,.

MAN ILA GAS Colli>OIIAT IO'" MANILA HOTBL .

304

MA""ILA PUIlLISHING COMPANY . • MANILA RAILIIO"D CoMP"NY. MANIL" STOCK EXClIA"OIl. MANIL" TIIADINO CIlNTIlIl & EXClIA"OIl. MANILA VIINl<TI"N BUND Mro. CO., MAPASO GOLDfIBLD'l, [NC . MARSM"N TIlADING COlli>ORATION . M. MARTINIIZ & CO~IPANY ,.

434 312 314

M8'I'RO OIlUG CoRPORATION. . MIITROPO LIT""J R"DlO CoRPORATION . M INE FACTOIlS, I NC . MIliA H IUtM"NOS, INC. MITSUI BU$$""'" KAISIIA, LTD. MODIRN P IIA.MACAL PIIOOUCT'S Co . , INC., TIIB .

328 329 332

107

M CCULLOUGH PRINTIN G Co .. DB Los RBYES , BBNIPAYO &. Uv .

138

DllvBLoPMIINT5, INC .•

14)

DI)Lo\l<OIlN MINING h~TI!ResT$ Co . , I NC . .

146 1>0

118

DUNLOP RUIJIIIIR Co'iPANL Ov BUNtlO &. Co. , INC.

1,1

E AnsRN DBII~EA FISIIING CollI', EDUCATIONAL DI$"fRIBI)TOII,

1'6

T"I!.

163

ELlZABll'TU ANAccitto" MINES, .

Co., INc . E . E. ELSII/J;, INC.• ELIz"U)E

J68-9

170

Esc"No, MOUND, FBRfA"'DEZ &. Co EVIlItIlTT STBAMJHIP Cob . . . . . . . FBOe!l"TBO MINBII"I.5. I~c. .• FIN""cB & MINING BII0Io.'BR"G2 ..

~~~~~;:;.;:,:: .~. ~~lle.R. ~ •.~. TII~ P~I~~~PPINU: .~ \........

G " IICi", A . . . . . . . GBO<.OGISTS & ENOlNIIBRS SY'I"D ICATB iNC . . . GOLDeN GATII MIN ING ASSOCl"TION GO~IIIA & HIRMOSUIlA . GONZAL.I!Z . . . ..• ....,. .. GOODIIICI! INT2RNATIONAL RUBDIIII CO .. . GIIB"T E.UT2RN HOTBL •• GREGG B Ut INI!5$ COLLBGB ( EDUCATIONAL SIIC'

.r.

TION ) . . . ..• . . . • • • • . . . . • . . . GRIIGG CAR COMPANY ( ADOIINOA ). GUMAOS GOLOPIIlLOS IN C•• GUTIIIIl.RBZ, GUTIRIDGE & BRIMO . HAile & PICOIlNIILL . HAMILTON-BIl~VN SHOll STORE • .•

174 174 181

187 1,1

193

199

20> 20>

ro,

206

207

209 212 212

2JJ

HANSON, DRTH & STBVBNSON, IN C. H21LDRONN CoMPANY, P. HBI$II , LARSON & CoMPANY •. H ILL , R . • HBLIIN'S HOTEL

215 22J 222 ill

HOA HIN COMPANY, [NC . HOUSTON RUIIIlSR Co. , INC ILOILO·NEGR OS AlII EURK5$ Co., INC. h , LIU & CoMPANY, INOBPRNDENT Pu'BLISlIJNG COMPANY . IN5ULAR LIPII ASSUIl"NCB CO., INC ., TilE . INTIIRNATlON AL PAPIIR & GLASS MANUPACTURING

c. .

Co .. K UMMIIR & CoMJ'"NY , MAx •• LA NAVIIIRA FILIPINA, [NC . L A YIIBAN " CO~IPANY, INC. LBOD" CoMPA"Y, iNC ., F . 2 .. LHvy & Co . , S, E . LIIVY HERM""OS, INc LI55AI(, COMPA~ I A i NCOlli>ORAD" . • LUNl<T" HOTIIL . L UZON BROKBR"GE Co .

293 ·4 45 295 296 Xli 302 303

106

COMPANIA l\L.R IT IMA .•

292

MA-AO SUOAII CIINTR"L CoM PANY . MACKAY & McCoRMICK: • MADRIGAL & CoMPANY. MANI L" CoRDAGE CoMPANY. MANILA O"ILY BUUl<TIN, T it s . MANI LA ELBCTJIIC COMPANY. ,.

86 88

103

Co ..

285

Ul 230

234 234 238 242

''""

264

269

274 277 279 281

310

315 3 16 319 322 323

340 341 343

345

MOUNTAIN M'NIl$ I NC. . . N. E. MU U BN & CoMPANY,.

34 6

NATION"L EcoNOMIC SECUIlITY ENTBRPIlI$B INC. 349 NATIONAL G LA$S & GLASSWAIl2 CO . ( ADDBNDA ) . NATION"L PRODUCB £XCIIANGE . N"TION"L SPOIlTING Ce ....,.ER, INC. NEDSRL~NOSCII INDlscnB H ANDBL'!Il" NX , N.V. NI.I!LSON &: CO~'''''NY, INC. NIELSO" &: Co " L R. NOIlTON &. HAIlRISON CoMPANY. N UTRI-B IN PIlODUcn CoMPANY. JOSE OLI VB R SUCCESSOIlS Co. OPISSO & Co., INC . O'RJ,CCA CoNfecTlONIlRY Co., INC.

352 353 354 358 3S8 363 364 365 367

Ov2JBIlO & HALL. . P"CI PIC AUTO SUPPLY &. H"IlDWAIlB Co., INC . P"MPANGA SUGAR MILL'! . ,. PAIlAC~LB·O"GU I T G01.D MINES, INC. PAYNE &. CoMPANY. PAIl;I.C" LE MINING DBVSLOPMIlNT Co., INC. P Bi'lA & L INOOGAN • PIlOPLS'S P.1l$$ INC. , Tile .. PBIlI!<: SA~IANII.LO INC., LUIs . PIIILIPPIN!! AROM .. TIC CIGAlleTTE MA"''"1IPACTUIl ING Co., LTD ,

J6B J69 370 37} 377 383 385 389 391 393 394

P U ILIPPINB PmLIPI'IN'II PHIL/PPINB PIIILIPPIN2 P,ULIPPINII

BUILDERS Ao!!"cY, 1I"c. C""lIlTY SWBBPST"KIIS . CUIlB EXCHANOE , EXPOS ITION, I9}8. F,NANCIAL NBWS.

PIIILIPPINB PIIlLIPPINB PIIILIPPINIl PHILIPPINE P m hlPPINB PIlIL/WINB

MAG"<:INII . 405 hl.INGANESE MINES, I NC. 406 r.v.TCH Co . , LTD. 408 N"T10NAL BANK. 411 N8'I' & BR"ID MFG . Co., I NC., T ill! 4 14 PRIl$$ CLIPPI ...·G BUIlBAU INC •• TUB . 41S

PLAZ" HOTR L, 2"''''BOANO" . • '). Pl"TS & CoMP"NY, A. PROVIDBNT INSUIl;I.NCB CoMPANY . RIZAL COL LeO E,JOSE (EDUCATIONAL SIICTION) , RORN5CII & VALDES •. Roy I NVBSYMS"'""TS & SECUIlITIIl$ COIlP .• SAN AOUIITIN M..INBS, INC. . . . SANTA MONIC" GO LD M,NIl$. SA"''TAM AIlIA & Co., E. SANTA ROSA MINING CoMPA"Y . •

39S 396 399

401 402

420 422 426

436 441 447 448 4>1

Pagc 489

Pag~

454 553

SAVINOIi BANK O. TIlII CoMMONWIIALTII, TIIII ..• S"A.' 8( Co., LTD., C. F. (A DDIINDA ). • . SIIO.DUT MILL SUPPLY Co • Iz.:C" . •• SOllTlIWI!$TBlN ENGINllellNO CoMPANY OF P . INC.

456 I. 461 463

S"1l1G &: Co., JOliN . SUOAIl Nllws CO~"ANY

469 474 475 477

SUyoc-KAYAN GOLD r.·ItNINO ASSOCIATION .. SWA/'o", COLDlln10N 8( Fun: Sn:DlcATII INVUTMIINTS, INC . TALlSAy,S 'LAY MILLINO Co ., INc. TWR WATR. ASSOCIATRD OIL CoMPA/'o"\' T.ANS,PA CI FIC TRADINO Co. TIIADR AND 0lMMIl.CII Dux.;.

480 484 487

(ADDIINDA) .......

SI2

TRINIDAD, CIILUTB 8( CoMPANY

49C

TUAZON &. H'j()$, C. L. P . TUIILI.s . UNION C,IlCOUTION CORI'O .... T ION (AD DENDA )

491

'" 493

Ul'>'ON M ... NAGIIMINT CoMPANY. USIVIIRSAL INVUTMIINT Co., INC . V,SAYAN ELIlCT. , C COM'ANY , S. A. V,SAYAN ELECTR ICAL SUPPLY Co., INC. V,SA'I"AN SORIITY &. INSOII ANC I CO.PO .... TION WRNDT &. Co., LTD., H . A. Wn.sON &: Co., INC ., FRED . YeK HUA TRADING Co.POIIAT,ON .. YUT/VO SoNS HARDWARE Co. ZAMDOANOA MUTUAL BUILDINO

499

S02 S07 )12 )1)

)17

>20 &: LOM':

As-

>21

SOCIATION ..

8ALANCE SH EETS

A ND

Pagc 4 7 9 17 20

AcoJI> MININO COMPANy..... • •••• AONO,PLARIDIIL PLACIIR r.t 'N/NG CO •• AOUIiAN GOLD M,NI!$, I NC .. ALLIANCe ASStI,,""'NCII CO., LTD ,. AMRRICAN EXPR.IIU Co., INC., TIIII. AN'!"AMOK GOLDPI,.BLDS MININD Co ANTIQUII CONSOLII'ATED MINI!$ INC. BADUIO GOLD M,NI1::'O Co • • • . • . . • BANK OJ' TIIII PUILIP~INII bLANDS, TUII BATANOAS MINIlRAL Iz.:c • . . . . . BIINOUIIT CONSOLWATII~ MININO Co. BIISOUIIT EXPLORATION, INC.. BIINGUBT GOI-D M,NES, INc. B,G WIlOOII r.hNINO Co.

" 27 )8

4'54

Co.,

., 56 60 68

B'NOND"N EXPLO."TION, II< BI.ITISII &. FOIIIIIGN MAIIINIl '/'o"SU.ANCII Co., LTD 7} B.'Tl511 TR"DIIU INSUI."NCR Co .• LTD .• 74 C"'LAMBA SUO"R EsTATII .. 77 CIINTR"L AZUCARIII." DI! 89 CII"I.TIIRIIO B""'K 0' INDIA, AUSTR"U" &. CmN", TIlII. . ...... . 98 C,,'I<A BANKIND CoRPOR"TION 100 C'IINA INS OR"SCB &: SURIITY Co., INC . 100 CIIRISTBNSIIN PL"NTATION Co. ••. •. ••• 101 Co~'~'6RC I "L UNION ASSUIIM"OIl Co. LTD._... 106 CONI<>'HCTICUT FIRII I NJURA/'o"CB CoMPANY, TilE 108 CoNSOLID"TIID M'NI!$, INC 111 CoNTINI!NTM. INSURANCH Co. ( LTD) • • • . . . . . . . . 116 CaBolT CoRPOR"TION 0' TII8 PUILIHINES , TIIII . 131 CaowN L l rR IN$tJ~"'NCH COMP.IN,·. 134 D"'I"AK'" M,NING CO. IN C. .•.. ...• 137 DHMoN'TRNrION GOLD M,NES LTO . 140 Dsv/l.LOPMIINTS, I NC. . . . . . . •• 149 EAST M,ND ... NAO MINING CO. • IS,} ··EL HOOMt FILII' INO·· .• .. .. 159

e"15

EMPLOYU$

L'ABILITY

TUB.

. .. .. .••.

AiSURM.,cn

CoRP.,

. ..

LTD.,

171

EQUITAOLII EXPLQIUTION Co., 1"'1: 173 FIDIILIT'I" &: SURI!TY CoMP"NY. 183 F'LIpIN"S CoMM~I" Dl SEGUROS 184 FILIPIN ,IS LIFE ASSU ..... NCII Co. _. .. .. 185 F'NANCII &: MINING INVI!$TMIINTS CoRP. 188 FIRI! ASSURANCII or PIllLADIILP"''' •...•. _... 19C Fusa M"I.INII &: FIIIII INSUIUNCB Co., TilE . 192 Gu•..,- FALLS INSURANCII Co 200 GOLD ROCK MININO Co. 202 HAW""AN-PIlILIPPINII Co~IPANY. . • . • . . . . . . . . 216 HOMII INSU ..... NCII CoMPANY 0' NlIW YORK, TIIB 225 H OSGKONO &. SII"NOIlAl 8M_KING CoRPDR"TION,. TUB 229

A NNU AL REPORTS Page

J. X.L.

M , NING COMp"NY .. 231 INSUI.AR l.lfE A~uR"NCE Co., LTD . 238 'PO GOLD M,NES, INC. 244 hOOON MINING COMP"N'I". 245 LA FABRIC,.. DE CIlRVEZ" 011 SAN MIOUIIL ,. 258 ··LA URIlAN"·· BUII.DING &. LOAN ASSOC"'TION. 263 LIIDDA Co •• INC., F. Z. LIGGETT 8( M\"II~s TOB" cco Co., IN C. L,NCOLI<>' N"TIONAL L'PR IN~URANCI! Co., THE . LUZON CONSOLIO"TIIO MINas Co., INC LUZON SUR ETY Co., [NI: .. LYRI I: M4$II: HousII 11'0'1:. MAMBUL"b GOLO 1\oI,NIKO Co •• M"NILA BooK Co., INC M"SIL" HOTIIL COMMSY l\1..NUPACTUReRS LIrE IStouscll Co., TItE .. MANKA'I",..N GOLD M'NBI, IN C MARINII I NSUR"NCE Co •• LTD_, TilE MASDATB CoNIOLIDATIID /'<bNING Co ., INC .. MIl"E OnR"TlONS, INC M INea"L RESOURCES. IN C N"TION " L CITY B"NK 0' NEW YORK. THII •• NATIONAL L'PE INJUR ANCII Co., INC. Nnw ZnAL"'''O INSUR "NCII Co., LTD NIAOAR" FIRII INIiUR "NI:R CoMl'''NY NEDIIRLANDSI:II INDISCIII! HANOB~D"NK, N. V. P"'R"CALII GOLD M'NINO Co., INC .. P"BAC"'LE MINING DlI\'BLOpMBNT Co., INC •. "PeOPLES B,..NK &: TRUST COMMNY PIULIpPINII GUMI"Nn· CO., INC., Tile PIlILIPl'IN 8 laoN MINIIS, IN C •. PIIILIPPINE N"TIONAL B"NK PIIIWPPINE TRUST Co. P ,LAR COPPER M,NES, IN C. PRUDBNTIAL ASSUB ,INCB Co., LTD., Tile PRUDlINTI,..L MININO Co., INC. SALACOT MINING COMMNY •. S"N l\1..UBII:IO-LuKLUK"N MINING Co., IN C S"NTO ROS,..R IO SU.'GAO l\liNES, I/'o" c. B. I. SlIlIWANI &: Co. Till!. SCOTTllili UNION &: N"TIOS"L II<>"SOI. ... NCR CoMPANY SotrTH BR IT ISII IMUIIANCII Co., LTD. SUN INSUIIANCE O r PlCE, LTD., Of LONDON

269 275 278

282 290 291 299 ]00 )0)

)18 )20

321 324

))6

))8 )48 )SO JJI )56 JJ7 )80

}84

)90 40) 40~

412 417

<IS

427 428

4)9 44)

4)2

4)) 457 459 470

SUIlIO~O ComOLID"TIID M'NINO Co . , INC. 471 SUYOC CoI<>"SOLlonllo MININO CoM",S\· 473 SWITZIIRL"SD GHNEk"L ImuR"N clI Co., LTD . 476 C. To"so/'o" E. HIIOS, INC. 490 US ION F'RE, ACCiOIlN'!" &. GIINeR"L I NSUR"NCE Co. 492

Page

Page UNION M~N~GIIMIINT CO~'P"'NY.

494

UNITIID ST ...TU F I RII INSUR~NCII CoMP~NY •. UtoI l TB D P ....... (" ... LII MININO Co~'P"'N Y .

495 496

VIS~Y"'N ELECTR IC"'L SUPP LY Co., 11'1(".

S06

VIS ... Y... N M ltoIB~"'LS, ltolc . . . • . . . • • • • • • . • • . . . . YII K TONG L IN FIRII & M~RINII I NliU .... NCIl Co. LTD. YOKOIIM'''' SPEClII B~N", LTD. Y OU;SIIIRI? l muR"NcB Co., LTD.

5 18

')19

D... T ...

520

•.

ADDENDA TO SECTION T WO .. ADDITION ... L

509

523- 558

ON LBADING PII1L1PPINE BUSINI!.SS CONCEkN' WIII("11 A.JI;I\'B Il TOO

EDUCATI O NAL

L ...TB

TO CLA""\'

SECTION PA GE

EDUCATION IN THE PHILIPPINES D URING THE PAST 36 YEARS.. Uy 1'U111>:R

B>:,,"L ' .Y

TIIII Eo\JI;LY BI!GiNNINns-Ei>ucAT ION TO M1!BT PILlLlPPlNB ECONOMIC NIIKDS AND SOCIM. CON DI'nONS- TIII! PULL' II'PINE PUIILIC,SCILOO L CURRICULUM-VOC ... T ION ... L ... 1010 H Ol<rs-EcONOMI($-INSTRUCTION IN TIlII SYSTIlM-TIII! )JUYSI C~L·TRA!NING PROGn~~' -PROGRI!.SS IN HII"'LT !! EDUC"'T I ON-EDUC~T10N 1'011. TIIII NON-ClI RISTIANSA CO~IMON L~NGu"'GB"'s ", MBOIU~I O~ EXPRI!.SSION-PROGRESS IN EFFICIIINCY

PRIVATE EDUCATION IN THE PHILIPPINES. l1y LJ:<o J.

C~;;111.Lr.l0, Diredllr

III

Pri r(J'~ l::dut"lid"

BBGINNING 0' P\'VATB EDUC ... TION-BEGINNING 0' ST ... TB CONTROL or P RI" ...TI! EOUCATION - bI PORT~NT RI!CBNT CUANGIi.S IN 1;,1111 PRl\· ... TII ScIlOOL L ... w-ENROLL~tI3NT IN ApPROVBO PR I \' ... TII SCiIOO L CoUIl5l!S- !. TOTAL ENROLLMIINT IN A1'J'ROVIIO PRI""'TI! SCHOOL COURSES-I!. ENIIOLLMBNT IN PROPWION ... L "'1'.'0 TECIlN1CAL CoUllSiIS-MA'N PRODyl!MS Of PRIV"'TI! SCllooLSI:< THI! PHI LIPPI:-''ES- T III; Co~""IDUTION AND SPIICI~L FUNCTIONS Of Sc.IIOOL$ IN TJI"II P,hLIPPINIiS

CENTRO ESCOLAR

NIVERSITY ..

10 12

FAR EASTERN UNI VERSITY . lNSTITUTII OP ART$ ... ND Sc.'BNl'e.-INSTITUTl!. 01' ACCOUNr.;, BUS INIIU AND FINANCII-

baTITUTIi OF LAw-I:-"n ITUTIl

OP EOUCATION-h<STlTUTII 01' TECIINOLQGY

NATIONAL UNIVERSITY.

TIIII UNIVSR$ITY ORGANIZArlON--GIINllII ... L I Nnlll:-, ... TIOS-CoURSE.S OI"BIIIID

THE UNIVERSITY OF MANILA.

UNIVERSITY OF THE PHILIPPINES

THE UNIVERSITY OF SANTO TOMAS .

THE PHILIPPINE WOMEN'S UNIVERSITY .

SoCIAL TRMN1NG -

CoVUU O'PHRIIO-SPIICIAr.. CoURSES-TH B PHl LI~PIN £ WOMHN'S UN I VIIRSITY SE~r..

ADAMSON SCHOOL OF INDUSTRIAL CHEMISTRY AND ENGINEERING,

mc.

AMERICAN FAR EASTERN SCHOOL OF AVIATION.

THE AMERICAN SCHOOL, INC.

ASSUMPTION CONVENT.

THE ATENEO DE MANILA ..

SVSTBM o. EDUCATION- A 1M-ReLIGION

PAGE

COLEGIO DE LA INMACULADA CONCEPCION CONCORDIA. COLEGIO DEL BEATERIO DE LA COMPANIA . .

COLEGIO DE LA CONSOLACION .

HALF

It CB/>."O RY OF P.OVU~S-o.IGIN"I.LY AN OIlPUANAOII SCHOOLS , L " CO"'SO ..... ClOS" Now IS OSI! o r M" ...

1'11 1...1 's B EST P R I YATK Co "'V II NT SCll oo Ls - FILlPiNO WOl>Ul...'" PItOI'ESSED -GOV IlIlSM BNT RECOGNITION

SANTA ISABEL ACADEMY COLEGIO DE SANTA ISABEL.

THE COLEGIO DE SAN JUAN DE LETRAN THE 路'COLEGIO DE SANTA ROSA" . THE COMMONWEALTH UNIVERSITY , . CONGREGACION DE LA MISION DE SAN VICENTE DE PAUL. , , .

GREGG BUSINESS COLLEGE.. HOLY GHOST COLLEGE , INSTITUTO DE. MUJERES .. .. . . . .. . .. .. , .

44 45 46

CoURSES RE CQON I2.IID IIY T IIB G OVII RN ME'"

52 54 54

JOSE RIZAL COLLEGE ...... . . . . . .. . .. .... ," THE NATIONAL TEACHERS COLLEGE , PHILIPPINE UNION COLLEGE , . .. . ......... j . LocATION- P U RPOSES

THE PHILIPPINE SC OOL OF ARTS AND TRADES, TIIACII IIIIS'

(aQua

QUISUMBING COLLEGE. ST, THERESA'S COLLEGE" (A. A .}-BA(ItIlI.OR IS AlIT'S ( I\.B.)SelllNeR IN ED UCATI ON ( B.S. E.r-AssonAnt IN H OMB E CON O MI C ( A.H.E.)-BAClIIlI.OR Of SCl ENCB ( B.S.H.E.)-ASSOCIA'TII IN Co.,lIII1RCIAL SC I IIN CR ( A .C.S.}-BAC1U!LOIl. D. SOE"(II I N COM( D .$. C . ) -BACIIBI,.OR IN MuS!(: ( B.M. )---CoLl.拢GUTIl C OURSES

56 57

CoU RSES 0 ' STUPY R IICOO N1ZllD BY TH I! GOVIIIlNMRNr-Asson An IN ARTS a"Cll IlLOR 0 '

IN H O M B EcoNO MI CS

MIIKell.

SAN BEDA COLLEGE, S VSTBM OP EaUC"'TION-

RBl.1 G IQVS Il<STRU CTION

UNION HIGH SCHOOL OF MANILA,. UNION COLLEGE OF MANILA,

58 59

UNION TUIIO L OO I CA L SIlMINARY

VALERIANO AUTOMOTIVE ENGINEERING COLLEGE.,

SECTION FOUR

MAP OF THE PHILIPPINES, OFFICIAL GOVERNMENTAL AND GENERAL INFORMATION .. , G OV II IlNMRNT 0 .

ST"T~ - CD M~'O"WBIILTII CF T II B PUlLl Pp rNES Soc rllTl l!5-~CIl OO LS- CC LU:GBS -CO"\,B"n--C Il A MIIBU

TII B U N I TII D

CII U.C UBS AI<II) RUr o rOllf Soc rAL O IlOA NnA'n O Nf,AN" POSTA L GlIlD B

P OL1T I CAL

P ART rES-VBTUAN

M .. N ' .... ( I n ' o.

OIlO AN lz .. Tlom-M ASONIC

CLASSIFIED LIST OF PHILIPPINE FIRMS.

GO\'UNM"I!~T

COMMIIIlCB-CLUJIS

A:-''1)

O"OAN ' <l:ATr O"1i-CUSTO~'~

RtnTIC: MINlNO LOC:ATION

THE EARLY PHILIPPINES

HEN MAGELLAN DISCOVERED the Philippine Islands in 1521, fir st sighting the island of Samar on )Irarch 16th., he proceeded to Limasawa, south of Leyte, where, after exchanging gifts and courtesies with native chiefs, celebrated the first mass on Easter Sur.day. March 31st., 16Zl. He no doubt commented to his fellows, even as ncw-artivals to thp Philippines invariably do to this day, on the apparent bappy. wellfed, and conbmted attitude of the peoples whom he discovered. He found these early people possessing un established culture of their OW'. centered around the unit of family life, with reIations between parent and children well defined, with authority invested in the paternal rights, a nd woman held in a position of honor and dignity, enjoyi.lg r ights and privileges of which her other Oriental sisters scarcely imagined as the common lot of womankind. MAGELLAN FOUND FILIPINO SOCIETY at this early date already., divided into four classes: the nobles, the freemen, the serfs, and t he slaves. Marriage was by pre-arrangement, often without the previous consent of the contracting parties, and the custom of giving do:w eries was eslabli!;:hed and marriages celebrated with great feasting. He found the FiliIJinos surprisingly self-sufficient, which undoubtedly accounts for 'tbe habitua l attitude of well-being which is so often remarked upon by visitors to the Islands. They cultivated rice, millet, coconut, br.nanas, and other fruits, and maintained trade with China, Borneo, Japan, and other neighboring Oriental countries, chiefly through the barter system of trade, although shells or metals were nt times an already established medium of exchange. History relates that Magellan, having heard of the thriving town of Zubo (Cebu), set sail for that place, and with a salvo of saluting cannon, informed the King that he had arrived. Afterward he is said to have assured that personage that his visit was friendly and for the purpose of buying food. Magellan was apparently a speed-worker of ability, for we are told that within a week, nftel' entering into a blood-pact of peace with the native king, all the per sonaJ:es of that island, as well as some others, were baptised, some eight-hundred in all led by King Rumabon himself, his Queen and their ~on a nd daughter. Magellan, however, died in a battle with the natives of Mactan, April 16th , 1521, and his followel's lifted anchor immediately thereafter nnd returned to Spain.

The Philippine Islands are composed of a string of 7,000 islands, the northernmost of which is some 500 miles distant from Formosa, while the southern part lies in the neighborhood of British Borneo, bounded on the east by the Pacific Ocean, and on the west by the China Sea, the Arch:r eIago ly;ng about 600 miles off the coast of China in approximately the same latitude as Central America, and composing a total coast line of about 11,440 statute mile,;, or double that of the United States. Luzon is the largest of thli" Islands composing the Archipelago, with an area cf 40,8 14 square miles. H ere, Manila is situated on the coast en路 closed by Manila Bay. The early inhabitants of the Phili ppines were the pigmies, who a.lthough still in existence, are fast disappearing. The early immigrants were the Indonesians and the Malays, who are divided into the pagan, the Mohammedan, and the Chris~ tian Malays. Chinese traders first came to the Islands in 982 A.D., and when they returned to the Land of of Dragon laden with valuable merchandise, trade relations with China were establi shed, which consi derably influenced the industrial life of the Filipinos. 1t is believed that the well developed native indu stries which the Spanish found flourishing when Magellan sailed into the Archipela'!'o, such as sug-ar milling, g'oid mini .. !!. metal working, etr.., were of Chinese initiation. There are also recorded expeditions by Malacca ns like Abu Bnkr (1380), and Sumatrans like P l'ince Bfl.ninda. (1390), intent on subju!;,ation before the Spaniards came, two Hindu-Malayan empires having succeed-

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cd in bringing under one government, the islands inhabited by the Malays including those of the Philippines. There arc some manifestations of a way of writing among the Filipinos of this period, which was from left to right. The principal dialects of the period included the Tagalog, Visayan, Ilocano and the Parnpango. Whether or not there was a native literature is a matter of conjecture; those claiming this to be a fact, maintain that early writings were unfortunately made on materials which have since weathered and perished. However, oral tI'adition of the Filipinos is rich in folklore, legend and mythology. Like all primitive peoples, the Filipinos had some belief in a single Being, remote and aloof from the affairs of men, which was confused by the superstitions and practices which formed a large part of their cult. Early Filipino government, however, was characterized by highly defined laws, with punishments including death, dipping in water, and scourgin,g. CEBU SPANISH COLONY

Some twenty years after Magellan's expedition, another expedition was made under the leadership of Villalobos, which apparently accomplished little, and it was not until Legaspi's expedition in 1565, that the Philippines were subjugated to Spanish l路ule. Legaspi first founded the Spani:;;h colony at Cebu, and before long another colony at Panay. From these two colonies, he sent forth the banner of Spain to other islands, until within a few years the Spanish flag was flown over every Vi~ayan island. Manila, a Mo1'o Settlement in 1570, governed by Raj.: Soliman, was captUred upon Legaspi's order in 1572 by Martin de Goiti after two battles, Soliman's fort having occupied the 'Present site of Fort Santiago. From Manila, more remote parts of Luzon were conqucred, and within the lifetime of Lcgaspi, the Spanish colors fluttered over the entire Archipelago. PORTUGUESE AND BRITISH EXPEDITIONS

The Portuguese came to the Philippines in 1568 and ag:lin in 1570, but were repulsed. The Dutch also ca'ule several times but werc always driven back, the mOi;t famous of their clashes with the Spanish defenders occurring at Mariveles at the ent rance to Manila Bay in 1610. The Chinese also made piratical invasior.s, Limahong appearing in Manila Bay in November 1674. but repulsed. The British occupation of Manila took place in 1762,

INDUSTRIAL MANUAL but the treaty of Paris in 1763 terminated their sojourn in the Philippines. Muny of the changes wronght by the establishment of the Spanish regime are apparent event today. Still active Spanish-style churches today bear evidence of the long and zealous work for the conversion of the Filipinos to the Spanish faith, and a general elevation of moral standards has driven away the dark spirits which dominated the super~ :;;titious cults. The Roman alphabet and the printing press were introduced by the Spanish Fathers, who immediately establish~d schools, colleges and universities, teaching the Spanish language to the Filipinos, as well as constructing hospitals, charity institutions, libraries, etc., and it was not long before western conception of culture widely influenced all walks of Filipino life. SPANISH CONTROL

The Spaniards established a centralized government in Manila, with the entire Archipelago placed under the control of the Governor-General whose powers were manifold and partook of the executive, legislative, judicial, ecclesiastical, financial and military. The Audiencia Real or Supreme Court was also established. Provincial and local administratio)) were first under the supervision of encomenderos who ruled the different encomiendas, but later due to abuses, alcaldes-mayores took the place of the encomenderos. Towns and cities were created; bridges an:! highways were constructed, with fortifications and other public improvements esl.'lblished throughout the Philippines. Several industries still in existence today owe their origin to the Spanish coIOl:izers, such as lime, cement, medicine, etc., all introduced into native life from the time of the fint Spanish Governor-General Legaspi, in 1572, to the last Governor-General Jaudenez, in 1898, when a long series of historical events preluded and made possible the advent of the United States in the Philippines. AMERICAN CONTROL I!"STABLIS HED On May 1st., 1808 the world was astonished at t he news of Admiral D ewey's destruction of the Spanish fleet in Manila Bay, which resulted in the establishment of American cont.ol of the Philippines. Most progress has been made by the Filipinos under the Americans, and public improvements too numerous to mention have transformed the Philippines and the Filipino people within a three

PHILIPPINES

brief derodo!s so that today they are prepared to take their place independently among the nations of the world, and to fulfill their mission of leadership of the modern Oriental peoples. In government, the Americans have prepal'ed the Filipinos and granted them more and more autonomy, until the climax of Filipino attainment and struggle for independence was recognized in 1935 by the establishment of the Philippine Commonwealth, preparatory to granting the Philippines complete independence from the United States. Under the J!overnment which was concluded on Novembcl' 15th., 1935, the Philippines was a

colonial possession of the United States, operated as a colonial possession under the terms of the Jones Law of 1916. This law provided for a high degree of autonomy, but continued the executive adminis_ tration of Philippine affairs, both domestic and foreign, in the immediate hands of the United States through a Governor-General. With the inaug'.Jration of the Philippine Commonwealth, on November 15th., 1935, the Philippines entered into a new governmental status, and the Filipino people were brought neal'er the realization of their long cherished aspiration-Freedom.

EVENTS I,F-ADINC TO TAE ESTABJ,ISH;\IENT OF THE CO~DIONwEAt:II.H OF TAE l'HILIPPINES

J .. ~e iU. 1901.-ll i,., ("ivi) Governor WM appointed

A'''g1Il1 If. 18ml ( A"o ... 1 18. S.'80 ". m., "'"nil" {im.)-A protoeol

olne'\ce

bctwc~~ ~he

United

S~~I ...

ftnd So'\in

,,'~" ~irtned,

autho-

~:;b~r t~7 ~,~~ii~. ~:~~in~o the'l('~~~~~1e~0~~ !h~re~1r~tp~~~

... hirh .h~U ,Iete-mine the eonlr~I, dilpo.ition. nnd gov@rnment or the Phi1ipnin~. .hl1lUl fit. 1,\''',\'.-G~~eTlloI Merritt n uml!d the dtlti~_~ of )filit'\.y Cov.rnor ... nd i .......1 n prnchm'\(i"n "umin" t"e ..."mini.trntion

~~v;,t,;~'1"'i~':.tfn~~e tel~~'~\~~ig~':t\h':'£'~~I.hn~d~~~~t:~'i~~

",.,e e"~tin',e'l in ui.tenee and reOrK'\tli~1!d with Ameticnn II.m)" officer in ohn'l<c. Drcemb.· 10. IR9R. -Trcmty of P e.... co endiri'g the Spsni. h·Amcriciln Wllr ...., .ign"".

J"C~~:'i~~;,:8:~e-;r'~1 ~il'·i~{~~hr..~7:ne,:o o/e:~~cF~het I.~li:re"~;·: ~i'.~trCnt,~~~i.:..i~~~n"T:h~i~· ~tti~nlQ~~':r~:::n't O~t t~'\~t~~t~~t fJ

.hAp;"g Ihnt plllioy flhe tOn!\1mm,\tinn ot the trUlY 01 pe ... cp nnd the ner ~ itv nf ~xtcn<l;"1I: the nct.ml Otcup.tinn throughout the hlAnds), nnd In M"PetAle with the n~vnl lind milit~rv IIuthorities M Maniln. in tho cITeMive e~ten5ion of AmcrlClln Snvcrcignt}· nver the Ar<:hipelngo."

.lpril". 18~1l.-lbtifiQAtionl Were c:rohanlled by the twn COUnl,;",Spnin and the United St.nlCll-~n,1 on the u tile dilY the Tre ... ty 01 Pn.is ovn~ p"bli~ly proel"i","" by the PrMiden, of the United St!ltCB wherein it i. "tipnl'"ed th~t S" ... I" ce,le' tn the United !>I.ntc! tho Archipohlgo known Rs the Phili!,pin,c blnmls. S.pr~mb.r. 1801l._The I'i nlt Philip!,inc Commi.nion WAI reClIned.

.Vo.~m~," t. IGOO.- P,eliminnn report ollhe I'inlt Philip!,ine Commiuion W"& ,ubmitted. Jan""'11 81, 1.''II}Il .- Fin~1 report or 4 "olulllo~ "'ft~ su bmitted ftnrl tr ... nllllitted bv the President 10 Con"rc.u. rernmmenditog a t~rri toriAl r"'l11 of govor"'nenl. following the Jeffell',,"iDn soheme nf government for !.nui. i... n" with nn oleete,l 10"'0' hnuae nnd "n upper hou.1! hair e!orted nnd hnll "o,"in~tcd

lI~i~' 1\~i{Ir:·H~¥~r~e:~n#r~~.\~~ei:~ffg~~,::iC~n~'~~~~:I~~o~~~~

E. Wright, Ronty C. Ide. and Bernard :'>Io.e_. membe~s. all eh'm"'l, nnd in eon lr ut wilh the Firat Philir>pino Commiuion of au ,dvlsory body. but. ch'U "sene), ,,·it!. nmple po",·enl.

,1I"'·l.I1,. IOOO.-T!,e.l',c.i<l~1lt .i~...cd

in~t.urtion5 to the Spcond

;oh~I:~P.j.h~ ~;,.n~:~I6-C~~;~I~(~:t,~np~i'li~~\~:,~.f,tentimc~ are rermed

S.o::",!~~,~. /~~i!~l:~11 c'i;'il~~~~rv~.CemlnJlnding

Geners] of

.Unrcll !t. I(IOI.-The Spooner Amendment WIIS appro,·ed. which

~d;~, ~hBeC:;~'~~:nd~rt~: t~nil)p:~cl!\n~"o!~~~.l~~~\)'ro~~;:ment.

T~h"""nd indu~tetl

Willi~m H. intn offire on the fourt h "f J ul)' f"U owin&

Thete~her. Ih e CemmLOl!ion became the .010 legi.lative body ro~

Ihe rsl~nrl.' ",,!il the in",u/l:utfttion or the Philippine As.embly on ONober 16. 1007, "'h e ~ i' lh ued "';Il> the lntter legisl~tivo functiOIl5 o"er the Chriu iRn provinces. S~"ltm~t' I. fOOf.-B~· the PrMident'1 orde".. the lo .. r mcmbo,," of t·be Commission were mMle He.~'1s nl the Executive Department.!.

Oc::cl~~!~ ~~:~~r~e of th e He:..!. of the DepArtmeot ...·3!1d""ignatJ ..I" I. lpot.-The Philippine Bill was approved-Act of Congress

of J uly I, I{tO:? J .. III .,. IPOf.-The Pre!'ident terminnt"" tbe offiee of :'>Iilitary Go.

vernOr. F.6ruor¥ 6. IOO6.-The tille of Civil Gnveroor ...., cbBnged to G ovcrnor·Gener~1 by Act nr Congress. Oc/Q~r

16. IOO7.- lnn"curMion or the Fint Philippine Assem bly.

O.IQb~r. 1918.-Pre.ident Wil len appointed Filipino nujority memo

benlhip in the Philippine Commisl!ioD. Au" ..../ !UI. 1.916.-The Philippine Aut onomy Act Or "Jonu Law"

... as approved. pro";!!", nr twO ml\.llt importent mAttenl-p rucnt MILonOmy for the Pilipino peol,le and future iodependeoce fer them. March e4 , 1984.-Publie Act No. 127 of the CongteM of tbe United Stntes otherwise kllowlI a$ the "Tl'ding~-~lcDuffia Act" was appro"e'l, MOl/! I . Itl54.-The Tydins4-1\loDuffie Act WDS .ccept"" by tbe Philippine Leg is laturo . July 10. f984.-P.leetion of DelelClIIcs to the Conatitution~l Cnn-

'·ention. Jwlll 50. I 084.-Cons t itutionll! Convention WB! convened.

Jo't.brtlorv S. /08/;.-The Cnnstitution of the Philippines "'as Bdopted by the Cnn~litlltiOn81 COl>vention. .'If.. rc~ !'.!. 198(;.-Tho Pr e..idenl ~ertilied that tbe Constitution 01 the Philippin e!' WSI in "lb.tDntinl conformity with the provisions of the Tyrlin::-s-:'>ieDuffie Act.

.11"11 /.4. 19"~.-The CO"'lit .. tion was rllLili!!d by the people 01 the Philippine blnnrll. 17. 19S';.-Election 01 nffieinl. or the Common ... eslth. Od..!...,. I t. 1985.-The L~ili.lnt .. re met in joint I~ ion &nd publicly co .. nled the \'ote. es~t fnt President nud Vice Pr ... idellt nl the Philippines nnd rlelermined the reoult the,eof and ecrlilied to the Governor·Ccnerlll. NQ t~mbfr 16, 19.'6.-1·he Preoidenc and Vi~e President of the Philippines and Memb .. ,," of Ihe N lionlll A..embly .... ume<i olli...,. S."I~mb..,.

' 4~____________~T~H~E~CO~MME~~R~C~I~A~L~&~lN~D~U~ST~R~I~A~L~M~A~N~U~A~L~______________ PBlloIPPlNE COMMONWEALTH The organic law of the Philippines for the period of the Commonwealth is the Philippine CODstitution, in connection with which. however, there is operating also the Tydings-McDuffie La w, which serves not only as an enabling act for the Phi!lppine Commonwealth, but a lso continues in force as a basis for the relationship between the govern-

ment of the Commonwealth and the United States. The Philippines remains as an American possession, but the automony under the Jones Act has been enlarged to the fullest extent in domestic affairs. As a self-go verning Commonwealth, the administration of local matters and, indeed, the entire Philippine government, both executive and legislative, is in Filipino hands, subj ect to an exercisa:ble. but qualified veto.

INDEPENDENCE MOVEMENT ' HE STRUGr.LE of the Filipinos for political emancipation is as old as t heir own hi story.

The untimely death of Ferdinand Magellan, th~ immortal discoverer of the Philippines, at the hands of the brave people of Mactan, was dJe to their love of independence which he wanted to curtail. The early revolts of 1574, 1587-1588,1601,1622,1625,1639,1643, 1660,1661; those of Palaris and Silan in 1763, of Novales in 1823, of Dagohoy, chief of Bohol, in 18271828, or Hermano PuJi in 1840 and of Samaniego in 1843,-not to mention many otherswere all motivated by th,desire to free themselves from Castilian domination. It is interestin~ to n.ote tlmt as early ao; 1587, a sor t of "Katipunan" (union) of the several regions in the islands, mc:ludmg central Luzon, Calamianes, euyu and Palawan, planned to have a general revolt, but its timely discovery by the government ended hs activities and causeJ the execution of its prominent leaders and minor punishments for the others. ~rom the point of view of its extent and significance, t he Ilocos r evolt of Silan in 1763 was more interesting than those of the earlier ones.

LIKE 01'HER ARMED UPRISI NGS that took place in the country, it was generally brought about by the desire of the natives for the removal of vexatious personal service!', thE' payment of t ributes, the oppression of the government officials and ultimately to obtain the independence of their countr y. It took the government longer to suppress the revolt of Silan than any other because it was not only wider in edent but because at that time Manila had been captured by the British. But as usual, it was put to an end by the policy of "divide et impera" and its leaders were put to death. All these revolts were suppressed quite easily, for obviously among the Filipinos there was lack of unity, lack of proper leadership. Presumably the Filipinos of the second half of the nineteenth century understood these defects so t hat they be· gan to remedy them. They established societies in order to secure t he "union of t he archipelago one compact homogenous whole," emphasizing the necessity of common action. ·811 DR. EI1PRONIO

0/ I~ U,,; UI'I ;III of S .. nlo

:-.r.

ALI P. PI!. M .• PII. 1,1'17 D .•

TllnI<U ""d fl•• LoC."" CO//,oll'.

Prill...""

Then in 1896 under the leadership of Andres Bonifacio, otherwise known as the Father of Philippine democr acy, and then later under the leadership of Emilio Aguinaldo, the Filipinos of central Luzon s tarted the revolution to overth r ow the Spanish sovereignty, and before long almost the whole archiI?elago joined the revolution. They organized their own government, elected officials and fought the Spanish troops. The revolution continued for over a year. However, t he Spanish government, being unable to suppress it and the revolutionists being unable to conquer the whole Archipelago for lack of arms and munitions, it was decided between them to sign peace which became known as t he Pact of Biak-na-Bato, which in effect became a mere truce. From the testimonies of Apolinario Mabini, the brains of t he Philippine Revolution, the Spaniards and the Filipinos signed the pact in bad faith. In fact provisions were not carried out as a whole. Accordingl.y, when by a twist of events the American troops came here to fight those of Spain in 1898, the Filipinos joined the new comers. But

PHILIPPINES aftA!r the signing of the Treaty of Paris in December, 1898, between Spain and the United States, another story was written. This time the war was between the former allies, the Filipinos and the Americans, for the former believed that independence should have been given t hem in accordance with previous agreements entered into with the Americans, whil e the latter flatly denied such agrcement. The war naturally resulted in the victory of the s tronger, but with the unnccessary loss of lives--4,OOO Americans and 16,000 Filipinos. Consequently, the Phil ippine I slands just changed its master. But right at the beginning, the new master had shown its spirit of benevolence. When its spokesmen had madc clear that America had come here not to exploit but to trai n the Filipinos in the science of government, and that the Philippines are for Filipinos, the latter willingly began cooperating with them, Dut without losing the hope of becoming independent. This time the independence movement was one of peace and not of force. The grant of the PhilippinE\ Assembly in 1907 and the Senate in 1916 has given. great opportunity to the Filipmos to govern themselves, for by these grants, the local, provincial an(l the g reat majority of the insular officials have become Filipinos. Taking the preamble of the J ones Law (1916) as -:oncrete and definite promise of independence,

the Filipinos soug ht to establish a stable govern_ ment and then persistently asked the United States Congress for the grant of independence. A number of independence missions were sent to America looking forward to the attainment of that goal. Then in 1933 Congress enacted the Hare-HawesCutting Law which would give independence to the Philippines after ten years, but because of some objectionable features, it was rej ected by the Philippine Legislature. Then largely through the efforts of Manuel L. Quezon, President of the Philippine Senate and of Frank Murphy, Governor Genera l of the Philippines, Congress enacted the Tydings-McDuffie Law which is largely similar but more acceptable than the Hare-Hawes-Cutting Law. When the new Jaw was signed by President Franklin D. Roosevelt on March 24, 1934, and accepted unanimously by the Philippine Legislature on May 1, it became a law. In accordance with this law, a constitutional convention which was elected J uly 10, drafted the constitution for the Philippine Commonwealth. The constitution was ratified by the Filipino people in a plebiscite held on May 14,1935. F our months later, the election of the President, Vice-President and members of t he Assembly took place. Manuel L. Quezon and Sergio Osmeiia were elected President and Vice-President respectively, while Gil Montilla was chosen by the Assembly its speaker.

INAUGURAL CEREMONY ' OF

THE COMMONWEALTH OF THE PHILIPPINES ENEATH A SKY of tropical blue, radiant'y reflecting the rays of a bright autumnal sun, more than a half-million persons assembled in Manila, at the Legislative Building, early on the morning of November 15th, 1935 to witness and to participate in the establishment of a new government for the country, the Commonwealth of the Philippines. A bugle call anMunced the processional march of officials a Id distinguished guests at 7:45 a. tn. As they descended the center aisle of the huge ceremo lial stand erected upon the steps of the main <:ntrance of the Legislative Building, the great audi ence repeatedly applauded until, followi ng the enh'nnce of the Honorable George H. Dern, Secretary of War of the United States, the National Colors of the United Statl'S and the Philippine Islands were borne to the rostrum. A deep hush fell then upon the v"st assembluij'e, "\nd His Grace, the Archbishop of Cehu, pronounced the Invocation, opening the Inaugural Ceremonies:

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"To fhe King of AUtf. ;",m or/ol. i"m·,,·61~. 1110 .. n/v God, b. A(mor and IIlorlllor ereT ""d UU, Am.n, .. W. IbnJ,; The. lor I/li~ dall .0 I""ued ,,,,. 1>11 //le Filipino people, dawning ",;Ih br'llill horn. lor (/I. lulfi/l",.,,/ 0/ our cAtr-

., Ard and l'oili",,,lo O1.Ip.Talo'"" •..

"Deign, 0 Lord. 10 bien .ll mfrie .. 011(/ Spa,", alld ,,,,,,pl'«I Til'll work if< u,.

d.i~n

"lVe pralJ The, 0 C)d of W i,d"", ".ul Ju , licc, /r(1m IDh"m all " ..!Ao';11I come.. 10 .. " i,1 ",jl/l Til" /.gh! ,,,,d power th. aulhoriti •• Il'lIo h~,. bUI' dec/ed 611 Ih. wi/! o/their brelilr(n . . /11. Pruid",1 and /11. I'icc-Pruidcnl .... .. Lei TAli di.;". ",i.dom ."Iioht,,, Ih. dch'b.ralion. <>, /h' Nat.'onol Au.mb/I/.... Bkn our 'nd.ulr ••• and co",mOTU. Pruu •• .... ; .. 1'\ a .. d Jl(au, lilHrl ll "nd cqwalil" (I",o"u.1 Thy b<:. Ior.d moplc.. ..

Then, at the conclusion of the Invocation, the last Governor-General of the Philippines, Frank Murphy, now High Commissioner, by virtue of the oath of office he had taken at Malacaiian on the preceding day, introduced t he Secretary of War, Honorable George H. Dern, who delivered his Jllaugural Address and then called upon the High Commissioner to read the proclamation of President Roosevelt, announcing the results of the general election on Septert.ber 17th., 1935. This was done, and thus was completed t he first part of the Inaugural Ceremonies. A thrill of expectancy, electric in its intensity. now swept through the vast audience as the President-elect rose to take his oat h of office. Slowly and distinctly the Honorable. Ramon Avanceiia, Chief Justice of the Philippine Supreme Court, pronounced the solemn words, a.n d, as he concl uded,

the President-elect repeated them after him, into the waiting microphone eager to convey them to every corner of t he civilized wor ld. Followed then the booming of the gun salutes, t he ruffles and flouri s hes, and the playing of the National Anthem proclaiming that on this day, November 15 of the year of our Lord nineteen hundred and thirty-five, there had been inducted into office the first President of the Philippines, Manuel L. Quezon. Afte!' the administration of the oath of office t o Vice P resident-elect Osmeiia and to the newly elected members of the National Assembly, President Quezon began his Inaugural Address, with the words: "Fellow-Counl'lImen' I n ,he .;rerciu 0/ 110'" conIU, .. ,ionol p, ..ooalirr lIaU /'U rf tlccled m. 10 Ih e p,uid.nCII 0/ /I,. Ca ,,,,"a""'ealth. I (1m pro· /o .... d/1I 11'01",.. / far th i. n • .., t;rprtuion 0/ ",our confide"ce, a '''/ God hd,,;nu me J .hall ..01 failll'IU."

a nd in conclusion said: " I fate Ih. / .. , .. , . "'ilh hope a .. d /o"i, .. ,/•• c~'tain Ihol G",J .. nt,.,., no and ""idin', band. Mau Ife gire m( light. ,'reNolh. a ..d lO .. ,aOT ~urm()r( Ihol 1 mau .. Ol/all.,. in Ihe ho .. r 0/ .("ice 10 mil peopl ....

... r., abandon ~ a p~ople v:ho .rl' /0//01(1 If;,

At exactly two minutes before nine, the Secretar:{ of War of the United States proclaimed: "I do htr.bll a .. "o .. "c( thol Ih. h.r.l%r••;ri. ti ..u Gorerll' "",lI o/Ihr Philippin e. i. "0'" I.,milla/.d. and Ihol th( Go,tr.. • m.'" o/Ih. Commonwtallh 0/ Ihe Philippintl i . enlerino upO/j il. ';Ohl f . prioileu." pow.ra, and J .. lie... ..

I\. new government for this country had been ef:tablished. A new era for the Philippines had been oegun.

SIGNIFICANCE OF NOVEMBER FIFTEENTH * OVEMBER 15, 1935, will always stand out as a cornerstone in Philippine history, representing as it does the birth of a new form of government distinct from the old order in its concession of greater self-rule f or the Filipinos and only short by a hair's breadth of ultiTen years from t he date, or by 194 5, the Philippines, will, unless mate independence. something cataclysmic happens in the meantime, step forward and take its assigned place as a full -fledged member in the concert of nations. Anything done to perpetuate the memory Of that historic day deserves the support and commendation of the public. Love of country demand, that the day be consecrated to the eternal race :deal. Cognizant of its importance, the Government has made provisions for its proper observance th is year, and will p robably so make for every ens':ing .year. A yearly celebration of this memorable "vent will not only serve to l'ecalJ the unparallele:l relationship between the United States and the Philippines which reached its first culmination on th;It. happy occasion, but it will also instill patriotism ill the citizenry of the country .. ,

N BII JOIIO",

V"RO"S • .~oc'"la'u 10 Ih P,uidtnt.

PHILIPPINES

THE AIM OF THE COMMONWEALTH President Quezon E numerates O utstanding W ork Done by the New Govern ment HE A IM of the Commonwealth is the maintenance of a special commercial relationship with the United States, not only during the transition, but also aftel'wards, His Excellency, President Manuel L. Quezon, remarked to Harry Frantz, chief of the United Press Bureau in Washington, D. C., who visited Manila as one of the passengers of the first commercial trans-oceanic trip of the Ckina, Clipper of t he Pan-American Airways. If the aim of the Commonwealth is attained, according to His Excellency, it wou ld strengthen the cultural

bonds that bind the two countries. THE PRES ID ENT explained in the interview what the Commonwea lth has accomplished during its first year. The rn(>!;h outstanding of such achieve_ ments are thE' ol'ganiz~on of a n adequate n&-tional defense, creation of an economic council to plan out t he reasonable use and conservation of t he country's natural resources, and the simplification of the governmental system for purposes of efficiency. Answering the questions of the United Press l-epresentative, President Quezon said: "By virtue of my position, 'I am entrusted with the duty of laying the foundations for the nation that we are building. "Therefore, what I am doing will determine what we may do tomorrow, and what edifice may eventually be built on these foundations. " The first task t hat I saw on assuming office wns to fill t he gap in the edifice which the American government had been constl'uctit;lg h,ere. That gap was the defense of the country. So the f irst thing tbat I did was to seck and obta in approval of a plan for national defense. This means that we want to build a nation provided with the means to defend itself and to stand on its own feet. "The second thing that I undertook was to obtain passage of a law creating a national economic council, which wuuld survey the economic resources of the country and submit a plan for their proper and coordinated development. That step shows that in econom ic matters we are getting ready to stand 'In our own feet a nd avoid dependence on anyone else. That law was passed at the inaugural session of the National Assembly,

GOVERNMENT REORGANIZATION

" My third act was to seek a law empowering me to reorganize the whole government, with a view of doing away witb all unnecessary red tape, so as to speed the government machinery and abolish positions not required by the sel'vice-in a word, to simplify the Government and make it more economical. "What we have done during the first year of the Commonwealth, in brief, is this; we have provided the country with defense, we have adopted a plan for the rea ~onable use and conservation of our national resources so as to make the country self-dependent, and lastly, the government has been reorganized on simple and efficient lines, capable of performing the tasks of a progressive, strong, and just government." President Quezon, asked concerning the longterm relations of the P hilippine Isl ands with the United States, said: "Our idea would be to maintain special commercial relations with America not only during the life of the Commonwealth but after independence. If th is idea is calTied out, it natural路 Iy will mean s pecial cultural relations-that is to say that American institutions, American literature and ideas would continue to merit our special attention in the Philippines, because countries that are close in commerce tend also to maintain close spiritual relations. ENGLISH LANGUAGE BASIC "Particularly would that be the case between the Phili.Dpines and the United States because the English language is the foundation of all public

THE COMMERCIAL & INDUSTRIAL MANUAL

teaching in the Philippine Islands, including the University of the Philippines and other high educational institutions. "My honest opinion is that special trade relations between the United States and the Philippines would be mutually beneficial to both countries. Not only do we have tropical products needed in the United States, but we have many minerals needed by the United States. such as gold, chromite. and manganC!se. We are rapidly diversifying our production. Among our new products is quinine, which we are able to produce at very low cost. In six years we will commence export of quinine to the American people at one-fifth the present costs." ON JAPANESE RELATIONS

Taking into account uneasiness among some unofficial observers regarding the possible future

encroachment of Japan in the Philippines. the correspondent asked for a frank opinion. President Quezon replied: "I do not think that we are headed toward trouble with Japan-first. because we are not going to give Japan or any other country cause for interference here; we will maintain peace, order and administer justice to all who trade or live with us; second, because we are proving our earnest desire to become an independent nation. I have no doubt that other nations will respect those who assume full responsibility for independent existence and pay full respect to the laws and rules of international intercourse. I do not think that Japan is looking for trouble with the Philippines-she has too much to do with her own affairs ... "

LONG-RANGE ECONOMIC PROGRAM Philippine Govemment is so Operated as to Enable the Country to - be Independept at any Time, Says President Quezon LONG ·R ANGE program of economic relabonship with the United States looking be,yond · the transition period will be the main objective of the Philippines as stated by His Excellency, Pre!'ident Manuel L. Quezon. Anything accomplished short of this proposal would be no more than a palliative and consequently unsatisfactory to the Phil ippine Government, he explained. Presidcnt Quezon asserted in reply to queries that his program of government presupposes the execution of the Tydings-McDuffie independence plan and that it is being run so that if Congress should dccide to give indepcndence tomorrow or say within five years from today, the Islands would be prcpared to assume full control and responsibility of the Government without any hitch.

"WE RUN OUR PUBLIC AFFAIRS upon the assumptil)n that independence is to come and the Commonwealth will be terminated after the transition pedod," he said. "If we did not prepare ourselves toward that end, we would lose much; we might lose everything." President Quezon's re-statement of the Phil ippines' position regarding independence was made in l·eply to a question as to whether 0 1" not the Commonwealth may not continue beyond the ten year peri()u of transition. It was explained that not a few citizens have expressed their conviction that a

prolongation of the existing relationship between the United States and the Philippines would prove beneficial to both countries. "1 have no doubt that many Filipinos want the Commonwealth to continue," President Quezon said. " Professor Kirk a recent book on the Phil · ippi"r.es answers the question intelligently. I do not believe that the average Filipino is for the continuation of the Commonwealth after the transition period has elapsed. "There arc people who will want the Commo~ wealth to continue because they feel secure under

PHILIPPINES the American flag and beeause they believe that there will be less risk if the Commonwealth continues than under the republic. I believe that there aTC Filipn.os who be1ieve so sincerely that the prescnt status be prolonged, but I do not believe that thi/\ is the! position of the majority. "I am not speaking of the viewpoint of the politicians or of the elective officials. I am speaking of the average man who thinks of the national interest. The majority of the people are for terminating the Commonwealth. I say this because if the average man were not for it, the politicians wo uld n ot be for independence. "The protectorate plan is entirely out of the question because it is not understood and accepted in the United States. "I believe independence is coming but whether or not independence is going to be established, there will be some kind of relationship between the United States and the Philippines. Of course, no one can tell. ''It is a mistake to think that the people wilr liCIt ask for independence so one should work under the assumption that independence is to come. There is nothing to lose by doing tbat. On the other

haud, if we did not prepare f or it, there would be much to lose, we might even lose everything. It is the only way the Filipinos can face the future. "We are ready f or independence in five years, even tomorrow if Congress should decide to give it. I am preparing this Government for that. I do not wllnt to be caught napping; that would be the last thing I could be accused of." President Quezon opened his remarks on the trade conference proposals by explaining that all the Philippines would like to do in the conference which President Roosevelt promised to convene would be to present the facts from which a "Reasonable, just and beneficial trade relations" between the two countries can be involved. He said that it should not be hard to determine what trade relations can be had both during and after the transition since the United States and the Philippines are already in possession of the fact~ ne('.essary in determining the nature of their relationship. The President declared that the Phil ippines is wt'lrking for free trade. At any rate, he pointed out if this cannot be accompli shed, the Philippines would seek for arrangement that would take into account trade relations after 1946.

FIRST YEAR OF THE COMMONWEALTH HAS ADVANCED GOOD GOVERNMENT ' HE ACHIEVEMENTS of the Commonwealth during its first year are outstanding contributions to the advancement of good government. Not only has the new government maintained financial stability by adjusting expenses to income but also it has accumulated surplus money of around P5,OOO,OOO. The n ew regime has established an adequate national defense which insures the safety of the citizens and maintains peace and order. It has reduced unemployment, organized credit facilities and in a general way, improved materially tr.e conditions of the masses.

BECAUSE OF THE EMPHASIS laid by the Commonwealth on the economic development, the country's domestic and foreign trade have increased enormously in volume and value. Since the inauguration of the Commonwealth up to last September, a period of ten months, the Philippines' foreign trade amounted to P401,!l62,197 in value as against P287,_ 500,304 during the corresponding period a year preÂˇ0" JUUII Z. V ,H .CJ<IUI:LA. C..mmtTc;,d Aoenl, CM.,. P"blicil" S""fio ... 8",~ .. u 0/ Com"'erc â&#x20AC;˘.

vious, showing a gain of P113,851,893. The output of industries, fields, forests factories, mines and others are large. Industl'ies which were moribund or have lost prestige in world markets owing to the World War were rehabilitated during the first year of the new regime. Largely because of the policy of the Commonwealth of diversifying crops and industrializing agricultural products, hemp, copra, coconut oil, tobacco, and lumber regained prestige,

THE COMMERCIAL

The first year of the Commonwealth has also seen the change in the attitude of the people toward their leaders and the Government. As a whole, the people have become more peaceful thanks to the policy of ameliorating the conditions of the masses, of giving full dinnerpaiis and fixing a minimum pay for wage-earners, of giving relief to the unfortunates, of providing work for unemployed by opening up Mindanao for settlement, and of buying homesites for tenants, To be sure, there are individuals who bob up now and then among the crowd and express dissatisfaction. Their number has dwindled since the Commonwealth. The contrast is still within anybody's recollection between the state of affairs before the establishment of the Commonwealth when mobs fl'equently sh,owed their heads and thousands

INDUSTRIAL MANUAL of persons constantly flung themselves in seard, for social justice and the situation since the Com!D1onwealth was established when everybody has since become obviously contented. During the first year of the Commonwealth it was also noted that the people have had more confidence on the duly constituted authorities, especially in the judiciary, not because the power is exerc;sed by Filipinos, hut because the Administration has openJy punished erring officials and removed corrupt public servants. The new government has created the Court of Appeals for a prompt administration of justice, raised the category of the Bureau of Justice to imbue respect, and removed justices of the peace and judges of higher courts as object lesson to erratic officials . . . -

OUTSTANDING ACHIEVEMENTS OF THE COMMO~WEALTH OF THE PHILIPPINES DURING ITS FIRST YEAR *

HE FIRST year of ~e Commonwealth of the Philippines justly deserves an honored chapter in the history of nation-building. It is bejew~lled with outstanding achievements the enumerat ion of which should be a pleasant task t o every Filipino who takes infinite pride in the

ca pacity of his people f or self-government. On the eve of the inauguration of the Commonwealth of the Philippines. as many will recall, hundreds of political writers. critics and calamity-howlers, nlany of them trad: tiona l e nemies of Philippine independence, express€d themselves freely on the dangers that beset the Commonwealth Government. They tried to demonsb'ate by marshalling what they believed to be indubitable facts that chaos and ruin would attend t !:e transition period thus defeating the goal for which the Tydings-McDuffie Act was passed. SOllIe of them went so far as to call the Independence Act America's greatest blunder a s colonizer; that it was certain to be a suicidal experiment for the FilI pinos a nd f a ta l to the prestige of the United Stat2S as a world power. In other words, these gloomy prophets could see not hing but a perilous future f )r the Philippines on the eve of the inauguration of t he Commonwealth, believing as they did that th~ Filipinos are neither fit nor ready to run their own government . IT DID N OT TAKE LONG, however, to disprove the allegations of the enemies of Philippine independence. ']'he first year of the Commonwealth of the Philippines conclusively proved the contrary. Jnstead of the predicted chaos, peace has been firmly • B u E L' AS G. CORr(lI'tAL. Collt~t 01 L ~!D. A le"o" J. M o " i/". l;IC." d(d Pi,,1 Pri:r in., Nat. '·"":,,,id e e "(l1I Conleal C""ducud 1>11 Ih. Co ,,, ,,,,, ,,,,,o(l'lh "" tho Oc.a. um ()/ Ih~ Pi r.1 A "" ,u,.aru 01 th. Ca",,,,o,,,,,.a'th 01 the Phili p p,,, ••.

established throughout the country; instead of the anticipated disaster, prosperity has been ushel'ed in; and instead of national ruin and decay, national gl'owth and progress have been given, a <; nevel' before , gl'eater momentum. For the ignominy of failure , forecast by the enemies of Philippine independence, the Filipino people under the Commonwealth have substituted the glory of success. How

PHILIPPINES

7. P ublic calam;ti"" of all lor ta hnve be~n Rbi), met by the Government. oither by emergency legi.lation Or by Presidential proclama t ion. Unde r the Comma'''''ealth tllo people can ",n auured Ih"t the Governmont will always be ready to rueue them fr om hu nRer . di.u"o. notur" l di.".le r•• o r OthM calnmitiea. S. Tha educa t ion 01 t he Fili pino )'outh haa hcon duly ntt ended to. and t ho nbl""t educa t or. 01 the coun t ry. i" .... ptctive of creed and poli t ica l bolie!. hnve been commi.seioned to wark out an edueaHanal I. Tho ""mplate testarntio .. of the people'. raith nnd confidence I),alem that "'i ll b~t aerVO the enda of education ;n the Pbilippines. ;11 the eound"""" and alllbil;!)' of their Governmtnt. TIIII lin. been The dctermi .... tion 01 the Commonwealth to push to the limit and Iluoined by onUati"g fo r the Government aervice men who are true. live full forea to ebe constitutional provision thRt comput.ory primary tried. tested nod trained ror tbe .crvice of tho Fatherland. Guided in.t ruction will be undertaken by the Stale. allow. Ihat the educatian b)' the Inmp of experience, relig;o".ly elin,in, to the conviction .I~ .. t of Ihe children in the Philippin~ constitutes one of the mOlt magni" !lublin office i, " public trUJII. and fore,'cr inlpired ~)' tbe dIVine ficent oblesliollS of tho Commonwealth. ']}Mk of p,I,;"ti.... , these loy,,1 publio l .. tVI'n!,! conunue to ~bow 9. Health and "Dnitary problema are beinlt hndl .... effieielltly. to thl! Filipino people thot their Government hna been &oubhabed .. hile tho atllletic activities in the country .re being eneouBled and not to ""plnit thorn but to promote their comn'on "'(llra re. and eiven due incentive. Th e sending 01 the nntion's best mthletes 10 whon tho Governmeot hos ea rned the r ~-lIpoet. fnith and eonfidenee Be rl;n is an n nmple 01 how inter~led the Common,,·el.th Govern_ of tho people lo r whom it htu been instituted. thnt Gove rnme nt ment is in the physical nnd morlll welfare of tho Filipino ),outh. become!' no .table nnd os sound ns tha Rook 01 Ages. 10. The Commonwealth'. pnt ronneo of the ez!ensive campaign 2. The lny inll down of the s"Iid ,truoturc lo r the lutura Phil. for national econom ;e protection;"m with the lIim in view to enCOurppioo Ropubl;c in Meordonce with the Philippino Co..,titution nnd aging private iaterest to enter bu~in MII Bnd estnblish induat ries. i. the plntform of tho Coalition Pllrt)'. T hrough n striell of systematic indica!i,'o of the doterminat;o" 01 tbe prtl!en t Government to pwzh renrll!\n;ul;on •• ond eco nomical. .impl" aod efficient gavernmentol throullh 1\ g;anntic prOlfl\m af ~eonomie developmont M 1\ neeea."ry a)'! lem hn heen estllbHshed; Under tbis 1),lIe.n high ularies condition to n politienlly independent Ph;lippinu. ha,'c been re l~on"bly reduced ... hile unn,eeua ry po.itio"," ond offieu 1l . The esplait"tion of Our me.,n! of tranapartation has belIava heen elimirAted. And t o.. oeeuro the atriet~t economy in come tho obj«! of "criou. concorn 01 the Go,·ernment. ROMl~ and gO"ernment o.pon.u. a system. 0\ ample and effician~ ~.caliution hridgel ore now under eonstruetion to give the people in the rurah.. been provided by thc creatton of n Budget Comm,..,on "nd by di!tricta l.ei1itiu to transport t·heit products to the marker.&. Even keeping thn offien 01 the Auditor-General "independent from atber the elploitntion ola eri~1 traosportation lou been liven due aUenlion. branohea 01 tho Government ~ ",I .. bsolut"ly Iru Irom .. lL political T ho ntlitudo thnt the Commonwul th b .... hown in I·he epoch . interferonro.·' making fl~ht of Arnaix and Calvo to Sp~in. i. n cnnvincinj: IIrgument a. T ho mni nto"nnco of a compot,nt nnd independent judithnt the prOMent Government ;" ~ll·elllbrncing in ill ;nteruta nnd e,,,,), in thn Philippines. B y appointing mcn a l unimpeachable nclivitiu . chDTOctcrllnd recognized abilit), .whc, eaolcmn du~y it i. to administer 12. Tbe women have aloo been Iliveo n N"w Deal under tbe justico without fear or fnvor p romptly and impa rti"l!y. t he CommoaCommonwealth. The desillnation. b), P residential proclarnMion. wetlltb hnl been nblo to eroct 11 strn ng bu~wark 01 individual rights of Novem~r 23 to 29. 1935. ,\I the First National Girl,' Week and nnd to accuro the but lind most nRoetive ,unrDntee olainat oppr"'!tho pauage of the Plebi!eite Bill on "'Olll"n ."lI'rale an irrefutable 'ion and usurpntion from Yarloua aourCU. The utmost ca re is ligna that the Filipino womeO will be fairly treated under the Combeing e~orci.ed by tile Department 01 Jultice in the .eleM'on of manwullh. jUliticea of the petlce in order "to ,t renlthen the laith of the commao 13. The foreiene" in the PhilippiD IIa ha"o been a,"ured ample peoplo in our eourh." When the reorlRnizctian of the j"diciary. prolect ion. thut eonviodng tbem tbot it " not u ...... fe to iuveat . hDll hnvc beon completed. the Filipino people may rut ","u red thoir monay under the Filipino lIag. IhM the men chosen to adminilzter jUll i ~e and interpret the IRW bDve been lel.cted lolely on the bn"u. of merit. .terling cba racter ... nd H. The noble eaule of aoeinl j\l-lltice hal been tremendO\l-llly

tr ue it is that the days of the fal ~c prophets are no more ! Outstanding a mong t he a ch ievements of the Commonwealth of t he Philippines du r ing its first year are :

4. Tha Civil Scn';ee. upon whioh ultima t oly depend. nn bon""t nn d omcicn~ IIOvc"""ent . ha6 been reconst ituted . 0 n. to amb ra ce "n bmnohcs lind aubd;visio"," of the Go " or nment thus lI~ uring t he pooplo. rioh nnd poor nlike. thot "ndor the Commonwel1lth merit nnd not ;nHuonce .hnl! be the b~,io quolification rar public employ. ment. Tho erOltian of the Civil Servico Commiuion now under .. n eblo C'ommiMioner. ahows thnt the Commonwealth Government u. "waro 01 t ha importance of I1n effie;ont Civil Service S)'stem in the Immework of n .ucc"""fulgovernmont. 5. Labor. without unnoe"""arily IIntagonilinl cmpitml. has beell !tiven " Now DellI. By the cnaetm~nt of anme lind WU.O labor legu.lntian nnd tha i'suance of timely Eueutin Ord"I'II. tho labor clel1Ienill of tho countr)' hllvo been the rctipie"t. of generous conCc!'!ion from tho Governmont. Ne"or befo ro hnve tho Filipino l"borers been &0 JusUy tre~ted 00 tcd"y. O. Another Now 00,,1 hna been ostondel! to Min d Rn no. thnt 'T'<lIIllIu ro blR"d of ~he Oriont. EJlcI>.;vl) public wu rk8 projcel~ and ~omp.ehensivo plOnF for the uploitotian of th"t vi,gin po,tion of the Archipel/ollo. U lin elf~ct;vo WIly of .olvin", lhe mueh·fetl red Davao prnblem. !\TO now uodorwDY. Tho Nllt;onal AOIembl)' has been Ietlted a polioy 01 eventually conve rtirll Mindanao in t o the ,,,,na,y 01 the Phi lippines.

advanced by the Government through iill multiple ae,ni_governmentnl entit ies ".ho.e duty i~ i . to di. pens" hum"nitnrinn "id to need)' and ind;!Jont memben of tha com munit)·. 15. Lut hut not leut 01 the oul.tanding ochievements of tbe Commonwealth i. tile comprehen:!iv<, progru", ot " .. ~ional de/eme In the words of President Quezon lIimacl!. "Our t>ros;.anl al national delenl o muat Serve notice upon the world that the citixcno el th .... e !oland. Bfe not to he Bubjugnted." Indeed. the enthuaia.m with which our prOlrDm of nHlional defeRS" i. "cing pursued by tbe FiLipioOl ahowl VU)' clurl)' how Icaloualy we are cnncerned with the illtegrity of our cnunt.}'.

These are the outstanding aehievements in the f irst year of the Commonwealth Government. A voluminous work would be t he I'esult did we at· tem pt to recor d ever y achievement of the Commonwea lt h, but the fo r egoi ng is sufficient to con vince the pessimistic cr itics that t he Filipinos, contrary to t heir gloomy expectations nl'e capable of running t heir own Government.

THE COMMERCiAL

But these achievements CQuid have not been made possible without the presence in the Government of the one man whose dynamic personaiity is Imown to all, whose statesmanship is recogmzed the world over, whose experience in the science of government may be equalled but never surpassed , whose foresight has never failed to benefit his people, and whcse patriotism makes him the foremost living Filipino-His Excellency, Pres-

INDUSTRIAL MANUAL ident Manuel L. Quezon, most fittingly referred to as a Man of Destiny. Indeed, to discuss the Ilchievements of the Commonwealth in its first year of life without mentioning the name of President Quezon would be equivalent to writing a book on Christianity without mentioning the name of Jesus Christ. We may well say that a great future lies ahead of the Philippines.

XXXIII INTERNATIONAL EUCHARISTIC CONGRESS IN MANILA T IS PROVIDEN.J'IAL THAT THE PHILIPPI!'-ES SHOULD HAVE DEDICATED THE FIRST YEAR of the 60mmonwealth to a spiritual preparation for the XXXIII International Eucharistic Congress. Tfie political philosophy of the y :m ng state is being guided along sane, sober, conservative lines an~ not headed for violent changes and social upheavals: temptations under wI-.ich many young states have succumbed in the past. Naturally, here, the spiritual social and political outlook of the country must be influenced by the majority of its citizens, and hence where Catholics constitute from ninety-five pel' cent of the population we need not expect anything but a prepondelatingly Catholic atmosphere. Some foreigners who come to the Islands arc quite SUrprised at the larg<l number of Catholics they meet here, but after a while they find it is not bad atmosphere to live in, aild not a few elect even to join the religion of the Filipinos.

BE THAT AS IT MAY, the fact is that the holding of the Eucharistic Congress in Manila was receiyed by t he vast majority of our citizens in a most sympathetic fashion, For the first time in history, the Far East was the scene of a great religious celebration in which the whole Catholic world participated. And the Philippines itself held the major part-that of the host who welcomes pilgrims from all the countries of the globe to kneel with her, on her own hearth, in p!'ofession of their common faith and in adoration of the Lord of all, The people of the Philippines are a renowned Catholic people. Alone among the nations of the Far East, they have that honor and responsib:lity. There are Catholics, loyal, selfsacrificing 2nd everincreasing, in the other Oriental countries, but Chine, Japan, India, IndoChina and Maillysia are pagan lands. The Eucha)'路 istic Congress was at home in the Philippines and from the palm-fringed shores of the Pearl of the

Orient it cast its light upon nearby regions that contains the greatest assembly of non-Ch!'istians in the world. Everything possible was done to make the Thirty-third International Eucharistic Congress a success for the spread of Catholic culture in the entire Orient. Every prayer said, every sac~ifice made, every addit:onal pilgrim is a new radiance to make Our Lord ir. the Blessed Eucharistic more apparent and more attractive to Eastern Asia. Seldom if ever in the history of International Congress has the participation of the individual Catholic carried with it such m!~si ol"'ary possibiJitie!<. such power for influencinR' fellowmen. A n Euchal'i~tic Congresf; is an affirmation of orthndox Christianity, a great public act of r.''1;t h in the Divinity and Humanity of Jesus Christ, True God and True Man. in whose Nnme alone we mav be happy and contented in this world, and attain endless bliss in Heaven.

PHILIPPINES

REORGANIZING THE PHILIPPINE GOVERNMENT' OINCIDENT WITH THE INAUGURATION OF THE NEW PHILIPPINE COMMONWEALTH, s~ps towards the reorganization of the gov~r nrnental machinery and structure were begun by President Manuel L. Quezon. With le s~ than a month from the change of political status as provided for in the Tydings-McDuffie Law, the Chief Executive had submitted a measure to the National Assembly then in special session, explaining the necessity of devising plans for the reorganization of the government to effect economy and efficiency in its operatieD, Ilnd recommending a Government Survey Board of three members not in the government service to make a factual survey of all departments of tl>e public service and submit recommendations concerning reforms in the governmental organization. classification of positions, standardization of salaI'ies and wages, housing and equipment of various officc!; and such other matters as may be presonted for its consideration by the Chief Executive.

IN COMMONWEALTH ACT NO.5, the National Assembly enacted the recommendations of the President and, in order not to delay needed reforms and to avoid unnecessary expenditures, the Chief Exceutive was given ample authority for a period of six months to effect changes in the different departments, bureaus and offices in the government with powcr to transfer functions, appropriations, properties, bureaus or office to another, classify positions and standardize salaries, cl{minate unnecessary activities or personnel, reduce salaries, combine positions and do whatever rnay be necessary to effect economy and efficiency in the governrnent service without prior specific legislative enactment provided thal any ftctiun taken by the Pres'dtmt pursmmt to that authority sho,;lci be reported to him to tho National Assembly fur approval at its next regular sel;sir.n. Fifty thousand pesos was appropriated to defmy ~'xpenses of I,he Government Stu'vey Boaro.. The act was signed by the President on December 31, 1935 and on F~bruary 14 following, he appointeJ the three members of the board. The organization of the Board's offices nnd personnel took shape around March 1, 1936, when the actual survey work of the government of{ices began, with Mr. MateG Occena as acting secretary. Mr. Manuel S. Rustia, Assistant Dir~ctor .,f Commerce acted as secretary and executive off;cer from May 2 to September 30, 1936. As it may be seen the subject covercd by the law was extraordinarily extensive and complex. In fact the law devolves upon the Survey Board mat;.. tel'S which have been the subject of three or more â&#x20AC;˘ Bv MIOOt:L UI<ION.

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a.... mm . n/ Sl<"~ B ....,d.

commissions in the UnitC!d States and other countries organized with large staffs of t echnical and othel" personnel working iull time for long periods with huge appropriations. Our Survey Board realized that similar organizations could not be expected in the Philippines, and decided to do its best under the circumstances. FIRST STEPS TAKEN By THE BOARD Cordial cooperation has been received from all of the departments, bureaus and offices of the government as far as pressing demands of public service in their own concern permitted. The Honorable Francis Bu!'ton Harrison gave valuable assistance to the Board in connection with certain investigations and studies. Individuals a!so extended to the Board a most gene!'ous respor.ce: letters were received from practically every part of the country pointing out defects in the public service and making suggestions. Although some of them cannot be adopted in the general plan, yet they pointed to defective conditions which the Board is taking into consideration. The original plan of the Board was to carryon its investigations and draft its recommendations as a whole. The work was outlined and divided up among the members. Hardly had it be~n, however, when opinions in private and oificial circles made themselves felt to the extent that the Board was obliged to depart from its original intention of completing the entire survey alld submittinp." an integrated report, making it necessary to submit partial reports and recommendations on specific subjects .

THE COMMERCIAL

It should also be said in this connection that it \vas not possible for th(! Board to go into the minute details in mak:ng recommendations as that would mean besides a huge auxiliary organization, Commonwealth Act No.5 the entire personnel of the Board is to be obtained by detail of officers and employees of the government with the consent of the respective Department Heads. In doing this, t he Board has received generous cooperation from the vnriolis bureaus and offices, at t:mes even to the extent of sacrificing the convenience of those bureaus and offices. Nevertheless it was not possibl e nor desired that the regular work in any office should be crippled and many of those whose services were enlisted devote only a part of their time to the work assigned to them by the Board . Under these circumstances, the Board realized that all that can b~ done was to revise the fundamentals of the existing governmental organization and leave the detail\ to a Budget Commission as an efficient body to continue the wo)路k. Tn connection with the classi~cation of positions and standardization of sala!'ie~ it is the intention of ihe Board !"l1erely to lay down the general principles and the gl'ound work, a:ld entrust the actual enforcem,ent of the and classifica-

INDUSTRIAL MANUAL tion law that may be enacted upon recommendation of the Board, to a body of experts wnich as now constituted may well be the Civil Service Commission. During the six months given to the Chief Executive to make changes in the government organization without previous specific legislative enactment, five executive orders were issued by President Quezon upon recommendation of the Government Survey Board. These recommendations were tho:'!e which led (1) to the creation of a Budget Commission and a Budget Office; (2) to the transfer of the Navigation Division of the Department of Agriculture and Commerce to the Bureau of Customs of the Department of Finance; (3) to the transfer of supervision over provincial, municipal and city treasurers from the Department of the Interior to the Department of Finance; (4.) to the transfer of certain functions of the BU!'eau of Science to the other entities of the government like the Bureau of Health, Philippine General Hospital and the University of the Philippines; and (5) to the transfer of the collection of radio registration fees from the Bureau of Posts of the Department of Public Works and Communications to the Bureau of I nternal Revenue of the Department of Finance.

R'ZAL - LAGUNA INTERPROV INC IAL ROA D

PHILIPPINES Changes of the Bureau of Lands were made in cooperation with the Department Head a nd the Di rector of the Bureau without the necessity of a ny executive order. A report was submitted, though, outlining the policies which the Board recommended for the Bureau of Lands together with the corresponding bills requiring legislative sanction.

Other bills were submitted referring to appointments of subordinate employees and certain change in the sheriffs service has been suggested.

At the start it was the desire of the members of the Board to submit its entire report dur ing the present legislative session so that the National Assembly may take the proper action, but this has not been p.:Issible. Further more, the untimely deatb of Mr. Wencesl:l.O Trinidad has been a great setback in the progress of the work of the Board. ~fr. Trinidad was in charge of verl impor!<mt features of the work of the Board which now have to be taken up by other members. The Board is endeavoring by all means to pr ess the completion of its program at the earliest possible date.

DEPARTMENT OF JUSTICE HE DEPARTMENT OF JUSTICE is one of the executive departments of the Government of

the Commonwealth of the Philippines. It performs its functions under the executive author ity of the Secretary of Justice, subject to the general supervision and control of the President of the Philippines. The D epart~('nt has executive supervision over the Bureau of Prisons, and the General Land Registration Office. It also has the general supervision and control of the provincial sheriffs, the prolincial fiscals, the registers of deeds and all law oftices of the Government.

I N ADDITION to the bu reaus and offices men路 tioned, there have been addeil the Securities and Exchangc Commission, the L.ourt of Industrial Relations, the Divis ion of Investigation, the Corporate Counsel Division, the Anti-Usury Board and the Parole and Probation Office. The laws creating these institutions place their supervision in the hands of the Secreta!"y of Justice. Tlte Secl'etary of J1tstice.-Th e Secretary of Justice is the attorney-gener al and legal adviser of all government owned a nd controlled business enterprises. As such , he may assign to the law officers of these business enterprises such other duties as he may see fit, in addition to their r egular duties. When requested in writing, the Secretal'y~of Justice gives advice, in t he form of written opinions, to a ny of the follow ing functionaries, upon a ny question of law r elative to the powers and duties of themselves or slObordinates, or relative to the interpretation of any law or laws affecting their offices or functions, to wit: The President of the Philippines, the Speakcr of the National Assembly, the respective Heads of the Executive Departments, the chiefs of the organized bureaus and offices, the trustee of any government institution, and any provincial fi scal.

AOllllNISTRATION OF JtlSTICE One of t he first acts of American rule in the Philippines was the organization of a judiciary sys路 tem, simultaneously with the establishment of schools and local governments. In the Philippine Bill of 1902, the Congress of tbe United States implanted in the I sla nds the same guarantees of constitutional and individual liberty which may be found in the United States constitution, with the exception of the right to keep and bear arms and t he system of trial by jury. A r eorganization of the courts was effected and orderly procedure was provided for the trial of cases. In all crim inal prosecutions, a speedy and public tl'ial was guaranteed to the accused; his right to bail, to compuh:ory process of obtaining witnesses in hi~ faVo r, to be assisted by counsel and not to be compelled to be a witness aga inst himself. The same guarantees were rciterated in the J ones Law of 1916, in the Tydings路McDuffie Law, and now in the Constitution of the Philippines. Under section 1, Article VIII of the Constitution of the Philippines, "the Judicial Power shall be vested in one Supreme Court and in such inferior courts as may be established by law." Under pre-

TIlE COMMERCIAL

sent laws we have, in addition to the Supreme Court, the Court of Appeals. the Courts of First Instance, the Justice of the Peace Courts, the Mu路 nicipal Courts of chartered cities, and the Court of Industrial Relations. The Justice and judges of all these courts are appointed by the President of the Philippines, with the consent of the Commission on Appointments of the National Assembly, and hold office during good behavior, until they reach the age of seventy years, or become incapacitated to discharge the duties of their office. The Supreme Court.-The Supreme Court of the Philippines holds its sessions in the City of Manila. It consists of a Chief Justice and six Associate Jus路 tices, and sits in bane in the hearing and determina~ tion of all cases within its jurisdiction, The pre~ sence of six Justices is necessary to constitute a quorum, except when the judgment of the lower court imposes the death penalty, in which cases the presence of all justices is necessary to constitute a quorum, If on account of illn ss, absence, or incapacity upon any of the grounds mentioned in Section 8 of Act No, 190, of any of the Justices of the Court, or, whenever, by reason of tempbrary disability of any

INDUSTRIAL MANUAL Justice thereof or of vacancies, OCCUrring therein, the l'equisite number of Justices necessary to cons~ titutc a quorum or to render a judgment in any given case, is not present, the President of the Phil~ ippines, upon the recommendation of the Chief Jus~ tice, may designate such number of Judges of the Court of Appeals, as may be necessary, to sit tem~ porarily as Justices of the Court, in order to form a quorum, or until a judgment in the case is reached, The concurrence of at least four Justices of the C()U rt is necessary for the pronouncement of a judgment, However, in order that a law or a treaty may be declared unconstitutional, at least five Jus路 tices must concur, When the necessary majority to declare a law or a treaty unconstitutional cannot be had, the Court so declares, and in such case the valirlity or constitutionality of the act or treaty involved is deemed upheld, Whenever the judgment of the lower court im~ poses the death penalty, the case is heard and deter~ mined by all the Justices of the Court, and the un~ animous decision of all the Justices is necessary for the pronouncement of a judgment imposing the death penaltly, When the Court fails to reach a unanim~

LBGISLATIV8 BUILDINO

PHILIPPINES aus decision, the penalty next lower in degree t han the death penalty is imposed. Jurisdiction.-The Supreme Court has original j urisdiction over cases affecting ambassadors, other public ministers, and consuls. It has exclusive jurisdiction to review, revise, reverse, modify or affirm, on appeal, certiorari or writ of error, as the law or rules of court may provide, final judgments and decrees of inferior courts in I. All CMes ;n which the eOlutitutionality Or validity of any trC3ty.le", ordiDllneo, or e,lecutivo order or rClalMion ill in question: 2. AU OILSOl!I i"vah-jng tho lClInlity of nn)' tax, ;Iopoat. n'loSl!SIImcot Or toll, Or nil)' penmlty irnp o~ed io relntion thereto: 3. AIL CI.."" in wnieb the iurilldictioo of Any inferiot court ill ill ;!IIIlIe: ~. All oriminal casos in which tbo pcnnlty iropo!cd i. dcath or life imprisonment; 5. All CIvil CII'~ in whieh the value in colltroverflY exceed..!l -r25.000.00. to be I1IIccrW\noo by tile O"UI of " pany to t<>" c<luse or by olner ~omllOtent oviuen~. is invo,vcJ Or bro~/[n~ '" Q"e5t1on ; 6. AU other ca.1l.'I ill wmcn only crrOr3 Or q..tc..uon. of lllw arC 'nvolved.

The Court of AppealJ\.- The Court of Appeals was created on December 31~ 1935, and was formally orgam:ed on F ebruarur I, 1986, when the Judges of the Court were appointed. 'l'he creation of this Court answered a long.felt need. With its creation the Supreme Court has been relievt:d of its work of passing upon less important cases thus enabling it to devote more time to the study of questions of law, c!lpecially those that were expected to arise as a consequence of the establishment under its new Constitution. The Court of Appeals holds its session in the City of Manila. It consists of a Presiding Judge and ten appellate J udges. The Presiding Judge of the Court of Ap;;eals is so designated in his com· mission, and the other Judges of the Court have precedence according to the dates of their respective commission, or, when the commission of two or more of them bear the same uate, according to the order in wbich t heir commissions have been issued by the President of the Philippines. The Court, as a body, sits in banc, but it may sit in two divisions, one of six and another of five Judges, to transact business, and tho two divisions may sit at the same time. If the Presiding Judge is present in any session of the Court whether in. bane or in division, he pre· sides. In his absence, that one of the J udge attend· ing shall preside who is first in precedence. In case of a vacancy in the office of the Pres· iding Judge of the Court of Appeals, or in the event

of his inability to perform the duties and powers of his office, they devolve upon the Judge of the Court who is first in precedence, until such disabil· Iity is removed, or another Presiding Judge is ap· pointed and has qualified. In case of vacancy in the office of anyone of the Judges of the Court of Appeals, or in the event t hat anyone of the Judges is absent, or disabled, or incapacitated, for any reason, to perform the duties and powers of his office, the President of the Philippines, upon the recommendation of the Chief Justice of the Supreme Court, may designate a Judge of First Instance to sit temporarily in the Court of Appeals, until such disability is removed., or the vacancy is permanently filled. Jurisdictio7!.-With the exception of those cases falling within the exclusive jurisdiction of the Sup. reme Court, supra, the Court of Appeals has e.x· elusive appellate jurisdiction of all cases, actions, and proceedings properly brought to it from Courts of First Instan ce. The decision of the Court of Appeals in such cases is final. However, the Supreme Court in its discretion may, in any case involv· ing a question of law, upon petition of the party aggrieved by the decision and under rl,:.les and con· ditions that it may prescribe, require by certiorari that the case be certified to it for review and deter· mination, as if the case had been brought before it on appeal. The Court of Appeals has original jurisrliction to issue writs of mandamus, prohibition, injunction, certiorari , habeas corpus, and all other auxiliary writs and process in aid of its appellate jurisdiction. All cases which are er roneously brought to the Supreme Court or to the Court of Appeals are sent to the proper Court, which hears the same, as if they had originally been brought before it. Eight J udges of the Court of Appeals constitute a quorum of the Court for its session in banc, and foul' judges constitute a quorum for its sessions in division. All of the cases of the Court of Appeals are allotted between the two divisions thereof fol' deci· sion, and the affi r mative vote of the majority of the members of the division is necessary for the pronouncement of a judgment. Whenever in any criminal case submitted to a division, the division, or any member thereof, is of the opinion that thE' penalty of death or life imprisonment should be imposed, the Court refrains from entering judgment

THE COMMERCIAL & INDUSTRIAL MANUAL

thereon j it certifies the case to the Supreme Court for final determination, as if the case had been brought before it on appeal. Whenever a division of the Court of Appeals fails to reach a decision in a case submitted to it, or whenever such division so orders, or whenever the Presiding Judge, in the exercise of his sound discretion, so orders, the case is heard and determined by the Court sitting in batIe, the affirmative vote of a majority of at least six Judges being necessa ry for the pronouncement of a judgment. The COU1"t of Appeals, sitting in ba.ne, from time to time, makes proper ordcl'S or values to govern the allotment of cases between the two div~ igions, the constitution of such divisions, the regular rotation of Judges between t hem, the filling of vacanci<!s OCCUrring therein, and other matters relating to the business of the Court; and these rules continue in force until repealed or a ltered by it or by the Supreme Court 0 the Philippines. The Courts of FirstV7Istance.-The Courts ,)f First Instance, establisheJ throughout the Philippines, have general original "jurisdiction. The judicial function in these COU1路tS ~ vested in judges of first instance and judgeS-at-la'fC of first instance.

The country is divided into nine judicial districts, assigning to each judicial district from four to seven judges. While each Judge IS appointed for one district, he is designated to preside only one particular court within that distl'ict. His services in other courts within the district may only be availed of if the judge in that court should certify that the services of another judge is necessary to help in the disposition of cases in that court and if the Department of Justice should concur in that certification. A judge appointed for a particular district cannot be designated or transferred t o another district without the approval of the Supreme Court. Therc are now forty-eight judg~ of first; instance and five judges-at-large of first instance. The Justice of the Peace (;0i.t 1路tS.-A justice of the peace court is maintained in every municipality in the Philippines. It is vested with jul'isdiction to try parties charged with misdemeanors, offenses, violat ions of regulations adopted by the respective provincial boards and violations of municipal ordinances committed within its territorial jurisdiction' in whifh the pena!ty provided by law does not exceed six months' imprisonment, or a fine of not more than two hundred pesos, or both. It is also em-

PHILIPPINES powered to conduct preliminary investigations of all crimes and offenses alleged to have been committed within its territorial jurisdiction and cognizable by the courts of first instances, and to make inquests upon dead bodies. The Court oj imiustri芦l RelatiollB.-The Court of Industrial Relations is created by Commonwealth Act No. 103, approved on October 29, 1936 The court has jurisdiction over the entire Philippines, to consider, investigate, decide, and settle any question, matter, controversy or dispute arising between, or affecting employers and employees or laborers, and landlords and tenants 01' farm-labore r s, and regulate the relations between them, subject to, and in accordance with, the provisions of Commonwealth Act No. 103. The court is presided over by a Judge appointed by the President of the Philippines with the consent of the Commission on Appointments of the Nat.ional Assemb)y, The Court takes cognizance for pm'poses of prevention, arbitration, deci\ion and settlement, of any industrial or agricultural dispute causing or likely to cause a strike or lockout, it ~he number of employees, laborers or tenants or farm-laborers involved exceeds thirty, and such industrial or agricultural dispute is submitted to the Court by the Secretary of Labor, or by any or both o~ the parties to the controversy and certified by the Secretary of Labor as existing and propel' to be dealb with by tbe Court for the sake of public interest. The Court has power to conduct hearing in any Illace for determination of a question, mattel' or controversy within its jurisdiction, proceed to heal' and determine the dispute in the absence of any patty t hereto who has been summoned oi' served with notice to appeal', conduct its proceeclings 01' any part thereof in public 01' in private; adjourn its hearings to any time and place, after any technical matter or matters of account to an expert and to accept his I'eport as evidence, direct parties to be joined or !<~l'iken ('ut. from the proceedings, correct, amend or waive any errol', defect 01' irregularity, whether in substance or in form; extend any pl'cs~rihed time; ~ivc all such dircctions as it mny deem necessary or ('xpcdient in the determination of the dispute befo'!'.:! It; and dismiss any matter or part of any matter, or refl'ain from henrin~ further Ot' from de c mming the dispute or Pnl't thereof, where it is trivial or where further proceedings by the Court are not necessary or de~ir(\ ble, For the sake of expcdiency and depending on the nature and extent of the facts and que~tions

involved, the Court may refer any industrial or agricultural dispute, or any matter under consider~ alion by the Court w a local board of inquiry, a J:l'ovincial fiscal, a justice of the peace 01' any public official in any part of the Philippines for investigatIon, report, and recommendation, and may delegate to such board or public official such powers and function s as the Court of Industrial Relations may deem necessary. Such delegation does not affect the exercise by the Court itself of any of its powers rnd functiol'J 'l, The Court may take into account or set aside the recommendation of any such board (;1" public official in deciding the dispute and making its decision, award or order. The awards, orders, or decisions, of the COUl路t of Industrial Relations may be appealed to the Supreme Court by writs of certiorari. The Bm'calt of J1lstice,-The Bureau of Justice constitutes the law office of the Government of the Cnn1ll,nnw fllth of the Philippines and by it is performed duties requiring the services of a law officer. The legal staff of the Burenu of Justice consists of one Solicitor-General, three Assistant Solicitors-General and nineteen Assistant Attorneys. The Solicitor-General, as chief of the Bureau, is accorded the rank, consideration, privilege and honor 01 an Under-Secretary of Department. He 2tts for, and represents the Government of the Commonwealth of the Philippines, its officers, and agents in any official investigation, proceeding, or matter requiring: the services of a lawyer, Among other things, it is his duty, in person or by proper suhordinate: G

1. T o prepnre. UPO II re'luut of lhe Pr",ident of the Phi! ippinu Or other officer of the Commonwe~lth Governm ent, draft. of con_ tnct![ . form . , or olhor wrilingl needcd for official use. 2. To repro . .. n! the peopla of Ihe Philip!,'I1'" ,n the Supreme

~;~:~~~tO'1 i,~ !~~ifcdurit~{~\ r:r..~i'1~!:~ ~~~r,::::.":.~, i~'~C!C:::~rnt;:~~

,n the S"prcmo ("o"rt ar in the Co"rt of Appc,t! ,n ,,\1 civit B~tione lind ~petl(.l procee<l'lI~e ,n which oither of SA id Governments Or AOY officer thereof in hi5 officiAl c!lpnei!~' ,. n pnn)'. 3, To p,oeecllta or defend in the S"preme Co"rt Or in the Court of App~~t" ox<,ept 118 otherw'.a ~pecinlly prO\';ded. ,,11 enu.", ,n ",hieh 0 provillce nmy be Aport}'. ~. To instit"te nlld pro~ecute, at the re'lu C!lt of the President in the 1'lIilil'lI1i""" or other proper offi"e. of the Common"'e禄!th GO"ernmen!, o.tion~ on hondo or conttnet.s i/'l which the Go,'ernment i8 intcr~Sled, Ul)on bre,eh thereof, of th~路G.:':~r~~~c'~~ ~:'~'\d~c~:;l~~e ~hin~pi~~~ to: ~.'1.1;..m:~ ~e f~;;~ with the 'lpprovn! of the Pre_'ident of tho Philippine.. employ COlin.,,! to n... ist in sllch collection, G. To in!t;tllte ond prosecute netioos to enforce pcn!l.lti es or forfoilur"" under Inn'S of the United SlIle! in forte in the Philippines .

When in his opinion the public interest so requires, the Solicitor-Gene-al, with the approval of the Secl'etary of Justice, may cmploy and retain in the name of the Government of the Commonwealth

THE COMMERCIAL

'If the Philippines s uch attorneys as he may deem necessary to assist him in the discharge of his duties. When a citizen o:fl the United States dies leaving properties in the Philippines and no regular admir.istration of his estate is had, the Solicitor-General, l:ither in person or through a delegate designated by him, takes possession of the estate, makes a complete inventory thereof, and files the same with the Auditor General. Then he ascertains the names and residences of the pel'sons lawfully entitled to the ES~tate and proceeds to settle the same. He charges for his work such fees as he may deem just, whICh i'" paid into the Treasury of the Commonwealth of the Philippines. Tho.: Public Sel'Vice Com1lt1SB路ion.-The Public Commissioner and a Deputy Commissioner, both of whom are appointed by t he President of the Philippines, with the consent of the Commission on Appointments of the National Assembly. The Public Service Commissioner has general (,xecutive control, and supervision over the work of the aJ'ld of its members, body and personnel, and lless of the Commission. ar.ts on all matters delegated

INDUSTRIAL MANUAL sioner. He also acts in pJace of the Commissioner dUring the absence, illness or incapacity of the latter. The Public Service Commission has a legal divi. sion with one Chief Attorney and four Assistant Attf'l'neys; an Industrial Division, Transportation Division, and an Accounting Division. It also hag a secretary, who takes charge of its administrative business and performs su.:h other duties as may be requircd of him. The secl',;otary is, at the same time, the recorder and official reporter of the proceedings of the Commission and ha<:: authority to administer oaths in all matters coming under the jUrisdiction of the Commission. He is also the custodian of the I ecords, maps, profiles, tariffs, itineraries, reports, and any other documents 'lnd papers filed with the Commission or entrusted to his care, and is responsible therefor to the Comrr路ission. The Commission has general supervision ano. regulation of, jurisdiction and control over, all public services, and also over their property, property rights, equipment, facilities, and franchises, and in the exercise of its authority it has the necessary powel'S and the aid of the public force. However, the Commission has no I':ontrol or jurisdiction over ice plants, cold storage plants, or any public ser-

/u.A1I TUNNlIL-BONTOC AT SADANGAN' ROAD, MOUNTAIN' PaOVLNCB

PHILIPPINES

vices operated b.,v the Gov~rnment of the United Davao. These colonies are used for the rehabilita_ States in the Philippines exclusively for its own use. tion of prisoners, The colonists are provisionally nor over municipal warehouses nor animal-drawn granted suitable plots of land within the reservaVt'hicles. The Commission has also no control or tion for the purpose of l'ultivating and improving supervision over air craft in the Phi lippines, except the same, and are furnished with tools, implements with regard to the fixing of maximum passenger lOnd agricultural supplies. They are allowed to have and freight rates; nor over the Manila Railroad their wives, children, and women to whom they are Compnny until the same is controlled by the Gov- to be married, transported to the colony at Governernment of the Philippines; nor over radio compa- ment expense. They participate in the proceeds of nies or concerns except as regards the fixing of rates. products grown or manufactured by them, On the No public service (as defined in Commonwealth expiration of the sentence of any colonist, he may, Act No. 146) is allowed to operate in the Philippines sl:bject to r~gulations, reside upon the reservation without having first secured from the Commission ~nd to cultivate land and occupy a house to be dea Certificate of Public Convenience or Certificat2 signated and selected by the superintendent of the of Public Convenience and Necessity, as the case colony. may be, to the effect that the operation of said s~r足 The General Land Registrat'ion Off1ce.--'1'he vice and the authorization to do business will prf1- General Land Regbtration Office is maintained in mote the public inteJ.:ests in a proper and suitable the City of Manila, for the due eXE'cution of the manner. laws relative to the registration of land, It is The Commission has its office in the City of under the supervision of the judge of the fourth Manila but may hold hearings on any proceeding branch of the Court of Fh'sl Instance of Manila, at such times and places, ~hin the Philippines, as The General Land Registration Offi("e is the it may provide by order in writing. head of the clerical and archival system of the Courts The Commission has authority to impose fines for of First ilnstance throughout the Philippines in the violation of the terms of any certificate or order, E'":".ercise of the faculties conferred upon them or decision or regulation of the C01fmission. l!pOn judges of first i!lstance in refcl'ence to the The Supreme Court has jurisdiction to I'eview rE'"gistration of hmd and constitutes a cE'ntral reany order, ruling, or decision of t~e Commission and 1,ositol"Y of records in matters connected thereWith. to modify or set aside such order, ruling, or deciThe General Land Registration Office has a sion. The procedure for review is prescribed by chief and an assistant chief. The Chief is deemed rules of the Supreme Court, to be clerk of the fourth branch of the Court of The Rureau 0/ Prisons.-The BU1'eau of First Instancc of Manila in the exercise of its funcPrisons has general supervision and control of Insu- tions relating to the registration of land. ler anel provincinl prisons and of all penal settleThere is a chief surveyor in the General Land ments and is charged with the safe-keeping of all Registration Office, who has general supervision of prisoners confined therein or committed to the cus- all other surveyors in said office, and of all plats, l.:Jdy of said Bureau, plans and work l'equiring the services of a surveyor. The chief officials of the Bureau of Prisons are He examines applications, plans, and technical desthe Director of Prisons, the Assistant Director of criptions in all cases filed whether in the provinces Prisons, and the Second Assistant Director of Pri- or in the City of Manila, and promptly makes resons, These officers are sUpplied with furnished port to the court of any errors in the plans and quarters at the main prison and are allowed laun- technical descriptions and any conflicts between desdry set-vice and such other services to be rendered criptions in the cases and description of adjoiningby prisoners as are sanctioned by the Department lnnds for which application for l'egistration has been of Justice. made. He prepares notices for publication and final" The main pt'isoll is sit'mterl in the City of Ma- decrees in all adjudicated cases. nila, but will soon be tr:msferred outside the city The Sccll1'itics and Exch(L1lge CO?n1nissioll._ limits, 'fpe . Securities :md Exchan~e Commission was PenRI colonies are also being maintained in created by Commonw(':\lth Act No. 83 on OctobE'"r lwahig, Palawan j San Ramon, Zamboanga j and in 26, 1986 This Commission is under the direction.

THE COMMERCIAL & INDUSTRIAL MANUAL

of a commissioner, appointed by the President of the Philippines with the consent of the Commission on Appointments of the National Assembly. The Commission is in charge of the registr a. tion of securities, brokers, deal ers and salesmen eng aged in the business of selling 01' in any way dealing with securi ties and exchanges. No secul'ities except of a class exempt under any of the pr ovisions of the Securities Act can be sold within the Phil ippines unless such securities arc registered or licensed. The Commission may revoke the registra tion of any security and t he license to sell a speculative security by entering an order to this effect, with its fi nd ings in respect thereto, if upon examination into t he affairs of the issuer of such security, it shall . appear t hat the issuer is insolvent or has violated any of the provision!" of the Secul'ities Act or any order of the Commission. The Commission has aeoct>ss to and may compel the production of a ll the bfoks and papers of such issuer. The registration of a broker, dealer and salesman may be refused or revoked by the Commi~sion if "iter hearing it is found t~t the registrant has violated any provision of the ecurities Act or any ;:egulation made thereupdel'; l' has made a mate-

rial false sta tement in the application for regis tration; or has been guilty of a fraudulent act in con路 T.E:ction with any sale of securities ; or has demonptrated his ullworthiness to transact the business of broker, dealer, or salesman. It. is unlawfnl for any broker, dealer, salesman or exchange to make use of any facility of an exchange in the Philippines to effect any transaction in a security or to report such transaction, unl ess such exchange is registered as a securities exchange under the Securities Act, or is exempted from such registration by t he Commission. Th e Division 0/ l nvest'iga tion.-A Divis ion of Investigation under the Department of Justice was created by the passage of Commonwealth Act No. 181 on November 13, 1936. This Division is now in the process of organization. The duties of the Divi sion will be to help in t he detection and prosecution of crimes i to acquire, collect, classify and preserve criminal identificat.ion records; and to obtain information on all matters affecting the public interest. The Chief of the Divi sion of Investiga tion and wch of his subordinate personnel a s may be specifically designated by the Secretary of Justice in their r especti ve appointments or commissions, will

PHILIPPINES be peace officers, and are empowered to serve warrants and subpoenas issued under the authority of the Government of the Commonwealth; to make searches and seizures under legal warrant for vioIbtions of the Jaws of the Philippines; to make arrests without warrant for a crime which has been committed in their presence, or within their view, or in cases wher e the person making the arrest has reasonable grounds to strongly believe that the person so arrested is guilty of such crime and where there is a likel ihood of the person escaping before a legal warrant can be obtained for his arrest, but the person arrested shall he immediately taken before the competent court of justice. fJ'he Car1)Oratc COltnsel Divis-ian.-The Corporate Counsel Division, undel' the Department of Justice, has full control and supervision over all the legal divisions of the different government; owned and controlled enterprises. It assists the Secretary of Justice in his work as ex-officio legal adviser of these enterprises. The Anti-1Js'/Iry Boowl.-The Anti-Usury Board was created by the passage of Act No. 4109 on December 6, 1933. The Boa d is composed of the SecrebU'y of Justice who is th\ ex-officio Chairman thereof, the Dircctor of Labor, and three additional members appointed by the Pre~ident ot the Philippines with the consent of the Commission on Appointments of the National Assembly. The main purpOf;e of the Anti-Usury Board is to combat usury in all its forms, to coordinate, as far as possible and practicable, all government agencies and influence~ interestedly in the enforcement of the. Usury Law, and to investigate social conditions in the Philinnine T!!lands. with a "jPw to minimizirlg, if not eliminating entirely, the evils of usury. The duties of the Anti-Usury Board are: Til i''''r'li~~ I(l usury C1O"S lind t o »r'>1~"ut" 1111 violMo", US"')' !.,w; Tn 1 ,.n;,h proies.iono.l ~en·iee.. In viet ib) ' nl U!Ur\' who nr" poor li nd., oonOI ~tford 10 P-'Y Ih" ""llon_"o of litig Ilion in d.o ""uri'; 3. To Onl~r -., .mitus curiqe in 1111 eour~ e~'et whirh m~)' '"we ri.co from U~O"O".!1 InnMelioll:l; " . To Mbilr"u' ;n "n)' conflict in,'nlvin" d~bts eomplo.inerl of as U.uri01>8 b)' uny of Ihe parI;"" eoncerncd; . Ii To d.w;',c w~Y8l1nd mel"" lor the cnrt)'iu~ 001 of on educo Ilonnt prop 11\ ""It!. ~g'''n~1 usury; 6.. Tn h~lp in tho ".u.bH,h moM of credit fncmti"". ",horcb)' people ,,, nco!\ 01),,1<1 o\"'"n mono) On eqa)' te.ms; 7. Tn oTI;.n;<" l<>enl 8nb"omm;\!cc' in Iho 'uul'ieil>nliti"" aud proviMhl, oh"plcrs. i~ ovc r::- capital 01 tl,o p"w'nc(l.l. to h~lp the 1l0Md In 11.'1 C"'''p''Q M IIl:nOO8\ UBur)'; of

th~

lJoa~ ftn~tO, i,~'tu:r r:!~i~:~c~:,~itl,~~~~~J o:h!::~e~o;'~rh~m~~~ b~~I~~d

uDder tho p,I),·i.ions of ACl Ko. 0\I0!I; To pe.form other duties m~y c"~bl,, th o c.lLr.y ou~ Ih .. PU'P04CS (or ,,·bich it ha. betn crea l ed.

auc},

0..

Bo:Lrd

The Board is empowered to issue, by itsJf or thru any of its authorized agents, subpoenas and subpoenas duces tecum, to designate any of its oftictlrs or ngents to administer oaths in the invesigation of usury cases, and to examine the books and ?ccounts of any licensed money-lender or any pers( n, partnership or corporation engaged in the money-lending business. 'The Board is authorized to appoint permanent attorneys, secret service agents and other employees a~ it deems necessary. The Board has at present an Executive Officer, an Assistant Executive Officer, Attorneys, secret service agents and the necessary cledcal force. The Probation Office.-Pal'ole was established in the Philippines in the year 1934 with the enactment of the Indeterminate Sentence Law (Act No. 4103). creating the Board of Indeterminate Sentence. Probation followed in the later part of 1935, when the Probation Office was organized pu.·tuant to Act No. 4221, better known as the Adult Probation Law. Early in the beginning of the year J936, the former Office of the Board of Indeterminate Sentence and the Probation Office were consolidated by the Secretary of Justice, pursuant to Section 12> of the General Appropriation Act for 1936, mto one unit, now known as the Probation Office. Indeter·minate Sentence La.w. -Unde r the Indeterminate Sentence Law, in imposing a prison se<;tence for an offemc punished by the Revised Penal Code, or its amendments, the court sentences the accused to an indeterminate sentence the maximum term of which is that which, in view of the attending cin·umstanr.es, can be properly imposed under the rules of the Code, and to a minimum which is within the range of the penalty next lower to that preseribed by the Code for the offense; and if the offense is punished by any other law, the court sentences the accused to an indeterminate sentence, the maximum term of which docs not exceed th~ maximum fixed by the law and the minimum, not less than the minimum term prescribed by the same. The Indeterminate St!cn~ence Law do.?s not apply to persons convicted of offenses IJUnished with death penalty 01' life imprisonment; to those convicted of trcason, conspiracy or proposal to commit t:-ea1<on; to thosc convicted of misprision of treason l'ebt'llion, sedition or espionage; to those conv icted of piracy; to those who arc habitual delinquents; t o those who shall have escaped from confinement 01' evaded sentence; to those who having been granted

THE COMMERCIAL & INDUSTRIAL MANUAL

conditional pardon by the Chief Executive shall have violated the terms thereof; to those whose maximum term of imprisonment does not exceed one year ; nor to those already sentenced by final judgment at the time of the approval of the law. The Board of lndetermina.te Sentence consists of the Secretary of Justice as chairman, and fou r members composed of one woman, onc sociologist, one psychiatrist and one educator. The duties of ',hE' Board are to iOGk into thE:: physical , mental and morni record of the prisoners I\lho are eligible to parole and to determine t h e pro路 JlI.'T time of release of such prisoners. Whenever a nrisoner has ser ved the minim um penalty imposed ~n him and the Board believes t hat t he prisoner is fittGd by his training for release; that there is a reasonable probability that he will Jive and remain at liberty without v,iolating the law; and that his release will not be fucompatible with the welfare of society, the Board may, in its discretion, and in accordance with existing regulations, authorize the release of the prisoner on parole, upon the terms and conditions prescribed by the Indeterminate Sentence Law and by the Board. V.'h\n t he prisoner violates any of the conditions of his parole, the Board issues an order for his re-arrest ana the prisoner, when

re-arrested, serves the rGmaining unexpired portion of the maximum sentence for which he was originally committed to prison, unless the Board grants him a new parole.

P robatio1t.-Whenever any person eighteen years of age or more at the time of committing a criminal offense or misdemeanor is convicted and sentenced by a Court of First Instance or by the Supreme Court on appeal, for such offense or misdemeanor, the proper Court of First Instance may, after the sentence has become fi n al and before the defendant has begun the service thereof, suspend the execution of the sentence and place the defenda nt on probation for such period a s it may determine not less n or exceeding the minimum and maximum pE:riods prescribed in the Probation Law. No person, however, is placed on probation until an investigation and report by a probation officer is made t o the court of the circumstances of his offense, his criminal record, if any, and his social history and until the provincial fiscal h as been given an opportunity to be heard. The probationer is subject to the supervision and visitation of a probation officer and must comply faithfully with the conditions imposed by the court.

STANDA"'O ASPIIALTIID SIICTION O f FIRST CLASS ROAO BI!TWBIIN LEGASPI AND O ,UI.AOA, AUiAY PIIOVlNCB

PHILTPPINES The court may at any time revise, modify or enlarge the conditions or period of probation. If after the period of probation the probation officer reports and the court finds, t hat the probationer has complied with the conditions of probation, the court ordcl'S the definite termination of his case and his final discharge from supervision. Wbenever within the period of probation, the probationer fails to comply with the conditions imposed upon him, the court issues a warrant for his arrest and commits him with or without bail. Upon his bl'ing arraigned and qJter an opportunity to be heard, t he court mar revoke, continue or modify hiS probation. If revoked, the court orders the execution of the sentence originally imposed. The perion of probath n of any dcfendant convirted of an offE'nse f or which t he law prescribes a penalty not exceeding one year does not extend beyond two years ; and in the case of a defendant convicted of any other crime or offense, the period does

not. exceed twice the maximum time of imprisonment to which he is sentenced. However, the period of probation is never less than the sentence imposed. The Probation law does not apply to persons convicted of offenses punishable by death or life imprisonment; to those convicted of homicide, treason , conspiracy or proposal to commit treason; to those convicted of misprision of treason, sedition or espionage; to those convicted of piracy, brigandage, arson, or robbery in band; to those convicted of robbery with violence on persons when it is found that they displayed a deadly weapon; to those convicted of corruption of minors; to those who arc hab:tual delinquents; to those who have been once on probation; and to those already sentenced by final judgment at the time of the approval of the Probation law. The Probation Law operates only in those provinces in which the respective provincial boards have provided for the salary of a probation officer.

FUNCTIONS OF THE DEPARTM ENT OF AGRIC LTURE AND COMMERCE* HE DEPARTMENT OF AGRTCULTURE AND COMMERCE, as its name implies, takes charge of the activities of the Government r elating to natural resources, agriculture, commerce, and scientific investigations and res2arch. It enforces the laws, rules, and regulations that have been adopted for the safeguarding of the public patrimony, for the agricult ural and commercial development of the countr:v. for the promotion of science especially in its practical aspect in relation to industrialization. It has been my special objective in this Del,artment to bring these bureaus as close to the pe091e as possible through intensive extension work, in order that they may be the beneficiary of their services. TO CARRY OUT THIS GREAT TASK, the Department has under its jurisdiction eight bureaus :lnd three special divisions which constitute the large!:t number of functional activities of the Government. These are the Bureau of Lands, Bureau of Forestry. Bureau of Plant Industry, Bureau of Animal rndu str~', Bureau of Science, Bureau of Commerce, Bureau of Mines, Weather Bureau, Fibel' Inspection ,service, Statistics Division and Publications Division.

NATU RAL RESOURCES

The Bureaus of Lands, Forestry and Mines have under their care, protection and a dministration of the nalural resources of the Philippines a s may be noted from their names. The Philippines has a land :lrea of 114,000 square miles or 29,629,600 hectares,

of which 18,594,255 hectares are denominated public lands. It is the duty of the Bureau of Lands to conduct continuous survey of all the public lands in the Philippines especially those that a rc readily available for settlement, to be disposed of by sale, homestead, lease, or free patent. The impol'lance of this work may be readily seen in the fact that unless public lands are surveyed, subdivided and de-

THE COMMERCIAL

limited, conflicts generally arise because of overlapping claims. One of the major t asks of the Bureau of Lands today is the settlement, preferably by amicable menns, of conflicting claims, many of which have been pending for decision for a long time. It is hoped that with more funds available it wiII be possible in the future to offer to the people of the PhiJippine-s public lands that are already surveyed and subdivided so that occupancy without litigation of any kind may be effected. The Philippines is famed for its forests which are among the richest in the world. The proper protection of this natural wealth from mutilation such a s indiscriminate cutting and burning of forest areas known in the Philippines as "kaingin" are among the major functions of the Bureau of Forestry. The extent of the wealth of our forests may be gleaned from the fact that it has an estimated value of P500,OOO,OOO. Commercial forest lands contain a total area of \3,812,098 hectares and noncommercial forest 3,138,1175 hectares. Besides this major function of the Bureau of Forestry, it is engaged ill silviculture, forest management, forest utilization,- and identification of woods for trade and administration. Rich as the Philippines i!l in forests, care has been taken so as

INDUSTRIAL MANUAL to carry out the work of forestation and afforestation where cutting of timber has been extensively made. The real extent of the mineral resources of the Philippines has not been fully revealed until lately when gold mining became one of the most important industries in the Philippines, through the discovery of gold and other ores in many parts of the I slands. This discover.y has made necessary the establishment last year of the Bureau of Mines under the jurisdiction of the Department of Agriculture and Commerce. It is the function of this Bureau to conduct geological survey of mining regions of the Philippines already in operation. This survey is to be extended to unprospected regions. Classification of all mineral lands is to be undertaken in connection with thi!' geological survey. The Bureau of !'trines, with the Bureau of Public Works, is also engaged in the study of water utilities and power resources of the country. Its other functions are to carryon the work of mining examination and devaluation for private parties, to do the assay work for the Government and private parties, to stu~ the possibility and advisability of erecting and opemtind a smelting plant as required by law, to undertcke a general topography which shall include loca-

MUNI CIP" I- GOVÂŁRh'MBI'>'T B U II-DIh'G-TAnACO. AI-BAY PIlOVI"CI

PHIUPPINES tion or lease surveys for private parties, to investigate adverse claims on mining claims and leases, and to prepare necessary rules and regulations to supplement the new mining nct. AGRICULTUP.AL DEVELOPMF.NT

Agriculture :5 administered by the Government thl'ouCh the Department of Agriculture and Corr.meree separately in its two aspects, plant and animal, the first under the Bureau of Plant Industry and the second under the Bureau of Animal Industry.

The Bureau of Plant Industry takes charge of agricultural propagation . The Philippine soil is famed for its richness which is its greatest asset as a nation. Because of this fact the Islands will always depend on agrkultul'c as its main source of income. The total area of agricultural land in the Philippines is 18,594,255 hectares or 62.750/'" of the total area of the PhiJiPI,ines. Of this only 3,943,320 hectares are under cultivation. This shows that the Philippine soil has barely been scratched. It is the work of the Bureau of Plant Industry to assist in agricultural development, in eXl?anding the area of agriculture, and of improving what is cultivated in agricultural lands already under cultivation. The most important agricultural products of the Philippines nre palay, which is the main food supply of its inhabitants, corn, sugar cane, coconut and tolmcco. The Bureau of Plant Industry conducts researches on rice, root crops, and miscellaneous field crops with a view to improving their varieties and increasing their yield. It is also engaged in )"('_ search on abaca and cotton; in the propagation of ramie, flax, etc.; on the cultivation o~ fruits, nuts and vegetables; in experiments on insecticidal and medicinal plants and spices; in plant utilization; in plant breeding; in campaign for the control of plan;; pe$tg and disease; and In agricultural e:<:tension and educational work by actual demonstrations. The Bureau of Animal Industry tukes charge of the animal phase of Phdippine agriculture. Livestock pI'omotion work and industrializution of animal products arc its main fUllctions. It is engager! ill the work of Epizootic control especinlly rinderpest, foot-and.mouth diseases, surra, hog cholera, and other harmful animal parasites. It conducts

veterinary research and investigation particularly on virus diseases, bacterial diseases, and the control and treatment of aU parasitic diseases. With the emphasis being given today on indu"trialization in the Philippines, the Bureau of Animal Industry conducts experiments on the manufacture, preservation, and utilization of animal products both edible and inedible, such as hams of different styles, bacons, sausages, canned meat, glue, and milk and milk derivatives. This Bureau also conducts stock farms and breeding stations for the purpose of demonstrating to those engaged in stock raising the importance of animal farming 2nd breeding. SCIENTIFIC RESEAR CH

One of the most important bureaus under the Department of Agriculture and Commerce is the Bureau of Science. It has acquired world wide I eputation for its scientific researches. The Bureau of Science conducts investigation and experiment on the pos~ibility of industrializing Philippine products and hy-products. It is actually conducting investigations on clay roofing materials (tiles) as a suhstitute for nipa and on the manufacture of Chinaware irom Philippine raw materials. COMMERCE Commerce is administered under this Department thru the Bureau of Commerce. The enforcement of rules and regulations affecting local trade is entrusted to this Bureau. It assists local merchants thru the gathering and dissemination of commercial and trade information of practical value. To assist Philippine farmers, this Bureau is undert.'1king an extensive campaign for the organization and promotion of cooperative marketing associations for the benefit of agricultural producers, retailers and owners of small stores. It is also conducting a campaign to improve and standardize all native woven fabrics and other products of domestic manufacture. Trading Centers have been estnblished by this Bureau to a ssist merchants, industrialists and local farmers. The 'Weather Bureau, Fiber Inspection Service, the Statistics Division and the Publications Division, perform functions as their names imply.

THE COMMERCIAL & INDUSTRI AL MANUAL

PHILIPPINE NATIONAL ECONOMY CCORDING TO the census of 1918, 40.4 percent of the gainfully employed population, above 10 years of age, were engaged in agricultural pursuits, 13.4 percent in manufacturing a nd in· dustry, 6.6 percent in trade and tral'li"portation, 28.8 percent in domestic and persona l ser vice (pl'csumably this group indu'les housewives), and 10.7 percent in professional service. 'rhe last group, composed primarily of teachers, lawyers, and doctors, constitutes an unusually large proportion of the population as compared with that found in other countries. The proportion of the population employed in each of these various classifications has undoubtedly changed since 1918 and, though no mor~ recent figures are avai lable, it appears likely that the proportion engaged in manufacturing and commerce has increased in importance.

THE EXTRACTIVE INDUSTRIES, embracing agriculture, mining, lumbering, a n d fishing, are the basic factors in Philippine economy. Of the total agricultural a rea under cultivation in 1934 over 9,870,000 acres, or 99 percent, was devoted to the production of seven principal crops, rice, coconuts, corn, abaca, sugarcane, bananas, and tobacco. Fl'om the statisdl;,s given below, it will be noted that rice occupied first place with 49.9 percent of the total area wn Je sugarcane occupied only 7.6 percent. Rice, how tv'el', ,';as far exceeded by sugar in the value of the crop produced. The seven crops accounted for 95 percent of the total valll!'! of agricultural production. Land aroa

u~dor

c.. lli.nlion in Ih. Philippin •• nnd crop .a!"., lor Ih. v.ar .ndino Jun. 3Q. 1934. by pri~cipal crop. Pcr~"~1 nl Pcrctnl 01 l<>tn!

0,0,

Ric •...•• CaeOnula Corn •.. AbnCA .. .. . . Sugnrenne. Bnnllnn5 ..... Tob~eco ..•. Olhe r .

~I~I

2Ul>.880 13n,060 57.2'10

('rop ral". 49 .9 P101.N4,260 151 21.146,650 13.4 11.351.320 9 .3 10,013,300 7.6 H.i2.7M.310 2 .7 13.502,080 1.4 2.864.200 .6 17.2tl'.tl30

,.... 1". 29 . 9 1.7 3 ·2 3. 1 464 3.9 .8 50

9,V23,OOO

100.0 1'350.533.950

JOO.O

ACT" 4,1152.320 1.502.720 1.332AIIO 1123.520 7~. 840

Three crops-rice, corn, and bananas-are conf>umed almost entirely within the Islands. Together with fish they constitute the essentials of the native diet. Sugar, coconuts, abaca, and tobacco find their principal markets abroad, either as raw materia l or in the form of manufactured or semimanufactured products. In 1934 the four major export crops constituted approximately 58 percent of the total value of agricultural products, and in each instance they found their principal market in the United States. The ownershi p of agricultu ral land in t he Philippines is widely diffused and characterized by relatively small holdings. T his is due in part to the

eady tendency of the people to clear arid claim only such land as they could cultivate, and in part to the division of estates through death and inheritance. The people have been opposed to large eslates because of the abuses which they associate with them. Some of the large landholders have kept their tenants perpetually in debt by charging exorbitant interest rates on advances, and by pu rchasing tenants' crops on quasi~eonfiscatory terms. As a result of these conditions, the recently adopted Philippine Constitution contains the foll owing provision which had pI·eviously been a part of the P hilippine Law: ·'No P-;V'lt<'

~nc""rM;"n

ft"8n~i"l;on mny

noquire, leaae

~:Y~~~~-1;'~~Ii~:e~~;;~lt(~~JJ~n~:r~)~.t~:s ~,,~n~~h°'i~dr~idunn~ neq'lire 8ueh lands by purch" ae ;n e.taul of onc f,undred nnd forty-four hectares (350 l1erC!'l). or by lo,~e in e.treNl of one tht>usand (lnd twenty-fOli C heetn.es (2.530 ne rc.. ). Or by homeate,d in e.teeu 01 tWO'lly_lour hernres (59 ner ... ). J,.nds ad"plcd 10 gcuing. n<lt u~eeding two thouund heet/l<C!'I (4.9 42 a~res). m(1)' be le.lIed to nn indh'idulLl, pri\"lLle corporation, or auoeialioD."

The agricultural population is consequently composed pi imarily of peasant proprietors or small shar e tenants. H ired laborers are engaged on only a bou t 10 percent of the cultivated land. While this system has been instrumental in creating a large class of peasant proprietors, it is doubtful that it has promoted the national welfare to the extent commonly supposed. It does n ot permit the economies of large-scale production, nor can scientific methods of agricultu ral production be easily introduced among a large number of peasant proprietors and tenants. Because of this condition, the agricultural products are often inferior in quality and lacking in uniformity. I n addition , the ;yield per acre is frequen tly lower a nd the cost of production h ig her than appear necessary. Ment ion h as already been ma de of the mining industry in the P hilip pines. Gold is the only mine-

PHILI PPINES ral on a large seale at the present time. Some work, however, is being done in the development and ex· ploitation of chromite and iron deposits. The gold mining industry has been expanding since 1930. 1t employed approximatel&, 20,000 men in 1935. I n that year gold became the third ranklng item among Philippine exports. The lumbering industry is well distributed throughout the Islands. In 1935 there were 90 sawmills ope rating in the Phi lippines, and approxi· mately 35,000 people were engaged in lumbering and allied industries. Exports totaled 143,169,000 board feet in 1£135, of which nearly two·thirds were logs nnd one-third lumber; the value of these exports equaled 1)5,022,000. Japan is the principal export market for logs and the United States for lumber, largely cabinet woods. Although the exports are important because of their quality and value, the domestic market consumes about 80 per· cent of total production. Fishing is conducted largely for home consump· tion nnd provides one of t!le important foods in the diet of th(' Filip:nos. A large proportion of the people living along the seashore, rivers, or lakes nrc fishermen who employ p~mitive methods and equipment. Commercial fishing has not been highly

developed. A few Japa]lese and one American firm are engaged in this business. Although imports of fish, principally canned fish, totaled P2,720,000 in 1936, only two fish canneries have been established in the Philippines and both of them pack primarily for the export market. The principal manufacturing industries of the Philippines obtain their raw materials largely from agricultural crops grown in the Islands. Conspi. cuous ellamples are such manufactures as centri· fugal and refined sugar, coconut oil, copra cake and meal, desiccated coconut, rope, cigars, and fiber hats. Most of these products find their principal market in the United States where they are admitted free of duty. The United States purchased 80 percent of all Philippine exports in 1935 and an even larger proportion of the exports of manufactured products. The Philippine mal·ket con· sumes only a very small part of the total produc· tion of these latter. The embr oidery industry is also an export industry. The doth and thread are obtained in the United States; the embroidering is done in the islands and the finished product is re· turned to the United States. Another export in· dustry of some importance is the manufacture of pearl buttons. This industry obtains its raw ma-

TAItLAC CaUItT BUILDlNO-TAIlU,C

THE COMMERCIAL & INDUSTRIAL MANUAL

terial from shells gathered in waters surrounding the Islands. The finished product is marketed primarily in the United States. Some Philippine manufactures, however, produce almost entirely for insular consumption, supplying such goods as milled rice, leather and rubber shoes, cigarette:!, liquors. soap, margarine, cutlery. furniture, shirts, and native materials, particularly dress goods. .Many of these industries are not large. and some are conducted principally in the home. In the aggregate, howevcl', they provide employment for substantial amounts of capital and labor.

Laborers in the manufacturing industrie:;; consist almost entirely of Filipinos. The technical and executive positions, however, are filled in part by other nationals, principally Americans, Spaniards, and Englishmen. Filipinos furnish a substantial portion of the capital employed in manufacturing; Americans and Spaniards pI'obably supply the largest amounts secured from investors of other nationalities. In commerce. participa \on by Filipinos is not as large as it is in either agriculture or manufactures. As a people, the Filipinos nave not been attracted by trade and in that field they have been not particularly successful in competition with some of the other races in the Islands\ The Chinese, wh" have become the principal merchants, are located in nearly every city, town, and village. They not only carryon a regular cash merchandise business but sell on credit, recovering their advances by acquiring their customers' harvested crops. In many cases the interest rate is exceedingly high, and the crop is purchased at prices well below the market. In l'f~cent years the Japanese have also entered retail trade with their bazars in the principal town and cities. Although they do not generally extend as do the Chinese, they have been able to expand their sales because of the low prices at which their merchandise is sold. The Japanese have been especially successful in the retail cotton and I'ayon textile tmde. Approximately 80 percent of the wholesale trade in Japanese rayon, however, is handled by Indian dealers in the Philippines. The general importing and exporting bu siness in the Islands is carried on primarily by Americans, Spaniards, Englishmen, Chinese, and Japanese. In transportation, Engli sh and American investors until r ecently were predominant. The Manila Railroad Company, constl'ucted with English capital, operates in central and southern Luzon.

it is now owned and controlled by the Philippine Government, but a small bond issue is still held abroad. The Philippine Railway Company is controlled by an American corporation and operates two small li.r.es, one or. the island of Panay and the other on the island of Cebu. Motor trucks and busses are now playing an important part in Philippine transportation. The operating companies are financed largely by American capital. Eleven banks served the Philippines in 1935; two of these, the Philippine National Bank and the Postal Savings Bank, are government owned and controlled, The others represent private American, English, Japanese, and Pl~ilippine capital. A large number of British and American insurance companies have agencies in the Islands, although the Ji~t of local companies is steadily increasing. Probat.l).路 the share of Philippine participation in finance i:i greater than in either trade or transportation.

Pkilippille overseas tj路ade.-The total foreign trade of the Philippines (inclu sive of trade with the United States) rose from P68,OOO,000 in 1899, the fi r st year of American occupation, to a peak of P624,OOO,000 in 1929. Because of the decline in comm9dity prices which began in 1930 and the general depressed condition of world commerce which prevailed at that time, the foreign trade of the Philippines declined to P346,000,000 in 1933. It recovered slightly in 1934, reaching 1'388,000,000, but dropped to P360,000,000 in 19:15, primarily because of the limitation on shipments of sugar to the United States. Since 1914, with the exception of 1919 and 1921, the annual value of Philippine exports has exceeded the value of imports. The foreign credits which have arisen from the excess of exports have been employed principally to service the Philippine bonds held by foreign investors, to pay the dividends on foreign capital invested in the Philippines, and to pay for the services rendered by foreign steamship and insurance companies. The eJ(cess of Philippine exports over imports was M6,800,OOO in 1933, P53,600,OOO in 1934, and P17,400,OOO in 1935. Philippine export.s consist principally of raw materials and semi manufactured products, and the impol'ts consist principally of manufactured and semi manufactured goods. The Islands sell raw sugar, copra, abaca, tobacco, anci timber, and such processed or manufactured goods as coconut oil, copra cake and meal, cigars, rope, embroideries,

PHILIPPINES

straw hats, cabinet woods, pearl buttons, and semi~ on with the United States increased. In 1932 about refined gold bullion. In exchange for these prod65 percent of all Philippine imports came from the ucts, they receive a variety of manufactured articles, U nited States, while 87 percent of all exports were including iron and steel p roducts, cotton and rayon shipped to the American market; in 1935 the cortextiles, mineral oi l, machinery and parts, autorno- responding figures were 64 percent and 80 percent. biles and trucks including parts and tires, tobacco The principal commodities which have been products, meat and dairy products, wheat flour, shipped from the Philippines to the United States paper and paper products, chemica ls, fertilizer, fish in recent yea rs are, in the order of their respective and fish products, and leather and its products. vaJues, sugar, coconut products, gold, abaca and The Islands also import some vegetables, fruits, cordage, tobacco, and embroideries. The principal and nuts. Some of the articles imported could Philippine imports from the United States have undoubtedly be produced in the Philippines, but up been iron and steel products, cotton textiles, mineral to the prescnt time it has not been found profitable oils, automobiles and parts, meat and dairy prodto do so. ucts, paper and paper products, tobacco, wheat Since the American occupation, Philippine trade flour, chemicals, fertilizer, and electrical machinery with the United States has increased rapidly. At and appliances. The Philippines h ave generally the beginning of t he century it amounted to ap- sold mOI'e goods to the United States than they have proximately P10,OOO,QOO and accounted for 9 per- purchased from the United States. Their credit cent of Philippine imports and 13 percent of Phil- trade balance with the United States amounted to ippine exports. By 1929 the total trade of the Phil- P95,600,OOO in 1933, P85,OOO,OOO in 1934, and P41,ippines with the United States amounted to P434,- 540,000 in 1935. 000,000. At that time the United States accounted The Philippines have regularly had a debit for 63 percent of P hilippine ,mports and 76 percent trade balance with the rest of the world as a whole, of Philippine exports. Although the value of Phil- exclusive of the United States. This situation has ippine trade declined during t~e subsequen t years likewise prevailed in respect to their trade with of de~reSS i on, the ~rop::,n l th e total carrie~ most of the individual countries in the Orient, ex-

CO\U\YO\N MUNICIPAL BUiL01NO-CO\UA1'AN, iUDBLA PIlOV1-SCB

THE COMMERCIAL

cept Hongkong and Siam. The excess of Philippine imports from alI countries in the Orient. inclusive of Au stralia, equaled 1"22,800,000 in 1934 and P25.200,000 in 1935. Philippine imports from these countries equaled 24.3 percent of total imports in 1935; exports to them were 8.7 percent of total exports in that year. In Philippine trade with the Far East, Japan is the most important country-in fact, it occupies a position second only to the United States in the total foreign trade of the Islands. Imports in 1934, and 14.2 percent in 1935. Exports to Japan constituted 2.8 percent of total exports in 1933, 3.9 percent in 1934, and 5.7 percent in 1935. The Philippines purchase from Japan principally cotton and rayon textiles, certain iron and steel products, paper products, chemicals, and fish and fish products, and sell to Japan chiefly abaca, timber, and tobacco. From the Netherlands Indies the Philippines receive a part of their m'neral oil and tobacco, and from Australia meat and wheat flour. China supplies cotton textiles, sil ks, linen, rugs, vegetables, and meat and dairy produc'6. French Indo-China ships rice. Philippine exports to these countries consist principally of tobacco, timber and lumber, abaca, and rope. Europe constitutes the third important area for Philippine trade, accounting generally for about 10 percent of the total trade of the Islands. DUring the years 1933·35 the Philippine imports from Europe were nearl y as large as their exports to EUrope. Germany, Switzerland, and Belgium usually sell more to the Philippines than they buy, whereas the reverse condition prevails with respeet to t he trade of the Philippines with Spain, Great Britain, and France. Purchases by the Philippines from EU1'opean countries are composed of a wide variety of manufactured products. Great Britain suppli es certain types of textiles; Germany and Bel gium provide iron and steel products; Sweden, electrical machinery; Switzerland, dairy products; and Germany and France, chemicals and drugs. 'rhese commodities represent only a few of the more important items imported from European countries by the I slands. Philippine exports to EUrope consist chiefly of tobacco, copra, abaca, lumber, and straw hats. The relative position of the important areas participating in the foreign trade of the Philippines for the year 1935 is given below:

INDUSTRIAL MANUAL Philippine Philippin. import.! aporia

C""nlru

TOT .. L ••

..,

64.0 24.3 10.1

United S tilt "" .. Orientlll eauntril!l .. European couDt!il!l .• Oth er arC'"

80.1

..,

1., -----100 ,0 100.0

Trad. bala1lc<

+1"41,540,000 -25.250.000 +1.334.000 -180.000

,.11,444.000

indica.tcs all e~CI!II of ul,orta. II credit baloucc: un CKCl)OlS of imports, II dcbi~ blll,,"cc. 1

ORDERLY

EXPLOITATION

PHILIPPINE

indiCMCS

NATURAL

RESOURCES

Now that the Commonwealth has been sllccess fully launched and appears to be going full speed ahead under fair skies, it would not be amiss for us to turn our attention to some of the pressing problems that confront us. Most of these problems are economic and, like the rest of the world, we mu st do our share in the restoration of economic stability to which all nations are bending their efforts. However, because of our peculiar situation, we in the Philippines have to solve not only problems of recovery but also of readj Ustment to the new order created by the establishment of the Commonwealth. The problems of recovery are not so serious in the Philippines as in other countries because the slough of the depression here has not gone deep enough to cause sufferings to the people. But the problems of readjustment are really our principal concer n and to them we should direct our energy and combined efforts. Different nations are facing their economic problems in a more or less systematic manner by adopting some sort of economic plan to bring order out of a disorganized economic system. The most comprehensive of all economic plans today is that of Russia, where the communists have, with one stroke of the pen, abolished nearly all the vestiges of capitalism and erected a communist order in which the state has assumed complete control of the economic system. Italy under Facism has also a plan pl'incipally characterized by the Corporate State in which politics is inextricably linked with economics. Economic planning in Great Britain has been confined chiefly to agriculture. America under the New Deal has various economic plans like the NRA, the AAA, both of which, unfortunately, have heen declared unconstitutional by the Supreme Court. The craze of planning is spreading throughout the world under all forms of governments and under all kinds of economic organization. It is about time that we should consider the general

PHILIPPINES outlines of Ull economic plan fo r especially in vicw of the e location Economic Council. Our (!conomic development has proceeded heretofore without any definite objectives; we have exploited out' resources with the prime motive of providing for our present needs and we have been conte nted with the res ults. The new political SULtU! awukens in us in u different atLitude toward our I'ich natural resources. Their ordedy expioita-r tion must be our chief concern. Ours is the l'Cs ponsibilit.y to develop the patl'imony of the race not only to meet our present needs but also to conserve it fOI" the benefit of generations yet unbol'n. We call1lot do thi s intelligently and s uccessfully without any plan. The question now easily suggests itself. What role will the Government play in planning? I shat! only discuss the A"eneral outlines of the !';ch!'me which r have been able to form after car~ful :;tudy of the I\lans now under eXperiment in other countries. Planning in agdculh\!'e, t.he laq:!:est and most impol'tant industry of the\ Philippine'S, must take into cons ideration not only th'j! supplying of domestic needs but also the world mal"\et fOl' the variO\lS e:>:port crops. The Philippines ' is self-sufficient in

products and in some, principally hemp, there is a large s urplus The pl'incipal mar ket of these is the with very little prospect of finding h markets. The restl'ictions and by the United States on these principal expol 'o~ have caused drastic changes in the crops affec~~e overplus of these products has demoralize i~and consequently the smat! ]Irofits derived , I ' urage further exIlans ion. Agriculture is sl w Jj/?'hadapt itself to changes in demand for its prO~~'t is onl y hy more drastic action t hl'ough th i tion of the government in a way si milar to the ~7ยงral Adjustment Act that su pply could be ma(l\4..tj; fOl'm with demand. While we curtail the llro of ('I'OllS that al'e now suftpring from the mala(i~~Jf over production, we should encourage the production of those crops that are well suited to our soil climate but arc now br ought from the outside in large quantities, One of the most important aspects of PhiliPl)ine agriculture that hns been a conti nuous source of difficulty is that of agricultural cr edit. The slllall f<,lrmers have always been the helpless victims of unsc rupulous money lenders who bog them down

JLOCO~ SUR PROVINCI ,'!.

;Jlttt.

CAI'I'roL-VtOAN

AYAL A LIBRAR Y ) f 'll

))

THE COMMERCIAL

into debt, thus increasing the ranks of malcontents, that blame the government for their sad plight. The consolidation of all government agricultural credit institutions under one body to take the responsibility of distributing agricultural credit in accordance with a plan of agricultural development would partly remedy the situation while at the same time it would accomplish the desired object of limiting production where it is desired by restricting credit in that direction and encouraging the production of crops that need to be encouraged by being liberal with credit to producers of crops that are imported at present. As the next definite step in this direction, the establishment of an agricultural bank to control exclusively our agricultural credit becomes imperative. One of the ills that have hampered our agricultural development is the lack of orderly marketing of our principal ~:oducts. The middlemen, like the usurers, receive the greater portion of the farmer's peso, and in most cases middleman and the usurer are one and the same person. In England, the State reorganized agriculture through the Agricultural Marketing :acts in accordance with which the State has attempted to combine marketing arrangements and institueed compulsory regulation of marketing conditions. Marketing Boards for particular products have been established to aid farmers in securing better terms from the distributors and to bring ahout a better grading and classification of agricultural products as well as improved prices for standard grades of products. The coopel·ative marketing associations now in existence in the Philippines are too weak to achieve their ~u rpose in spite of the supervision of the Bureau of CommcrC'.e. The reorganization of these marketing associations on the basis of products on a national rather than local scale would bring about more orderly marketing of our principal agricultural products like rice, tobacco, copra, hemp and others, which could be standardized. The future of Philippine agriculture depends to a large extent upon the settlement and tillage of large tracts of virgin lands that now lie idle because of the lack of farmel·s who would live the life of a pioneer in opening up new territory. Disease, lack of capital and insecurity in the acquisition of titles to the rightful owners of cleared land have discouraged many enterprising homeseekers from venturing into OU1· unsettled provinces. Something must b~ <lone to remedy this s ituation.

INDUSTRIAL MANUAL While the country is principally agricultural, the Philippines cannot always supply raw materials or semi-:inished products for the hungry factories of other nations. Our needs for manufactured products keep on increasing and we cannot continue to depend upon other nations without seriously affecting most of these goods. The goal of planning in industries should not be to produce everything that we now import but to manufacture only those articles to which the resources of the country al'e well suited and in which we enjoy a comparative advantage. Before we embark on the industrialization of the country on an extensive scale, a thorough survey and appraisal of our natural and human r esources would be a necessary and indispensable prerequisite to determine what industries have really the best prospects of surviving the keen compet ition in the industrial world. LABOR AND CAPITAL One of the most serious tasks that the Government will tackle is the redistribution of population. It is a well-known fact that Bukidnon, Palawan, Nueva Vizcaya, Davao and Cotabato al·e pI·actically unoccfpied, while Cebu, Ilocos Sur, La Union and Pangasinan are very densely populated. Variou!! attempts have been made to redistribute popula-ion by settling sparsely populated regions through the Homestead Law, the Colonization Law, etc., but they have met with little success, largely because the colonists were not the right sort for real colonization. Every now and then we see conflicts between labor and capital, but so far all problems attendant to labor have been successfully met. With the or· ganization of the Department of Labor and with the increasing number of public defenders, the problems of labor will be better solved. Strikes are expensive manifestations of discontent and cap~ ita lists should beware of them. The Philippine Legislature was not slow to attend to the welfare of laborers. It tried to decrease unemployment as much as possible; it enacted various laws to protect and regulate labor. The Employer's Liabilit,Y Law. the Workmen's Compensation Law, the law regulat~ ing child and woman labor, the Eight-hour Labor Law, and the Tenancy Caw are all manifestations of the interest of the government in giving a new deal to Jabor. With the development of new in· dustries, unemployment will be minimized if not entirely eradicated. This, coupled with the fair treatment of the laborers by their employers, follow-

PHILIPPINES ing the policy of social justice so nobly enunciated by President Quezon, should place labor and capital on a fdendly basis. The misery bequeathed by the depression has spared no country in the world and the laboring class is the most hard hit among the people. A nation cannot long endure if a substantial portion of the population has to live in want and uncer· tainty. We need not recall what has been done by other countries in the past to promote the welfare of the laboring class aftel' centuries of abuse and neglect, and what many of the progressive nations Ilre doing today. Protective labor and social legis. lation claims t he attention of most legislative bodies today, and the problem of social security is the preocupation of statesmen the world over as the best safeguard agai nst social disorder and anarchy.

Fortunately for the Philippines, the condition of our laboring class is not as deplorable and help· less as in other countries especially those that are highly industrialized. Our laborers could rel y to a large extent upon the vast unopened areas to escape involuntary idleness in crowded cities and towns. But it is not always easy to leave home and friend·<; to seek .. fortune in unknown regions without any he;p, and many of our unemployed must continue to cast their lot in the cities. The public treasury is not yet in a position to support the elaborate ali>:! expensive schemes of social amelioration under· taken in other countries. Before the unemployed could be absorbed again by industr y, they have to depend for the present upon the support and cooperation of the more fo r tunate segmen t of the population for temporary relief.

THE NATIONAL INFORMATION BOARD AV I NG STARTED to function only in Mal ch, 193'1, the National Trfol'mation Board is the

youngest agency of t.he Philippine Commonwealth. The National Assembly, in creating it, seeks to coordina ~ and direct all the information, publicity and propaganda work of the Government. Thu!J the Board is eminently a product of organi1.ed democracy in the Phil· ippines, being the office charged with the duty of enlighteninr.- the great mass of the

people along channels of good living and progress. First-hand facts about actual concitions on the farm, the social problems of the FililJino people, their daily tasks and their wages and CArnings are gathel'ed, the Board picking up, as it were, the fragments of thO"! lives of dispersed communities and weaving them into a whole ~attern (01" the better study by the Government, These find· iugs lire u sed in laying out the ground work fo r a systematic social improvement work by the Government in the provinces. THE NATIONAL I NFORMATION BOARD conducts extensive speaking tours in the provinces, especially in remote towns and ban-ios. During these meetings, the speakel's of the Board do not combat mdical propaganda but simply confine themselves to explaining the aims and policies of the GOvernment and what the Administration has done and is doing for the common welfare. ' The Board pr epares pamphlets and leaflets, mi· meogrnphed or printed, for distribution at community assemblies and other popular meetings conducted under its auspices. These leaflets and pamphlets contain articles dealing with the rights and obliga· tions of the citizen under existing laws affecting their vital interest, the articles written in the short

and simple language of the common people and in a style technically suited to their temper and psychology. To make its campaign of information more effective, the Board publishes now and then the Bali· tang Pangbaya1!, a news·sheet distributed far and wide in the provinces. This Bulita, without being an apologist for the human frailties of the Government, tries .to bring out facts and figures which ser ve to clarify doubts about the intentions of the Government and thereby restore popular confidence in its actions. A pamphlet f01' the enlightenment of the common man is the Aklat ng Mamamayan (Citizen's Handbook), a sixty.four-page manual in Tugslog calculated to impress upon the mind of the

THE COMMERCIAL

Filipino citiz(!1l not only his rights under exist.ing order, but. also his obligations as an integral part of that order. The Board also supervises, editorially, the pub. lication of some government books. One such book published under the editorial supervision of the Board is the White Book 0/ the Commonwealth, an authentic record of the celebration of the first anniversary of the Commonwealth Government on November 15, 1936. Field agents arc employed to keep their ear.; dose to the ground to feel the pulse of the peop:e in the provinces. There llrc also the researcher!> whose duty is to look into every phase of human knowledge either to provide the Board with basic matedal for its infol'mativc w~rk, or to Ilnswer inquiries received from the public in increasing number every day. The Board also s.,:lpel'vises the dissemination of daily news to the puBlic over the radio, One-half hour in the morninlt' and one-half hour in the evening are devoted to this p~'pose, In addition to the regular daily news broacicasts, there are conducted every Tuesday evening, from 7:00 to 7:30, and every Saturday evening, from 7:00 to 7:45, what is popularly known as t.he "People's Hour." This is the

INDUSTR IAL MANUAL occasion for a resume of the news of the week under the title, "The Commonwealth 1\1al'ches On." Letters fl'om the people !u'e also read and answered, " In, timate Chats with the People" is also featured with a high government official usually engaging the radio audience in a stmight-fl'om-the-shoulder talk concerning a eel'tain phase of government policy 'Ii tally affecting the pUblic. The filming of events of national interest, like the arrival of the President from the United States including the outstanding ceremonies of th e 1'e_ c~ption and the speeches delivered, is undertaken by the Board. The Board will soon purchase a motion pict.ure pl'ojector to exhibit pictures of intel'est thl'oup,'hollt the I slands as the beginning of a t.heatel'-on-the-wheel venture on a large seale, From time to time pictUres of Philippine life will be filmed for exhibition throughout the country, In these pictul'es an attempt will be made to depict the simple life of the Filipino average lllan in an environment improved by his Govel'nment. The family tradition will be glorified, respect for consti tuted authority and obedience to law and order emphasized, Incidentally, the pictures will br ing out the natural beauties of the Philippine

BONTOC P"O\'LNCiAL GO"BR)o.'MBNl"-r.fou)o.'T.UN PROVLNCE

PHILIPPINES landscape so that their exhibition abroad nlight bring profit to the countl'y. Closely in !in(' with the screening of t hese moving pictures will be the staging of dramas

written by the staff members of the Board, with national consciousness and love of country as the motif. Thf'SC dramas will be staged, with the cooperation of local us well as public school officials, in the towns and barl'ios of the Philippines during

annual fiestas, with the view to eventually replacing the "moro-moro" plays of Spanish times. There will be a consistent effort, in short, to draw the line as between idleness and leisure, and place the emphasis on leisure devoted to profitable ends. I t is believed that this new orientation in the ways of the people will do away with many of the evi ls rooted in their life-evils that a r e beyond the power of: legislation a lone to eradicate.

INDEPENDENCE IN 1938 OR 1939 UNDER CONSIDERATION Committee Otganized

Handle Details

Prospects Cause Slight Tension

;\L\IED IATE INDEPENDENCE, fOI' the whole duration of: the independence campaign, the ideal of

the Filipino lendbts and the Filipino people, but abandoned in the horse-trading which preceded the passage 'of the Tydings-McDuffie Law foi' independence after a ten-year transition period, may com(' a1wr all nnd as early as next year (1938) or W39, according to the I'eported IIccord arrived \ t in a conferencE' between Prcsident Quezon and the interdepartmentnl committee headed by A sistant Secretary of State F~'ancis p, Sayre,

'The working out of thq details of the ne" agreement which will be an overhauling of the Independence Act passed in 1934 will be entrusteo to a cqrnmittee of experts. THE POSSIBILITY OF A~ EARLY INDEPENDENCE has been hinted since President Quezon started his talks with Washington authorities. The President's talks in Washington have been in the nature of complaint that in s pi te of the provisions of the Tydi ngs-McDuffie Act regulating the entry of PhiliPlline products, especially sugar and oil, to the United Stntes dm:ing the trnnsition period of ten yeurs, Congr<.lss has not respected the Act, hns tinkered with it, slapped a processing tax on Philippine sugal' and nn excise tax on Philippine coconut oil. Huving in mind President Roosevelt's assurance at the time Pl'('si<ient Quezon was negotiating the Tydings-McDuffie Lllw that inequalities in the Act will be attended to, President Quezon mnde his present t1'ip to Washington to negotiate. WAS II IN(;TON CAN'T HELP

The Roosevelt Administl路ation. howevel', has its: hands full at present, is not in a position, ho\\,eve1' GrapMe-Mor.,A 1M/ h. /fI!J7.

much it wishes to help, to protect Philippine pro, ducts against hostility in and out of Congress President Ronsevp.lt's administration is committed to the protection of American products and inasmuch as P hilippine products are competing with some American products, ther e is no alternative and the Roosevelt administmtion has to protect U. S. intp.r路 ests. WAY OUT

But in view of the obvious injustice that is being perpetrated against PhiliPlline produce (sugal and coconut), justice can only be served by terminating present U. S.-Philippine relations as defined by the Independence Act lind giving the Islands full independence far in advnnce of the date previously set. The Philip l}ine stand hns been as enunciated no doubt by President Quezon in Washington, thnt since under the Ind epcnd~ncc Law the economic provisions are not being followed to the great in路 jury of Philippine products and since under the l'ame Law the Philippines hns her hands tied with respect to protecting her economic interests (the foreign 1'elntions of the Commonwealth being, under

THE COMMERCIAL

the Tydings.McDuffie Law, still under the juris. diction of the U . S. during the transition period), the obvious thing is, if justice must be done, to give the Philippines a free hand, which means independence. RECIPROCAL AGREEMENTS

In the accord reached, it is provided that the preferential trade relatio!'l.S between the United States and the Philippines will be terminated at the earliest convenient date "consistent with affordin g the Philippines a r easonable opportunity to adjust her national economy." After this trade relations between the two countries will be on the basis of reciprocal agreements on a non-preferential basis. PLANS AFFECTED

Should this rCRorted :;,ccord on early independence become a final agreement between t he United States and tho Philippines, the Philippine plans for independence will have 1;,0 be radically accelerated. Among this and probab)~' t he most important is the national defense plan scheduled at present to be completed in ten years. \ Equally important are the various nation:::.listic economic plans which have for their immedia~e object thE\development of other

INDUSTRIAL MANUAL industries which may reenforce if not supplant the present money-maki ng industries of the country. When the news that independence may come next year or in 1939 was received nervousness immediately descended upon the sugar and mine markets although the tor.sion did not turn into a panic. Judge Haussermann suggested calmness. "1 have no hesitation," said the mining magnate, "in saying that it is the duty of aU of us to keep our feet on the ground and rally around the wishes of the admimstration here and in Washington and to everything within our power tQ encourage the people to hold fast to their faith in the general welfare of the economic situation in the islands." Press dispatches from Washington which state that a proposal for a shorter transition period will meet with no great obstaclp.s in the capital are most elating to former Judge Juan Sumulong, outstanding leader of the opposition in t.he Philippines. Judge Sumulong interprets the reports as meaning that Washington circles are beginning to realize that the only logical step is to grant the Philippines complete independence first and later consider the less important question of trade relations and national defen se.

â&#x20AC;˘..- ".

MUNI CIPAL GOVBRNM...EST BUILDING-

T"SAUAS , S"TANG'"

PHILIPPINES

THE JOIN T PREPARATORY COMMITTEE' N APRIL 1-1. 1937, announcement was made hy the State Department, through Hon. Francis B. Sayre, Chairman of the Interdepartme Ital Committee on Philippinp Affairs, that President Roosevelt had approved "the setting up of a J oint Preparatory Committee of American and Philippine experts to study t.ade relations between the United States and the Philippines."

The personnel of the Committee, approved h.Y President Roosevelt for the United States, nnd President Quezon, for the Commonwealth of t,)e P hilippines, follows: JOHN A. A~ I ERIC"'N

McMURRAY, United States Ambn8S",do)' to Tm'key, Chairma,n. GROUP

PHILIPPINE GROU P

E. JACOBS, Vice Chai1"l/Ia.1t of the Committee, JOSE YULO, Vice Chair'man of the Com7l~ittee and and Chairman of the Amc)-ica1l Group. Mr. J acobs Chuil'lna,~ of the Philippine Group. hit'. Yulo is is Chief of the Office of Philippine Affairs, De- Secretary of Justice of the Philippine Commonpartment of State. wealth. LouI s DOMERATZKY, O/:ief, Division of Regiotlal InCONRAD BENITEZ, Dean, College of Business. Univer· JOSEP H

formation, Burealt 01 F oreign and Domestic Commen:e, Department of Comn~erce. LYNN R. EOMINSTER, Chie-f Economic Analyst, Div ision of Trade Agreements, Department of State. COLONEL DONALD C. McDor{ALD, Assistant to the Chief, Bureau of Insular Aflalrs, War Department. CARL ROBB I NS, Assistant Chief, Sugar Section, Agl"icultural Adjllst-lnent Admin~tration, Department of Agrictdtur•. FRANK A. WA .lI NC, SeniOI' ECO)!OllList, United States Tariff Commission. On July 12, 1937, it was announced t hat Honorable J ohn Van A. MacMurray would act as Cbairma n of the Joint CommittC(l. Studcnts of history will fi nd no parallel or preccdent in the annnis of human events for eith er the past or prC!ient relationship betw~en the P hilippine people and t he Am~ricall Government. As we approach a termination of this reJationship, we shall either carryon under the established policy of 39 yenrs, or abandon it and subject ours. . lves to the condemnation of intell igent thought thr(lughout the world. Fortunately, an abandonment of the traditional pclicy is not no;x:essary. No selfish consideration can justify a change. Clarification is advisable. removal of uncertninty is necessary, and an agreeA Rr;'f <1,1<11/1";' 0/ Ih. lI io/"" l.al. Polili.al. Eoo"o"',o a"d S .... ial Badla.oun,l .• ub",iU.d bll f/d rru n . f/",u •. lV .uhinglo". D.C. U. S., R6p . .... nlali.f. I'hm"pi"e Sugar A"<>eiGlio".

sity of the Philipllines. Membel' of National Economic Council. QUINTIlj< PARED"S, Resident COllLtl~issiolter in the United States fOI" the Commonwealth of the Phil· ippines. .JOSE E. RO:'oIERO, Flool" Leader, Majority PaTty in the Philippine National Assembly. i\{A?\,UEL ROXAS, F!oo)' Leader, M inority Party in the Philil1pine National A ssembly. JOAQU IN M. ELIZALOE,

ment on a definite fixed program in accord with our past policy is essential. Centainty for a f ixed period is .!lS important from the international viewpoint as from considerations of reciprocal trade. While the future of American-Philippine relationship cannot be determined solely upon the basis of sugar, copra, abaca or any other commodity, these are the major present blood streams that keep alive a valuable tl'ade betwecn the two countries. The control and direction of this relationship has been with the American Congress, which, with the approval of our President, has always followed the initial policy of guardian and ward, a trusteeship of as high and moral an obligation as that of parent and child, but of even greater responsibility because created by a great netion in its treatment of a dependent people whose desti ny it had .!lssumed by force of arms. I n dealing with the future, in makin1? plans for the immediate years ahead I)f us, whether in

THE COMMERCIAL & INDUSTRIAL MANUAL

cunying out the 1946 plan agreed to, or in shortenjng that period, or in specific p reparation of conventions at the conclusion of any determined period, ther e must be a sustained consistenc.y with past policy. When your distingui shed Committee makes its report to P resident Roosevelt to he transmitted for acceptance 01' rejection to the American Congress. and to Pres ident Quezon for acceptance or rejection by the Philippine Assembly, the necessity of keeping in mind a complete understanding of the past, \vith its fine inspirational history, is obvious, that it may not be changed in any way from that clear period of enlightened advancement in political fundamentals, with its Christian philosophy in a part of the world where it is not so well knowll. If there be some deviation here from the immediate subject of g~gal" with which this brief is primarily cOllcerned, It is because no s ingle item of commerce can be segregated from the rest, and the question of commerce annot be understood without some knowledge of 'ts political origin and growth, FOl'tunately, the rest of he woz-ld will consider our future l'elationship to th~ Philippines with an understanding indulgence. Th y would pursue the

same course under similal' circumstances. Ali fo1'eign Ilation~ will expect a t rans!tion period for readjustment, unless a covetous eye, or a grasping hand interferes with the broad principle of the status of guardian and ward. The American people can hardly be expected to gay : "You are of age," "be Oil your wny," "we are through with you." The world knows we will never forget the Philippines and that the Philippines will never forget us. No one expects a permanent dividing curtain to fall, shutting out the past and obscuring the glorious pages of American-P hilippine history . Because of a war with Spain in 1898, the P hilippines came under the sovereignty of the United States. For 39 years since American Occupation, on August 13, 1898, the course of the Ph ilippine people has been charted by thl! United States. \Vhatever mistakes have been made in the e nactment 01' enforcement of laws passed by the American Congress, an impartial observer will record America's ;lrhievement in the Philippines as unique in history for unselfish interest in a dependent people. The record of the Filipinos is one of coo}lerution and appl'eciation,

PHILIPPINES HISTORIC BACKGROUND

Under the Treaty of Paris, which tel'minated the Spanish-American War, Spain ceded to the United States the entire Philippine archipelago. Article I V of the TI'eaLl'Y provided that the United St.1teS would, for ten years, admit Spanish ships and merchandise to the ports of the Philippines on the same terms as ships and merchandise of the United States, This became latel' an important factol' in detel"lllining the commercial relations between the United States and the Philippines, The Treaty also provided in AI'tiele X, that the civil l'ights and political status of inhabitants of the Philippines would be determined by Congress. The acquisition of the Philippines l'aised the Constitutional qUestion of whether this possession, inhabited by people entirel~' different in race, culture, customs and civilization had ceased to be a "foreign country". This was decided in 1901 by the Un ited States Supreme Court in the Insular Tariff Cases, under which decision the Philippines became a territor,\' "appurtenant" to the United. States, but not a part of the United States, within ~he revenue clauses of the Constitution, E,\RLY CIVIL GOVERNMENT Following the decision of ithe Insular Tariff Ca!;Cli, Congress eslablished a civi l government in the Philippines by the Organic Act of July 1. 1902, In that act, the Filipinos wel'e given practically the same guarantee!i of individual liberty as are incorporated in the Constitution of the United States, The Government was established on the pattern of the American Govel'llment, consisting of three sel)arate depal-&ments, the Executive, Legi slative. and Judicial.

The next important Jegislalive enactment affecting civil government was t he Jones Act of 1916, in which Congress gave the Philippine people an enlarged autonomy and II greate" participation in the conduct of tbeil' domestic affairs. For the thil'ty-six years priol' to the enactment of the Independence Act, the Philippine status was unccl·tuin, At one time it was considered a part of the United States within the Amcrican unit· at another it was refe\Ted to a~ a foreign country ~ut ~ide the limits of the United Statcs, The United States exercised complete and absol ute control over the Islands. The GovernOl' Gen-

ernl of the Philippines was the agent of the War Department in the administration of the Philippine Government, American sovereignty was universally recog' nized, and the Philippines, in the international sense, was a pal't of the United States, Dcspite the!\e uncel'tainties, the Philippines steadily continued progress in government, eornmel'ce, and public welfare. COi\l~IERCIAL RELATIONS

Commerce between the Un ited States and the Philippines, prior to the indelJendenee Act of 1934 was controlled by the United Stutes tariff acts, The tal'iff policy of the United States under· went fOUl' phases of development. The first phase covered the pcriod f'·om the date of American OcCUllation in August, 1898 to i\Iarch 8, 1902. This was characterized by no tariff I'eductions 01' preferences, a s though the relationship was that of foreign countries. The second phase of the trade relationship occurred during the Ileriod hom March 8, 1902 to August 5,1909, during which tariff concessions were granted on products of the Philippines entering the United Stlltes. The American policy during this rel'iod was embodied in the Act of Congress of .March 8, 1902, providing for a reduction of 25 0/" in the tariff on Philippine products, But no corre~ponding reduction in the Philippine tariff was granted on American goods entering the Philippines, due to the provision of the Treaty of Paris, giving the same treatment to Spanish merchandise and ships entering the Philippines accorded to goods and vessels of the United States, The third phase of American tariff policy towards the Philippines was chal'uclCI'ized by the establishmcmt of free trade with ce.rtain limitations. FREE TRADE This was brought about b~' the enactment of the T:ll'iff Act of August 5, 1909, when the ten-year period prov ided in the Trcaty of Pal'is expircd. Reciprocal trade I)ermitted Philippine products, (with the exception of rice, and certain quantitative limitations 011 Philippine sugal', cigar s and tobacco) to enter the United States duty free, provided such products did not contain moi'e than 20% of foreign mater ials in value, Concurrently, American products, (except rice) entered the Philippines free of duty, without any limitations as to quantity or materials used in manufacture,

THE COMMERCIAL & INDUSTRIAL MANUAL

The fourth phase of American Tariff policy which was still in force at the time of the enactment of the Independence Act, was inaugurated by the Tariff Act of October 3, 1913. The essential cbange in policy was the removal of the limitations on the quantity of Philippine sugar, cigars and tobacco provided in the Act of 1909 and the elimination of the exception on rice. Except for the limitation on the foreign material content of Philippine products g ranted cluty free admission, the Act of 1913 established complete reciprocity in commerce and trade. The underlying purpose of Congress in estab· lishing free trade was to give preferences to Philippine producers, and enable American exporters to enjoy the Philippine market. An analysis of free trade will demonstrate that Philippine products..received only an incidental tariff protection in the American market, since the tariff laws were enacted ~l'imarilY for the purpose of giving protection to goods produced in the United States. Sugar, coconut o~ and other Philippine products received American protection only because of their being identical with or similar to products produced in the United States and protected under the American tadff laws. ~ Conversely the Tariff Act in force in the Philippines since its enactment b Congress in 1909, contained specific provisions giving direct protection to American products entering the Philippines against competition of similar foreign products. In enacting the Philippine Tariff Act, the United States decided for the Philinpines which American products shou l ~ be protected in the Philippine market. The United States Tariff Commission Report No. 18, 1931, in an analysis of this subject found that-

Despite this protest, Congress deemed it advis· able to establish free trade in order, in the words of the late statesman, Elihu Root, that the United States duty towards the Philippines would be ful· filled "by giving to them the opportunities to national power, to grow in the accumulation of property and the diffusion of wealth l,ying at the foundation of civilization." The late Congressman Oscar Underwood, speaking on the floor of the House in support of his proposal in the Tariff Bill of 1913, removing the limitations on Philippine products, portrayed the situation of American-Philippine trade relations as follows:

The P.opor~ion of the United St~te. p.o<\n(>t.s enjoying tRriff preferenc .... in ~he Philippi,,!!! !lnrle. dnty-fr<:e trllde relatio'" hM neve. been Ie.•• ~h~n 117 per ~ent ... hilt the- propo.ti<m of Philippi"e t ... rle so l ~vored in th~ l1"itNI St~te.. hn s r~ "Jt~d from as In"' ~, 22.5 ner rent (d'lring the World War yea. 1917-18) to a moximllm of 77.8 in 1929.

..... The public bcnefilll thnt h~ve n~rr"cd from the ... eolth e,e~ted dnrinlt the In"t 35 ve~r8 ore too nUmerOUB to catalog f"l1y . A few mny be "k~tc1>ed: I. Hi .. he. at"ndn,dl of diet, ~lnlhi,,1': "nd hn".inlt have lilterl thr Filipino laborer fft. obove the level on which he fOrlllerly I;'· ed. 2. Shte fund~ hnve been pTlwiricd nnt of whirh .~il r oads. hilth"'lIys. b,idgel, nnd portl h.. ve been brougbt mto uadul being. 3. St.!e " Ry.nll. make p,,~.i ble th~ hig"""'! '''' e'''u ul"ry lor government em"l<,yee:l nnrl !1>~ IRrgest number per CIIpi!a to be found ;n the Orient Or T rnpiNt. 4. Pr;v!\le Cl'pitBl i. "vaihble fM in"eltment in SUltn. milt.. 0;1 milla •• torCl! ~nd offire», la nd and hOll .es: enpillll that hna been lI,ed to modernize the old indllatriea and erent .. ne .. ones • 5. LeiS tangible bllt eqllally important nre the reqllirement of bette. hulth. wider ed"etlt;(ln. ftnd highe, aeienti6e a nd .rtilll;c culture. a nd nil the chnin of Advaneing ,ocial IIlIndnrdB, which come with an npandin;: and difill,ed economy.

When free trade was being considered by Congress in 1909, the Philippine people, through their Assembly, opposed its establishment in a petition which they submitted to Congress, on the ground that-• • • free Irnde Uel ... een the United ShIM and Ihe hl"nd. .. o"ld ;n the I"l"re become high!)' prei"di~ inl to Ih" economic interests of Ihe PhHippin~ people and would bring ~ bo'" ~ 8ituation whi~h mi .. >'t hinder th .... ttainment 01 the independeDce of the taid people.

Wo eould not honutl)' flleo t·hoftc dependent people who give us lree trade in their mnrkl!t ft if WI! close 011. door~ here ** .. BM~u " " we do not wonl to 8tnnd nnd fo~e thot world in ollch II position nl thnt nnd sny (to the Filipino.) Ihot IInder Ollr la,,' we command yOIl to open the door, ~o lion I American goods can 80w into YOIl. country, beenule we hnve Ihe pO"'cr to do it, a nd then tllrn Mound lind soy to them Ihat On the only thin!:" they (On import, prRcticolly, into ollr counl.y and m nk c R market 10. we will do!C ollr d oo'l nnd p.event them developing th .. i. trade. ( any that 00 t.ue-born American citi1en who latea the q llea lion fairly and , quarely and understandl lhe "i tllolion ..~1I eonaent to thnt.

BENEFITS OF FREE TRADE

Notwithstanding the difference in the application of reciprocity to the commerce of the two countries, the result of free trade has been mutually advantageous. With the opening of the tariff protected American market to their products, the Philippine reople were able to develop sugar, coconut oil and other industries, which have later become the foundation of their economy and the main source of their income. Governor General Frank Murphy in his last message to the Philippine Legislature, November 14, 1935, said:

PHILIPPI NES The free trade arrangement gave the United States a virtual monopoly of the Philippine market. During the last ten~ear period of the Spanish regime, from 1885 to 1894, of a total $111,307961 of merchandise imported by the Philippines. the United States supplied only $3,202,432 or 2.87 per cent. During the first ten· year period of American sovereignty, but before the establishment of free trade, from 1900 to 1909, of a total value of $298.· 936,198 of Philippine imports, the United States supplied $45,459,084 or 15.21 per cent. After t he establishment of free trade of the total $1,121,124,419 of merchandise purchased by the Philippines for the ten·year period, 1924 to 1933, the United States supplied $684,361,995 or 61.04 per cent. These figures po,tray a concrete picture of the metamorphosis of Philippine commerce from one dis· tributed to countries of the world, before American occupation, to one largely confined to a single country. OFFERS OF INDEPEDEN CE

Soon after the Philippines came under the sovereignty of the United States, the Philippine people were informed that America's object was to administer the affairs of the Islands in their behalf and that eventually, if they desired, they would be given their independence. Every President made public statements of this intention. President Wilson, in a message to the Philippine people in 1912, saidWe r Clllrd eurselv .... es trustees. llotinl, no~ fo r tbe ndva.n. InllO 01 tho United St~tell. but fo r tbe benefit of th peDple Df tbe PhUippine hlllDd!. Every al ep we toke will be tokcn with a. view to ultimate independence. lind we hope to move to ...."rda IhBt cod BI r"pidly 118 Ih~ lalelll and jh~ p.rmanonl inloro'la 01 Ihe I.land, ",ill p~rmit.

The Organic Act of 1916 embodied this Amer· ican policy to withdraw "sovereignty over the Phil· ipipne Islands and to recognize their independence as soon as stable government can be established therein." The Philippine people repeatecUy petitioned Congress to grant their independence and mission after mission was sent at intervals to Washington for this purpose. THE FIRST OFFER

In 1931 Congress began extended study of a bill providing for ultimate independence. It passed

the first independence offer, by an overwhelmi ng vote, but the offer met with the disapproval of the then President of the United States who vetoed it. The H ouse, on January 13, 1933, and the Senate, on January 17, 1933, passed the measure (by more than two-thirds majority in each case) over the Presidential veto. The original offer was not to become effective until approved by the Philippine people. It was, accordingly, promulgated through the Governor Gen. eral, and the Philippine LegislatUre met to consider the proposal. The result was rejection of the first offer of independence contained in the Act of 1933. THE SECOND OFFER

The Honorable Manuel L. Quezon, now the dis· tinguished President of the Commonwealth of the Philippines, then visited the United States with a Mission to negotiate with President Franklin D. Roosevelt, and with Congress, a new offer of Independence. After severaJ conferences between the Philip· pine Mission, the President and leaders of Congress, a second Independence offer was passed by Congress, approved by the President on March 24, 1934. This second offer differed from the first offer in some respects but there was no change in the economic provisions. A SIGNIFICANT HISTORICAL FACT

Here develops a fact baving a direct bearing upon the study which iYour Committee is making of this subject. The Philippine Legislature, after examining the terms and c.)nditions under which the original independence offer was made by the Congress of the United States, rejected that offer because the conditions were not satisfactory to the Philippine people. When the President of the United States, on March 2, 1934, recommended the renewal of the second Independence offer he stated: I do DOl believe that other prev\siOllll of the orilli",,1 law Duded be chll"ged at this time. IVhtr~ ';mp"'I.~h·on. or in· <Q"o/iliu <"';11, I (1m confidenl jAdl Iholl C/ln b~ <one<I,d d/ur proptr it .aring and;n lairno .. /0 flollt poop/...

The second Independence offer was passed by Congress and approved on March 24, 1934. The Philippine Senate and the H ouse of Representatives, in joint session on May 2, 1934, passed a concurrent resolution accepting the second offer,

THE COMMERCIAL & I NDUSTRIAL MANUAL

and expressing the g ratitude of the Philippine Legis. lature and the Philippine people to t he President and the Congress of the United Stales and to the American people, ] n the preamble to the Philippine Legi slnture's resolution, will be found the foJlowing: W ILcrc", . n]lhough thl) P!tilil>piM I.<lll:il]"lllre bellcvcs certnin I'To"ilIions of 5~id net nced funher ron.idcrntion, the ui,1 I.~gi~h'turc t.!eern" it i\5 duty to ncecl't th<l prQlTcr of inucpendeneo tlluS n>:>de by the Covcrn",cttt of the United Sl"ttlll(a) BCeIlU 5<l the lo'i1ip;no people cnnnot, cons;stent with t.he;r u"tioo~1 di!!:"il), nud lo\'c of frcedo"" dedillc to neeept thc ind<ll>cudellcc that the 511id Act I:tnnu, ""d th,,~

(b) Bec''''sc the P rC!!idcnt of the United SInteR in his m,,"Rge to Congress on :'>Iorch two, Nineteen ILundrcd ond recommcnding lhe en"UllUont of snid law sta ted: "1 do nOt beLie"c d,,,t other pro\'i8ion~ of the origina ll"w neerl be c]uulged ~t thill lime. Where i",p"f,(lioll' 0' in<quolt/i•• uill, 1 "m ,0!>fide,,1 ~al Ih,y <(In ~. wrr,c/ed (Iller pro I'''' h'''''IlIl' 0",' ,' " J<li,,'en 10 bo~. p<opl •• " " .lalfmrrlt which (lir~. 10 II" f'ilipillo p<!opl. ,ca.onolole " " Ur/",e.' 01 Jurlhtr hea'iN(I$ nlld • ~,,~.,I,'(lI,oll of Ih." Thirty· l~ou r,

.,',\0•.

tI".

The passage of the ?res ident becomes part of the official acceptancoe by \he Philippine Legislature of t he offer of independence. F ollowi ng the adoption of a Constitution, the Commonwealth of the PhiliP~ines was established during a memornble ceremony on November 15, 1935, At a J oint Session of the Philippine Senate and H ouse, the Vice President of t he United States and t he Speaker of the H ouse of RlUlresentatives accom· panied by a distinguished group of United States Senators and Congressmen and their wives were present, The American Vice President sai d: Our Irn<!e rch\lions hnvc grown to ~ ufth prcp"rtion~ llta yo" I,,"'e ""til reccntly mnked a~ our dghth b<'.'ll CIISlomcr, "nd, IhrOll,::h tlt ol" w~ p""sed by Oil. Cont;:'ClI5, we hn,'O nat on]~' bcon your IIC$t cll8tornc., lIut practically your 601e e,"tomer. 'frnde r el,uioo$ of ~ benelki,L! d"H~Qler rost CJ,~I"~;"dy IIpon two ~h;nt;ll; lhc nbility to ~eLl, l;iv;nJlllte "bimy to buy. Our gre~t l're...idcnt, Ftnnklin O. Itoole"cll, in 5cnci;"g t he I,,", inucpcndcnee bit] 10 Congrc.!, accomJ>nnied it with II rccommcnelntion that "'here Ihcre ,... r~ illequu/ili .. in OUT I,,,de .clalion,. /hey .hould be udiu".d Itl/" COMmilliolt .~pru."li"o boll. p,opl .. ,cl.o t4uld (I"i., (II alt "lui/able d~ci.ion wMcIt "'0"/</ pro.end<0'*'II<OU810 ou, 120,OOO,()()() p~ol.lea"tllo JlO" 14,()()(),(}()() I>,opl ••

And t hi s, l hope, after thoughtful considcration and investigation, will work out to t he mutual advantage of both nations, The late Speaker Byrn , following Vice·Pres· ident Garner, said :

When the time COme!! for tho llepublic to replllce the Com. "'O"WCIIIIII. wc be]iove t]m~ the condue~ of ito /lIJ/I;n during Ihi8 pcriod will ~o impr~5 thc ""tion~ of tho world Ihnt th o neW HOllybl;" will begin its enreer wilh not o nly the old friend5 hill of "'Y <'ou ntry, bUL th~t ull the enligh t cned nlllion! of the ea r th will un il e in il ~ protection lind in the pr\!ll~rvl\tieu of its aov· crci~nLy.

The II r ~nl Au,eri""n NAtio n will w/llo h you r do".,lopment with keen ;nlcrOOllt ""d, wlLcruver we "'IIY, will oxtond " help;ng

]",,,d,

YOLl mise llroduct~ which nro not ",iaed in the United Stn t Cl, We iell YOlL mnoufnctllred Rrli .. lea which nrc not mllde Itdicre Ihol Pu.i,le,,!'. will in yOllr country, '~orl: 011.1 "II ",uilable ph'" bene/ic;ul I" bol" ou' ,,,.lion • • onri Ihal Ih, ".,,11 Of ,'I! rceommro.d(llio", will ""110M,,, lhe liC! '''nl « illlt'conte .lrOIlDer ",illo Ihe P'Uf'l,

Ih,

Co,,,,,,,'.,,,,,,

The Senate Committee on Territories and In· sular Affairs, in its report on February 24, 1932, recommending the passag-e of the f irs t Independence offer, stated: T wonty,Fl.'c ~'enr~ ,,,;0 rrcc'trml~ r~h\tio"8 were estnb· li.]u;,d bel ween the United St"tc~ Aud the Philippine I!lnnds. 'rhi~ WIIS dono b)' the America" Cong . ess "gnin. ~ the exprc!I:'Ied d~ire "nel de, pite the oppaa;tion af tho people of the l1!]"nds. ... s a eon5equence 01 frcc tnde. Philippine industries aod tnd .. with the United States hn"e dove]oped on IhM bms;~. This ftTrangcn'cn~ resulted ill nil nrtili~inl ~~i",u]otion in the I>codll~tion of certain Arlie]es IIltd ,nn""facturett io the Phil. ippiltCll. nnd an e:nrnordinary in.. ,-",~o in Ihe 1'ol"me of American Philippine tr"dc with .. cOTCI:"pondin8" dccreluo in Ihe IfIlde of the 18] nd~ with foreign countries, Ob.io"dV tI•• ezi.lino lroe Ira,h ,e/al,·oll. Ite/w,~" 1/" Unil,d Sial" (1",/ Ihc P/,i/ippin.& ."""01 be lerm,'naltd "b,,,plfy fJ)ilho~1 '''l~ II ' inj,"V Iu Philippi", ~co"o ",ie i"l~r«1I Qnd ,\"''','''''' I,a e w,'l}, Ihe i $I" "dk. Both .e'luire " tlcfinitc limo to prcpllre for th e chango, ],"'estmcnts m"dc on the bllsis of Iree lrode 11l1U~ be gi"cn time for IIdjllstment or liquid"tion "'ilholl t 10M. l'hilil>pine inlcre'lts mll~t be given time to e'ltabJilIh the1Tll!e]vc~ o n .. com petitive bn1!is before the)' nrc plnced outsidc of the tnrilT wnll. of tiLe L'nited Stat~". DE VELOPMENT OF THE SUGAR I NDUSTRY

When :Mage1Jan discovered the Islands in 1521, he found tha t the Filipinos wet'e already engaged in the growing of sugarcane, The development of the sugar industry in t he Philippines may be divided into three sta ges : fiI'st, during the Spanish Regime, prior to American OcCUIJat ion; second, during the first ten years of American sovereignty; and, third, during the estab· lishment of free trade. Under the Spanish Regime, the indu st l'~' in t he Philippines was in a l'easonably high state of development, It was established on a competitive basis with the other sugar producing countri es of t he wol'1d. Production was then, a s it is now, carried on by s mall farmers each of whom installed on his little fat'm a wooden mill powered by a carabao. Undcr such equipment sugar of the low grades, commercia.lly known as muscovado, pilon, and pano· cha was produced, and found a world market,

PHILIPPINES During this period, sugar constituted from 30

to 50% of the value of all agricultural products exported from the Philippines. In the last four yea .os of Spanish Regime, from 1892 to 1895, an average of almost 300,000 short tons of Philippine sugar was exported, while in 1895, 376,402 short tons was shipped abrond, an exportation not exceeded until twenty-seven years latc" , It is significant to note that during the Spanish

Regime, the United States was the best m2.l'ket of thc Philippines for its sugar and at one time as

high as almost 70% of its total suga., cX;>Ol'ts wcnt to the United State!!. With the outbreak of the Philippine revolution against Spain in 1896 and against the American Army of Occupation, in 1899, which lasted until 1901, the sugal' industry l"ec.eived a severe setback. Sugar exports from the .Islands decreased to approximately one-fourth of the pre-re olution level. In order to alleviate he distressed condition of the industr~' resulting from these s ix ,y ears of war, Congress reduced, by 25<;(, the tariff duty applicable to the Philippine sugar in the Tal"iff Act of March 8, 1902.

This did not bring the l'eHef sought; the industry continued in a distressed condition, during this first 10-yeal' period of American occupation. The United States could not estnbHsh a reciprocal trade, as the Treaty of Paris gave Spain a pel'jod of 10 years of equal treatment with the United States, With the expiration of the 10-year period, the United States established closer commercial relations and enacted the Tariff Law of 1901 establishing free trade with a limitation of 300,000 long tons dutyfl'CC sugar. This limitation was removed in 1913. American ca])ital hegan to flow into the Islands. Encollrngcd by the goVel"nlllent, it made investigations, and its enterpl"ises were stimula ted by government approval. In 1910 an American company erected the first modern factory at San J ose on the I sland of l\-[indoro. Later, in 1912, otner American capitalists erected the first coopemtive. central at San Carlos on the Island of Negros and another at Calamba on the Island of Luzon. These were the first modern factories erected in the Islands which did the pioneering work in the modcrni7.ation of thc method of manufactUre,

C"PITOt; BOIl.DINO--.5AN FRlNAN"OO, PAMPANOA PROVINCE

• 46

THE COMMERCIAL

INDUSTRIAL MANUAL

rives money to finance its requirements, the condiIt took from 10 to 15 years inducement on the tion of the industry is necessarily the best baromepart of the representatives of the American Government before Philippine producers realized the full ter of the national economic life. benefits of modernizing their methods of production. The Commonwealth Government derives a large The Philippine Government created a Sugar portion of its revenue from the taxes paid by the industry. Sugar furnishes the major portion of Control Board in 1915, charged with the duty of promoting and giving financial aid to the industry the total national income; it supplies the bulk of through loans to corporations and purchase of bonds. the business of the banks and the freight for GovIn 1916 the Philippine National Bank was created ernment railroads; it provides support for 2,000,000 people who directly depend upon the industry for which gave further financial aid to the industry and accelerated the change from the old muscovado mills a livelihood. to the modern centrals. With the incomc derived from its sale in the With the broadening of the American market, United States, the Philippine people have been able production increased. This was accelerated by: first, to finance their impl·ovements in sanitation and the change in the method of manufacture from pdmhealth service, public works and education, and to itive mills, to model'll ccntrals, resulting in an in- enjoy an economic prosperity which has enabled crease in rccovcry from 60 to 95 pel' cent; and, them to raise their standard of living to 300 per second, the incrcase in thc unit ,y ield pel' acre by cent ovcr that of their neighbors. the introduction of higher yielding varietics of cane, A nation buys as it sells. This is true of the the same varieties of cane planted in other sugar Philippines. Sugar, the principal product, provides produeing areas, including Java, Hawaii and Puerto the major portion of revenue with which to purRico. chase American products. There was only a slight increase in the Philippine acreage devoted to cane, and no extensive exCOOPERATIYE SYSTEM pansion as in other countries. The greater portion One feature of the present system of producof lands devoted to cane tod~y as been utilized for tion is the cooperative relationship between plantcane culture for centuries. The. increase in producers and centrals. In other countries the factories tion was much less, eomparat~vel y, than that of not only own the land but a lso grow the cane; in other sugar areas. the Philippines the centrals generally depend upon In 1895, the Philippines produced approximate. the independent growers to supply them with cane. ly 431,000 short tons whilc its peak production was Acquisition or lease of public lands is limited 1,652,693 short tons in the crop :year 1933·34. In by law to 1,024 hectares, or 2,500 acres, preventing a period of 40 years the Philippines increased prod- excessive land holdings. A central has from 50 to uction 383 per cent; for the same period Cuba in- 4,000 farmers on whose good will it is dependent creased 489 per cent; Puerto Rico, 662 per cent; for its output. . ' Hawaii, 412 per cent; United States beet, 1,988 per This cooperative system is based on a milling cent; and Java, 546 per cent, as disclosed in the contract entered into between the factory and the following statistics: farmer, under which the planters obligate themR,,,,rd p,,,duclion pri'" selves to grow cane to be milled by the central 10 Am"',on o<"cup£l- Ru"rd p,,,dudioll in P,rcen/ while the central furnished transportation and mills /i"n in 1808 ,<,tnl /1""'1 incr""u the cane into sugar. The planters give rights-ofShott ~ons Y~\r Shott tone Ye~t Cub •. . 1.180,000 1893-94 5.175,000 1928-29 way f or the railway of the centrals over their pro1933-34 662 168,000 1897 1.113,000 Puerto Rico. perty and plant at least one-half of the area of their 251,000 1897 1.035,000 1932-33 Haw.ii .... land upon which they agree to grow cane during United St.:Itu 1,73(\.000 1933-34 1,988 1895 (beet) ... 87.000 the life of the mi!ling contract. The central re383 -&31.000 1895 1.652.593 1933-3~ Philippi""".. . ceives as compensation for milling the cane and 602,000 1895 3,292,000 11127-28 J:W!l. • . furnishing the transportation a share of from 40 IMPORTANCE To NAT IONAL ECONOMY to 50 per cent of the sugar produced while the planters receive the balance of from 50 to 60 per· As sugar is the most valuable product which the Philippines sells abroad and from which it decent.

'" "

PHILIPPINES There nre at present 46 centrals with some 23,000 farmers, a majority of whom own only a few acres, who have entered into contractual relations with the centrals. MAIN EXPORT

Of the total value of $136,448,053 of products exported from the Philippines in 1936, excluding gold bullion and ores, sugar constituted 46 per cent, as the following Insular Customs Collector's data show: To aU """n !rie.

To M . Unitt<! Skllu

Tot"l SUIGr .•

Coconut product!!. Hemp .•.....••.•.•

Tab(lcco product!!. Embroldcrj~ ..

Ollie... ,

Tatlll.

Value

p",c~1

$ 61,937.322 36,008.1015 17,Oflll.6UO 5.:11-'. 783 4,27'1,666 ~ 12.80-1,649

""" •

$1~.H 8,053

, 3

Va/". $ 61.927,184 28.097.038 6,3:\6.711 2.Stlll.O-l1l

Tal ..1 p""cent

5,336,008

"" ".,"

$107,625,326

4,266,336

I NVESTl\tENT

The indust~ is financed mainly by PhilippineAmerican capital. The total aggregate investments in the industry amounts to $260,753,886.67 of which $93,253,886,67 represents investments in factories. Of the capital invested in the centrals amounting to $93,253,886.67, 43 percent is Filipino, 33 percent American, 23 percent Spanish and 1 percent cosmopolitan.

NEW THEORY OF CONTROL At the time of the passage of the Independence Act, and at the time the Philippine people accepted the conditions undcr which independence was offered, there was an entirely different situation presented with respect to sugar from that which has prevailed since the passage of >the Sugar control provisions of the Agricultural Adjustment Act. When the original Independence Act was being drawn, Congress had not considered the matter of quota control. While domestic production did not supply domestic requirements, there was a su o gar tariff, but it did not apply to the Philippines. Whatever fear may have existed at that time has been dissipated by the adoption of the quota plan. Congress determined a "status quo" for 1931-2 which was fixed in the first Independence offer of 1933 at 850,000 long tons, of which 60,000 tons was to be refined and all of which may enter the United ~tates duty free during the ten-year period of adJustment.

The present Independence Act, establishing this status quo of 850,000 long tons, duty-free (the equivalent of approximately 972,000 short tons, raw value) was approved by the President on March 24, 1934. The duty-free limitation of the 1934 Act is identical with the duty-free limitation of the original Independence offer. The co-author of the first Independence offer, the Honorable Butler B. Hare, Chairman of the House Committee on Insular Affairs, after a personal investigation in the Philippines, in a written memorandum, r ecommended that the limitation be increased to 1,100,000 long tons. He said: It we ArO going to Ink" tho "aInu" qu o" Or "uioti n" i""MIments '· (U th~ hui! f ... fiEing the limitation, r think. in . t oad of taking th o upor! 6gu rell of 1931 BS n b~si. for th e limitalion" on ~ "gGr. we should tnk e a, neB. BS poni ble the export figur "" nt the t ime the li mit&tionlgo into effett, beenuae many of the plantel'3, ,. 1 hIve alflled, ""ve nirudy maue thei, investments in better seed and in lome Cales provided a ayatcm of irri,4lion which will , ,,,,ult in the indiclltcd production by the time the p roposed legi.-· tation can be made effective . tn that event, 0,. li".. ("I'oll$ on ~_r . "" "Ir~"dll 'Ullllu t~d, .hould 6e at Ie" ' ! 1,050,(J{)() ionq lon ~ ." .. and 60.000 Ion. u/in~d.

By the time the second Independence offer of March, 1934, became operative, productivity of sugar in the Philippine rslands had reached 1,600,000 shorl! tons.

The Commonwealth of the Philippines was not inaugurated until November 15, 1935. Had the Phil_ ippine industl'Y been governed only by the Independence Act, it could have marketed in the United States, prior to November 15, 1935, its entire production. On May 9, 1934, 46 days after the passage of the second Independence Act, Congress enacted the Sugar Control (Jones-Costigan) Act. Between the pa~ sage of the Control Act in May, 1934, and the inauguration of the Philippine Commonwealth in Novembel· 15, 1935, the Philippines not only complied with the new quota regulations, but the Philippine Legi8lature curtailed pl·od/tch·on to comply with the theory of the United States Agricultural Adju8tment prog,·am, and the illdust'r y borE the loss of 500,000 tORS per annum. Under a Commonwealth statute, to conform with the United States Control Act, Philippine production is limited to the amount permitted free entrance into the United States, plus an amount necessary for reserve and local consumption.

THE COMMERCIAL & INDUSTRIAL MANUAL

There has been conti nued cooperatio n of Philippine officials and sugnr interests with the United States Government dUring the various changes of control. As a result of the control principle, a new situa tion is created, the control of imports by quota, rather than by tariff. The situation with respect to the relationship between Philippine sug;n and that f r om other domestic arcas is therefore changed. In March, 1937, the Philippine Sugrll' Association, conforming its position to the attitude of officials of the Commonwealth Goverllment, officially announced by Honorable Quintin Parades, Commis· sioner from the I slands, who appeared before the Subcommittee of the House Committee on Agriculture, ag-reed to the\lH"ovisions of H. R. 5326, which limited Philippine imports annually to the 850,000 long tons (972,000 snort tons, raw value) fixed in the Independencc Act. PHtLtPrt N

QUOTAS

all three different OCc:1SiOIlS, a (Iuota for P hili])pine sugar has been fixed \t an amount in excess of the duty free limitatiolls\ of the Independence offer. 1. A conference was called by the Secretary of Agriculture, under ])I·ovision" of the Agricultmal Act, in Washington ill the summel· o[ 1933, continuing for three months, in which represen tatives of p l·oducers and refiners of the continental and offshore areas participated, at the conclusion of which all of the areas under the American flag (Cuba, n foreign nation, Mt being included) signed a voluntary agreement allotting a quota to the Philipl)illcS of 1,100,000, with a reserve of 100,000 tons additional, or a total of 1,200,000 tons available fo,· e~flort to the United States. 2. On Febl·uary 8, ]!)34, President Roosevelt in hi s messagc to Congrc!<s proposing a quota system of control, suggested a quota for the Philippines of 1,037,000 short tons. 3. The Secretar~' of Agricultlll·e, administering the provisions of the Control Act, fixed the basic quota of the Philippines at ],049,571 short tons and has, upon tha~ basis, allotted to the Philippines annual quotas l"anging from 981,000 to 1,098,000 short tons. By agreeing 10 Ihe dItty fl'ee quot/".!- of the Indcpendence Act, Phililwinc produccl·s are (tCCCIltin9 228,000 tons lC88 than thc allof,mcnt under the vo}u1ltar}l a.gJ"ccment, 65,000 t ons less tlwn the quota

SUUDcsted uy the PI·csidcnl, and 77,571 tons le88 than the ua8ic ql!ota fixed by the Secretary of Auricullw·c.

At the time of the adoption of the Indepen. dence Act, the question of Philippine sugar contr ol was :l matter of interest to other areas. With the adoption of the quota system came an entirely new theo,'Y of control, and when the quotas were fixed at such a low basis fol' the Philippines, no sugar area has requested a further curtailment. Quota control established for the fi'·st time a limitation on all sugar mal·keted in the United States. It extended the marketing contl·ol to Con· tinental beets, Contine ntal cane, the off-shot·e areas of Hawaii, Puel·to Rico, and the Virgin Islands, and to foreign countries including Cuba. These quotas have all been based upon an estimate of American consumption now placed at appl"oxilllatel~' 6,682,000 tons annually. No objection was raised by any domestic at·ea to the maintenance of the Philippine quota in the Indepqndence Act. Apparently no domestic suga r intere~t objects to the Philippine allotment of either l·aw olj refined !;ugal' dUring the adjustment period pl·ior to independence. The quot.'\. fixed in t he I n<lependence Act doe!; not deprive Continental and other off-shore domestic areas of a ton of pr oducLion. RE~' I !'IED SUCAR

An American Refiners' witness before your committee made certain statements to which reference is now made for the purpose of clarifying the record . In his testimony of Junc 22, 1937, appcars t,he following statement, by the repl·cscntntive of thc American Sugar Cane Rdiners: In ,·ie,,· of d,~ oblillnlio" ~ und~.I"k,.." by lhi~ <:ounl.y umle. the Philippine Independence Act. "nd "~~uming thai the entire prog.,.tn of trade rclntion~ i,,.,,,,eribctl by tbp~ A<:I i.'! 10 rcrnnin undisturbed, we nrc nol Mking for any reduction in the <IU'1IIIil)· of refined sUlCar permitted to enter thi!l eounln' !lIhjul 10 the l>r<.,,·isions of d"" .\cl, p.inr 10 Ihe indcl'endcno<: of the I'hitippines.

This would indicate that, insofar as the quantity of refined sugar coming from the I slands into Lhe United Stales during the transition period prior to complete independcnce is concerned, the American sugar I·efiner~ lwv(' no objection to the quantity Jixed in the Indepcndcnce Act. Assuming t his to be th2 aLtitude of t he American Refiners, t.here would seem to remain but one

PHILIPPINES issue, whet her Phi lippine refined sugar should share rela.tively in any preference granted to the Philip,Jines after withdrawal of American sovereignty. whether in ]946 01' in any other ycar. Congress recognized refined sugar in the Independence Act. If the basic theory of an adjustment period subsequent to complete independence il> to be uniformly applied, it would seem that refin ed 5ugUl' should not be omitted from the adjustment formu la. Philippine sugar refineries plnce their yeady output capacity (based upon 300 working days) I\t 140,500 long tons, divided as follows: }'wrlll

C" llIJcilll

t.,

Oulp~1

S. E:r;pIJrl

Quota

in,ulur SUlfur Itclining Corpo,ntiOll ,

7:.1,500

~t~t~b~l~ ~~~~~gc~.o. ::~:.

33.500

7,875 S,232

110 â&#x20AC;˘.;00

50,0'.)0

33,5(10

3;l,II(l:l

These refineries su~ply about 15,600 tons of refined ~ugat" annually ~ the Philippine market. Thi!t gives them a total annual business of about 65,600 long tons permitting them to operate only at less than 47 % of pl'oductive capacity, The investment in these r efincries, exclusive of working capital, is estimated to exceed $2,000,000. These refineries buy most of their mach inery, l'epul" parts and other operating supplies from the United States, contribute their proportionate shaN to the maintenance of the Philippine Government in the Iorm of annual sales taxes, tax on real estate and income, lind promote the economic stability of the communi tics in which they are resl)cctively located. The 50,000 long tons or 59,000 short. tOllS, l'a~V vuluc, of Philippine refined sugar constitutes less than 10 ~( of the total quantity of refined sugar annually brought from off-shore areas, as follows: 440,000 from Cuba, 30,000 from Hawaii, 129,000 from Puerto Rico and 59,000 from the Philippines. I NTERNATIOKAL SUGAR AGREE~IENT

Renlizing the necessity of maintaining an orderly rclationship between the sU Jlpl~' and demand fol' sugar in the world market, representatives of 22 countries held a conference in London, April 5 to May 6, 193'7, a nd entered into an agt'eement regulating the world production and marketing of sugul'. The Conference Agreement was Signed by Norman H. Davis for the United States, and by

Urbano A. Zafr a who represented the Commonwealth of the Philippines in the United States Delegation. The treaty is now under consideration by the Foreign Relations Committee of the United States Senate, This international sugar convention will have a broad effect upon American-Philippine affairs and upon international relations. The Conference acted lIpon the theory that the United States has control of and sovereignty over the Commonwealth of the Philippines. While the Commonwealth of the Philippines was repl'esented in the United States Delegation, it was not a contracting party to the Agreement. The Conference proceeded on the theory that sugar grown and produced in the Philippines is a domestic supply of the United Stales. In the treatment of the Philippine quota in the American market, the agreement considers the Philippine quota commitment as being in the nature of a trcaty obligation. The Philippines forego the eX l)Ort of suga r to the fr1c market of the world so long a s it maintains its present quota in thc United States.

Of far-reaching importance, insofar as the future l'elationship between the United States and the P)lilippines is concerned, is the recognition by the othel' 21 contract ing governmcnts of the special American-Philippine relationship by agreeing nal to claim. in "inue 01 :lny mO~I.lft\Âˇored-nRljon ri;:hu ;:r3nled 10 them by the Government of the !Jnited Stftll!5. the benefit of ftny :1dvft"I-II;es wilh respee~ to ,ulIR r which may be aecorded to, or RGreed upon wilh. the PhiliPlli"es by Ihe Government of the IJnilcd Stal1'S durin; the period of Ihe pre'C"t ,\~reemcnt.

This would make possible the formulation of a trade agTcement between the United States and the Philippines with respect to sugal' in the event of a change in the political status of the Philippine Commonwcalth. GRADUATED EXPORT TAXE S

The second Independence Act requires the Gov. crnment. of the Commonwealth of the Philippines to impose during the last five yenrs prior to indepClHlellce certain export taxes on sugal' comi ng to the United States. This expOl-t tax is a graduated 5, 10, 15, 20 and 25 perccnt of the sugar tariff nnd will apply on the duty-frce sugar permitted undel' the Act. It has been humol'ously referred to as the "stai r-steps" provision.

THE COMMERCIAL & INDUSTRIAL MANUAL 'Vhether these "stair.steps" are to be used in going to the cellar or whether they nre stair.steps that lead to the roof, only future developments will determine. These export taxes do not add one dollar to the Treasury of the United States. The revenue from these taxes are collected in the Philippines and deposited in its Treasury, They do not :lffec't the American budg 路~t nor its balancing, nor will they add one ton of either raw 01" refined sugar to other sugar areas. They will not affect either the United States beet or cane producer, Puerto Rico 01' Hawaii, or prices in the domestic market. These taxes, howevcl', very vitally concern Philippine economy and Philippine finance and government. The "stair-stepl' export taxes provision is appal'ently inconsistent with the underlying philosophy of the Independence Act. The Independence offer wal' predicated upon ~ grant of greater autonomy to the Philippine people, that they might prepare themselves for the responsl~i1ities of an independ\'nt f:overnment. The power of ta.xation is a right of government which was certainly not intended to be with-

held from the Philippine people. Thn Act prevents its exercise by the inclusion of the export taxes provision. The purpose of the export stair-step taxes as stated in the bill, was to gual'antee the payment of the bonded indebtedness o( the Philippine Government. 'I'he Philippine Commonwealth has provided a system of s inking funds for retirement of bonds through taxation adapted to Philippine conditions, as determined by the Philippine Legislature. Congressional enactments, as we know, frequently involve compromise, ancl sometimes illogical provisions find their way into final enactment. When the (iI'st independence offer was reportcd to the Senate (with only one adverse vote) it pl'ovided for a fifteen-year tl'ansition period, which the Committee thought necessary to prepare for ultima.te independence. Another section provided that a plebi scite of the people of the Philippines should be held at the end of tht! transition period to determine, with experi ence back of them, whether they still desired complete independence. That was the thought of the Senate Committee on the subject. The bill, a s reported, provided for 10 years of unintcl'I'upted free-trade reciprocal ex-

SA N FllnNANDO MUNIC1PAL BUILDING-P.u.lPANOA

PHILIPPINES change and then, at the end of ten years, ~nd not until then, was this graduated tax to be Imposed upon sugar, the proceeds of which were to be pl~ce~ in the Philippine Treasury for the purpose of hquIaating its bonded indebtedness. The period of 10 years uninterrupted trade relationships was the same that was allowed Spain when the United States acquired the Philippine Archipelaco, and it was considered oruy fair that the new Commonwealth should he entitled to equal treatment with that accorded Spain. In the final offer the transition period was cu~ to 10 years, the plebiscite was placed at the beg;!lning of the transition period, which destroyed its original object, and the "stair-steps" export taxes, instead of beginning at the end of 10 years, were ml!de to begin at tb.e end of 5 years. Two years have passed since the new Com. monwealth came into existence. The condition of its finances today removes I:Qe doubt as to the paymer.t of the bonds. Changed conditions occurring in the United State!! and throughout the world may compel the Government of the Philippines to levy some other form of taxes for the liquidation of its outstanding indebtedness. In any program of adjUstment, it should be permitted to diseover its own sources of l'C!venue and to levy its own taxes and meet its own obligations in a manner determined by it, subject to th<:! safeguards provided elsewhere in the Act. Consideration of the subject will convince l!nited States producers and refiners that the "stairstP.ps" taXE"S do not affect them.

'RepoRT By THe PHILTPPINE SUGAR ASSOCIATION BEFORE THE J OINT PREPARATORY OoMMI'M'E£

ON PIIlLIPPJNE AFFAIRS This brief will be addressed to three propositions, as follows: I. Free uade be~wlK!n the United Stat... and th8 Phil. Ippin ... in the volume pumiu"d by the Tyd;og.-McDuffie law;" of such adY"ntage to botb partier. and ita termination

;'I,~~ltt :I:';!ldb~b c:::t~~~":d~rno:t ~':.r~~~8 v~~ut~:.l:.~i!1Jl~Zr;.

2. Ao a eoroll"ry 01 the lorelloin •• raw and retinal. .~a; prodlleed in the Philippinea ,bollid have I.ee aCCeM to the

~lr~=?~t~6~kffi~ i:w~tb~::~c t~he aUi:l~~ St"'t~t~"!Il~ti~~~

nbly 10deret! tbe development 01 tbe Philippine aUlar iodustry. nnd beeallla of the impOr\ .. ot8 of that illduatry in the e:EJ)Ort trade 01 the Philippin.... 3 . The I[raduated 8Kport tllKC8 upon Pbi!ipt'inn eq ... . .... well /La Uneo etber ]'hilirpinc ""perta to the Untted Stnt ... . imposed undtt the tc.nu 0 the Tydinp-MeDuffie l .. w during the IAllt five 7U", of th e Commonwe .. ltb period for the purpOlta

r!t!,::,~i:~nfh: ~~n,.~:3 i~d~tt~n!!'.C olfBtt~pn~ilrf f~e~~lr8a1,':,~~

;OGet. municipalitiea and l""trumcnt .. liti .... ahouyg be abolt. bed.

Of these is their order: [

Free ttade b etween the United States and tbe Philippines in the volume permitted by the Tydin_gsMcDuffie Law is of such advantage to both parties, and its termination wou ld work s u ch disaster upon the people of the Philippines, that. it sho,:!ld be continued, in at least that volume, mdefiDltely. Under the Tydings-McDuffie law the products of the United States enter the Philippines duty free without any quantitative limitation whatsoever during the Commonwealth period. Philippine products enter the United States duty free during the same period subject to the following quantitative limita_ tions : I.

Unrefin ed aUllilr-800.000 long tooa.

Yarn, lwinc. cord. co rdR ge rope Bnd ". . ble. tarred or UIItarred. wholly Or in chief va lue of. Manda (abnen) Or lither hnrd Iibcl'lt-3.000.000 I,ounda. aID ee nm ended ).

~: ~~~~:e~ 1~~~::20t~o~O I~onnll" l~on~~'

Furthermore, the Commonwealth government is required, after the fifth year subsequent to the inauguration therefore, t:o impose an export tax on all articles that may be exported to the United States free of duty at the rate of 5% of the existing American dqty on like articles from foreign countries during the sixth year, 10 yo during the seventh year, 15'70 during the eighth year, 20 % during the ninth year, and 25 % during the tenth year, the proceeds of such exports to be applied solely to the payment of the bonded indebtedness of the Philippines, its proYinces, municipalities and instrumentalities, until such indebtedness, with interest, is fully discharged. With the withdrawal of American 80vereignty, nll articles coming into the United States from the PMlippines will be subject to the same duty as that imposed upon like articles imported from other foreion countries; and the government of the Philippines, of course, remains free to impose such duties as it may see fit upon articles coming from the United States into the Philippines. There is a seeming lack of complete reciprocity in the provisions of the Tydings-McDuffie Law in that the United States has complete and free access to the Philippine market during the Commonwealth period, while the ftee access of the Philippines to the American market it not complete in that it is subject to the quantitative limitations. It is :recognized in tbe Philippines, however, that this lack of reciprocity is more apparent than real in that, generally speaking, American importations into the Philippines do not displace Philippine goods in the Philippine market and are limited in the very nature of things by the volume of Philippine export trade.

THE COMMERCIAL & INDUSTRIAL MANUAL

However, under the T~'dings-McDuffie law it is ob,-i(lus that, whatever the effect of the application of the graduated export taxes during the last five years of the Commonwealth period lllay be, the penalty imposed thereby after the withdrawal of American sovereignty is the absolute exclusion of Philippine products from the free American market. There is ~I!ti/"e Jtnanimity of opillion upon the pl'oposition that this is n death pc)!atty for the Philip]line SU,Ilfl1" illciust)"y, (t$ 1V(~/I as /0/" most of the othm" leading iJ!dl!stl-ies of the PhiliJJ1)i1H~8. The Commit tee is f,lIniiiul" with the figUl"CS showing the trend of Philippine.American eXpClrts and the decline of Philippine.foreign exports as a result of the impos:i tion of the free trade relationship. However, it will do no harm to repeat the figllres here. They are as follows: ( Page 23, Report 11 8 of th(' United States Tariif Commission on United States-Philipp'ire Trade): ,

)'rM

Or A rtriloe

!SUIl 1901 (3 yr..) __ , 11102 10 June 30. HID\) 7 ':i yr~.).. WOO-II (aU; YT'$~j'

:g:g:~~

1!l23 ... IIl21 192.~

1926 1927 192fl 192fl 1930 1931 ..• 19~2 .. 1933 1931 1935

H;~~3: .

To AI! Co,, S 20.780.

'I,,'t~

.00

3L5fl8.000,00 -I6.653.000·ft 88.(137.000. I [1.!l85.000.0 120.71;3.000.0 135.3~S.OOO.00

148.877.000.00 1:1(1.88·1.000.00 155,574.000.00 1.;5,055.000.00 If;4.H1.ooo.oo

13:1.167.000.00 103.972.000.00 95.338.000.00 10",771.000.00 110040-1.000.00 01.246.000.00

Tu Couanc,,/al Pucenla(1e United Sial'! ofU. S.

3.SI-l.0oo.00

18%

11.883,000.00 20.300.000.00 52.921.000.00 69,08'1.000.00 85.017.000.00 97.3/01.000.00 109.04S.0OO.OO 100.003.000.00 116.035.000.00 115.58(1.000.00 124.-1(15.000.00

38%

IM.:~2.ooo.00

83.422.000.00 82.0-18.000.00 91.313.000.00 91.84 ·1.000.00 1·/.0313.000.00

-I3~ GO

62 <

~g%

73 % 73 ~

~~~

80~ 80~ ~~~

The Committee is fantiliar with the history of trade relations between the United States and the Philippines. Free trade relations between the two countries became effective in 1909. It is of recol"d that this .~t(l,fltS was im1JOsed by t.he Ul1ited States over the 1})'ot <1s1 of the Philippine Assembly, The members of the Assembly feared that the effed of that statns would be the building up of an economic st.l'uctlll·e in the Philippines so dependent upon the American market for its very existence as to make a severa nce of the political ties between the two (,olin hies disnstl'Ous in the.' last deg-reB t') the neople of the Phi!ippines. The Filipino people, however, admit that the free trade relations between t he two countries hnve been responsible for the tremendous improvement in the economic and social conditions of the Philippines, The ienrs of the representatives of t he Filipino people in Hl09 mny be justified should the Tydings-AfcDuffie law not be amended as re· commended herein, since the law has condemned to destruction the Philippine economiC' structure built up as a result of the free trade relations imposed by the United States. ]~ is thus seen that the proportion of total Philippine prodUcts marketed in the United State:;: increased from 18 % in 1935, and that the increase was greatly accelerated by the imposition of free trade I'elations between the two countries. It is tlms 1!Ot too much to say that ajle}' 1940, the pl'iJ'cip({[ effect of tile Twlit>gs.il1eDuflie law will be to clest.)·oy apP"')ximalely 600/'0 of the pl'ese.tt export trade of the PJdlippines beea1tSe that trade is depende1!t 011 f)'ee t)'Q(Ze with th~ U1lit('d States,

PUNDA.lfENTALS 01" 'PIULIPPIN{t.AMER I C,IN TRADE RELATIONS I,

The Irade rel"lio", bd,rrCIl lI.t Unil(d SllIIe. <lnd II••

Philippi~~ Idll~d.

true rJ~tnilelY dt{trn,in,rJ

bll Ih6

G'''"i'ion~

0/ Iht

Z;r;'·:~~~~:f/,~tlt!c/prI7~~~,,:"~~o~ie.19~g;.,JI;r,!r;!~' ,:~I:~ ~~~~::I a":rJ I;~,t,;;~~~dto'? :~1 :,,~tB:;:'::' /i,{ 1;.i.;H;;I;~~ /:i~t!d.wi,~r~o'i~:

cur.td oblig<lli,o", a"d ,,,,,de com".. I_mt"~' The I,,,dt rcllllio" • •0 dtl""'inerJ. in OO<)d failh and 'n /oirnn', rnnnol. Ihtrtjorc. Iu ollered 10 II, ... prq"dlu. TI,,, • . ol/ca.1 ",u.1 J"'IJ':. 1946'

ild. (~~d .!~ti~tt~';i.ar:tt~ri,1~li1;··~:if{' '~~;;:Ie~rl;;~r "j,~~~/:'h~::!h:~t I:t" ':,%:,,~~i~~II~'r~co'~~ ~i.rr;:.~~}j"'ft~~~~~' t:(I:J!~:I~,~mJ,~!ui"tlldl~l~

'n /o th. UIIi/,iI Sill'.!: a,,,1 . (b) il,liel.. II.~ gro1t'/h. l,.od,,,I, or "H"H.jlu/uTe of lilt U"ileti StilUS "1.o,,M. /II' a b,,,i. "f rqtlalo'lu orliclu Me gro",lh . product. or >no,wj"etur. oj Ihe "MI.Cp""t l llo"dl . L. adm,'Ued f,e. oj dlll)/ iltlo II" PMlippinu. .ho,,/;J\. ·):';,~t/r or oll.tr /a%" u' ieil dirUlly or ,,,dirully ,n,,11 ,'" 0"1/ d,·.crimi""tio" a{/oilUli Iht prod"ct. of t;lltu c<"... I'1I

"'iI"

.fl. The i"'pOf ilion 0/ UpOrl lart. Oil .hip""nl. f,q", Ihe PhiUppiM Ida ltd. 10 Ih. I.: ni/.d SlalU fro", ,Yoremb., 16. 1040 a"d Ih •• ".po. ilio" of ""po,1 ,ltI/u. 1>1/ .Ihe Unitcd Sial •• ~,,<I !h. Phil'PI"ne l a/and., .ach Olt arlid.~ Ih, grotl"lh. prod"c/., o~ n"'n"/~dur~ II/ th oth.".. from JullJ 1. I!)4G, ,nil be 'di.".'ro,,~ 10 I/.t ,.,od"con mantl/acl"',,, 01 botlt lInd, Jh. li,"~ I, •• ny 100 ~ho'ilo ma/:e Ihe IlCceuary rC<l<lJ".tm.nl•. to //'( 1'1Iilipp.". 181,,,,,/1 ill parhcular. lI,crefo,c. (a) TJ.c cr.porl lau•• /.0,,1<1 I,~ rtl'ealtd; "",I (b) Free '.ade bdwu .. 1/•• I,eo W. prtl'1I1 Or olhtr rta$onahlc ~ua"li/ali". lirnil"Uonl . ~hotlld /,e .O"""UM oflcr July -I. 1 9,,11.

",,<I

COUIII,i••,

CO",.,,;.., ..

b.IIC!~ 1{.r:e1Y:i:;~/ ;1a1.a."~"d~~;:C A~li:~;in~°'l!i~~'d:I~::':'dOfb.'h:dr~:{!i;;~~:c I;'t:;r,.d·~O:III~~I.~~:I~~~ "f.h :~i~:"~~U"/,,~':,I.~r<lg;;:~:li"/i.: ~:::~~~ fo'rat;~J~c~;' oifl:;~::~I/~::k:~Jornd":.~~~ ~h'/;'~Pii'~itfJ"1~~:!~. aa".:~ l~i:7: •.y~l!·~r::I"u':/~ /~••%:y c!~,~i'::~':~PC':.td~:~fl:1ir;::1 ~~~Z

. ,1/0 Ih. phill'pp;n c I .I,,,,d•. b. a muclt lu,o.". mark., ,,' lor •. afltl' Jtllv 4. 191,0. b. co"liltll~,1 indrfilt,·ftllJ.

tI,. fu/"r~.

S"d. f"t-Irad. "laUo" .

bdlllu"

the ',ro coun,rie.

~hou ld.

thur-

PHILIPPINES In consideri ng this situation, the reiati\'e importance of the export trade of the Philippines to its total trade of Philippine exports is fifty (50) pCI'

centum of the value of the total production of

the Philippine;;. The destruction of an equal proportion of the expor t t l'nele of the United States wOllhl not have neady as disastrous an effect on the total t rade of the U ni ted States si mply because its dom<!stic trade forms such as very large 1'1'0pol-tion of that total trade. The Philippine Sugar Association lOi8he8 to impress upon the Committee the fact that, as the law now slal/ds, «bont GO ~'t> of the eX7Jort fmde of the PhiliptJillC8 1Vif{ be deN/royed, 1uith disastl'ollS economic, social (wd political. con8equences to the peol>[e of tile Phil'i7}pi1lcs. It is s ubmitted, th(wefore, that Philippine products should be accprded free access to the American mal'ket indcfinitel~. in at least the volume allowed such free ncc~ under the provisions of the Tydings-Mc Duffie law. As a quid pro quo the Philippines should arcorcl fr'!e ('utI'\' to Americ..an products, and should enga~C' to (-nact such tariff legislation as would be r~uil·p.ri to protect s\;.ch products in the Philippine mal·Yet. In connection with this pl'~posed concession fol' AmcriCAn goods in thc Philippi'te mar ket, the Committee is no doubt familiar w1th the importance of that mad:et for American gQods at t he present time. On t his point the United States Tariff Commis~ion, in its Report No. 118 on the United StatesPhilippine Tl'nde, refel'red to above, has the following to say: c

o~'?'~~rf!:!';r:ri'Ue:.~l~ln~~~IC,~';~~I~ i~I'1ga:. i~'~orr:ir~th~

l-:rund~

thntyenr bClnJl: VAlued At $52.5(;0,041. or 2,3 pertene

01 tl"" tol .,l uport<ld to nil cnuutri...... On ~ b~~i~ of Ihe United St.nt... l'or<:;ill" Com",e~t.1l nr,,1 N,,,,ignti~,,'" .o;.oup clo~ifiCO\tions

'~~rl~n~::~'r~:~,':; ~11"11,'~'I~~:Pt'~:is~~~!'..~l,rr.e~~~~c~~p~~:lofii~:~~~~

or "ni",ul nnd v"lcUthl" p'n,l"ol",. ,,:-cept fibcl'I! nlld wood (~'OUI" 00. O. I, ~nd 2 combined). of whieh tho~· I'''rchn.ocd th~ )'c!t.. T hC!;1l lol)(/s or .. ~(l",po~ed Inrgely

n~ bll)'er~

SI3,fHO.Do,; for

i!,,:il~~"~~!~~,t"~l~'Orr~.Wcl~dtl~~;.n'p\~:,3:~~~r· si]' iS~I~9~9 tI~! 18lnn(]. rnnk<:<1 de\·cnlh. Tho}, werll the I1ft"""th mos~ impO'!!"'t buyer of wood nnd p"per prodUCI1! (I;rO\l1' ·i). of which they p" rchn~<:<l 5 1.700.8012: Iho lwclrlh, of "o""'elollio melab (lI ro\lp iii, S(;,0J.!,637; Ihe ri",hlh. of ,,,,,Inl. ,,"d m"""rnct"rco CJ:ccpt ",nthin<lrr Dn(] ,·"hidco (~ roup (;), $ij.258.(;71): the ~,~~ te~"lh. of "'ne~'n,·.)" ,·"hie!"", (I!:roup 7), $9.360.707; the fourth. of rho""cnb Dn(] reloted pr,,(]uCIII (llroup 8), $4,787.9S-i; nnu U)I'cnth, of. !"L'.I'l"llnnc"". Ilrod"ct ~ (Jl:roup 1), $2.(;59,066. In 1036\ t,ht 1'1"hpplllco rn"k<:<l,"""t.nmonl!: the "~port m,.,.ket5 of Ih" Lrmed SI:" I('OI fnr ltIIt.·o",.,.. l Iron !,Ild "tcet !heeta, Cillnr-

",,<I

~tt~'mb;~n:1 ~"tl~~r o;:~...i~I~~";,rc:,~O~mi~:~o~;~:::~·; a:::S·Ii.~~

mnk<'d second for COlton cloth (eolored, blooched, <Iud unbleach_ ed), ".he.. ' flour. "nd ennn!!d Ii,h. .•The fl!llnwing trend~.nr~ di8te",ibll" from n" nnniysis of Ph,hppml" 'mport nn" Umt"d Stnlea export 8tat~.t ie/l; . "Ul The I'hHippin ll!l ~"m",l1y incroo.<:<1 Iho "Glut of th" .. p"reh"" .... fro;"" the .Unlll!d Sinh'. from the bcginniog Olf Am~ .. el\ n. OC~U"n~ln " IInt,i the en!i of 1920. Their purch """" Ih~h d~~hh ..d n"ul 103S .•O!!(! nit."" 1931. n"d ree<:<l!!d .Iightly

011 HIJii.

In ternu of their tothl

purcl"'!~.

fro",

~1I

oount.i"",

~':;I';!iil'Sr..iln: r:~~il~j,!"t:c;rr~~i,:~e :rnA~":~i~~.i~e~c~~;;'I!~~

through 1034, the ol"ore decl;";,,, .Ii!thlly lor 1935." (Note; Expl811111ion for li.e decline th". IIoltd Ii... in Ihe fllo~ th~t thcre "'no 1I declino in "'Rnr UIIOrll!d to th<l United Stilt"" due to quota li",;t"tiono froUl 1.275.250 .hor' l on~ ,·oh.<:<Id 565,453.(;21 ill UI3~. to 572.7~N .hon t on. " ul"e lit S32,91l1.5!l3 in 1935). "(2) Durinl( rec"n~ Ye:lnl. the Philippin"" hll"e become

:~to;::'~~ii~~g~~d '~'1,~~I~:ltcc~~ l~,~,,!~'inc~ ~::!~Cb':.t nt'~:!~ib~'J~ ~hC::',C Ro~~cr:::~innlli~ui~;C~:1 ~~ t ':i~~~t "::ci:I~':~!~C' !ht:S~:J:rr~

'ppines "0 lonlj:cr rank n" the cotton l<lslil"". '

Inrge.!1 buyer of UnitO"d Stat"!

It is obVious that with the loss of the American market for their products, t he pUrchasing power of the Filipino people will be correspondingly weakened and the Philil>pine market for American goods will tend to disappcar not. alone as a result thereof but also b~' the imposilion of duties on American goods. The Filipino people wilt necessal'ily turn to t he cheaper product.:; of Em'ope al1(1 nearby Oriental countl'ies to the extent they arc able to purchase at all. Therefore, the arrangement pl·oposed under this Pl'oposition will be of great mut\lal advanblge to the countl·ies. It wil l be limited on the part of the Philippines by the quantitative limitations of the T ydings-McDuffie law n.n d limited on the part of the United St.ates only by the pUrchasing power of the li'ilipino people. Under such an arrangement, the econemic struch:l'e of the Philippi nes will be such that the Filipino people could live and th~ Philippine government discharge its obligations. It is submitted that the adjUstment of Philippine-American trade I·elations u nder the terms of the TYdings-McDuffie law in such a way that the destruction of the Philippine economic structure will be avoided, will remedy one of the outstanding imperfection::! of that law, i. e., the destl·uction of 60% of the export tmde of the Philippines, and that such adjustment \IOns what the President of the United States had ill mind when he said, in recommending the passage of tllat law: " • • • Where

;mll~.f~~tion ~

(If

inc<t,,~lili~s cxi~t.

r <1m

f~'f~jl~~t<!ltl:~t ~~lof~ ~~~plci::~orreCICd nlt"r proper h~"'ing 3nd II

As a corolla ry of t h e foregoing, raw a nd refined s u gar produced in the Philippin es sh ou ld h ave IreI.' access to t h eAmeric3 n m a rket in at least th e amount pcrmined by the T ydings-McDuffie Law. because the United Sta res un quest ion a bl y fostered tbe d evelopment of.th e Philippin e sugar industry, and because of th e Imporlancc of tlmt indusrr~· in the export trode of the Philippines, The Committee has been fully advised as to the history of the development of the sugar industry in the Philippines. It is outlined in part on

THE COMMERCIAL & INDUSTRIAL MANUAL

pages 45 to 63 of Report No. 118 of the United States Tariff Commission on the United StatesPhilippine Trade, referred to above. The Payne-Aldrich Tariff Act of 1909 provided for t he free entry of sugar from the Philippines into the United States \lP to 300,000 tons. After 1913 there was no quantitative limit upon the amount of sugar entitled to free entry into t he United States from the Philippines. IHoreovcr, the development of t he industry was greatly encouraged by various American GovernorsGeneral during the period. The organization of the Philippine National Bank, and Joans t herefrom on liberal terms to construct sugal' centrals, as well as t he f inanci ng of Cl'OpS by that bank, demonstrate the encoUl'agement given t he industry by the Philippine government under American administrators. 'I'he follow ing is a table showing the number of tons of sugar exported, the value thereof, the percE'ntage that value bore 0 the value of total exports, as well a!l the percentage of total sugar exDorts which went to t.he United States from 1931 to 1934, the last year before the imposition of the quota system:

Totsl E :rporlJ y~,

Quallti ty Short Ton! 1931 L932 . 1933 .• 1934

Value

833.080 $-19.963.10:; 1.124.971 59.801,884 1,193.260 64,333.426 1.275.313 650451,580

Percentage Percentllge E:rported of Tota] Philippioe United E:rporu States

48 . 1% 62.7'70 60.8'7a 51).3%

99.92% 99.98% 99.99% 99.99%

This total shows, therefore, that of the total export trade of the Philippines in 1934, approximately 60 % was in sugar, and that practically all of that sugar went to the United States. In 1936 sugar exports to the United States amounted to $6 1,927,184 out of a total of sugar exports of $61,937,322, and this amounted to 45% of the value of all exports from the Ph ilippines. The decline in percentage of total exports was due in part to the imposition of the quota system. Of the importance of sugar in Philippine economy, the United States Tariff Commission has the followin~ to say, (Page 49, Report No. 118 of the United States Tariff Commission on United StatesPhilippine Trade) :

"Aeeordine: t o recent estima tes made by the Philippine SUllar Auoeintlon. nPjlro:ri mlllel y 15 percent of the total Phi!-

!f.1:~n3e~~:'cU~Dft~oe~~dci~~~:lho'!;':vcc~~~n"tri~ ~hD~:~I;.r f~~'!nUll;~~

vincc to rrovince. It is estimlllcd th,,! in the I'ro"iDces of . Ocddentn Neg ro! nnd PllmpanllB 00 p erc~nt of tho popu]]1.tion i~ dependont on tile growing lind millinll of 8U/lnr: ill the Provin ce of Tarlno. /JO percent: in the I'ro,·incC5 of BlltllngmB nnd Il oilo. 50 pt>rcent: "nd in Cehu, 10 perceo!. In IIddi t ion to those directly ena:nged in producing sugllt. n porlio ll of the pOpullllion in cllch provillee is indirectly del>endent on the industry: for example, thOle engaged in merelJondl,inll. trao~portntion, nnd the profen ion!. Thc governmcnt-ownl!d Manila Railrond. which tr,,'·craes the suga r regions

~nen~~'1~~~e~~~esa:,ffc~~:riB':dtetlr.e 4~r~~i~~i:l O!o~:r~'~;:"h~ r~ :eco;;v~de r~~II~i ~te"~~~~~e~l:"etr~~p'ported primBrii.y by tales

It. has been estimated that the taxes paid directly 01' indirectly by the sugar industry of the Philippines to t he Insular government exceed 400/0 of the ]'evenue of that government. As hn s b!!cn said, opinion is unanimous that the imposition of the full duty upon all Philippine sugar expor ts to the United States as provided in Sectioll 13 of the Tydings-McDuffie law is the death warrant of that industry, thus cutting off t he enti re source of livelihood of about two millions of the inhabitants of the Islands, and more than 40 0/" of the revenue of th~ Philippine government. It! may be argued that t he industry must reduce its costs to such an extent as to enable it to participate in the unprotected sugar markets of the world. There are sen.ral complete answers to this argument. One is that the unprotected sugar markets of the world are and probably will be fully occupied. Another is that such a radical reduction in costs of production would involve reducing wage scales to an impossible extent. The United States f08terecl the development 0/ the sRgar industry in the Philippines and thereby made possible a, higher le1,el of living among the Filipinn people (1) because of having established free access of Philippine sugar to the protected AmeJ"icnn market, thus enabling the payment of higher and non-competitive costs of production and (2) by thus making possible a higher level of living among tho~e dependent upon the Philippine sugar industry. Thc l!!:tabJishmcnt of this higher level of living has been one of the aims of the American admiuistration of the Philippines, I s that aim to be abandoned? Is it proposed and intended that the level of Jj\'iu[:" of the Filipino people shall sink to that prevailing prior to the American occupation? Mu.:;t sr.hool'l be abandoned, roads go into disrepair, and all the public services deteriorate and perhaps dissppear? Must all that has been done by America in the Philippines be undone?

PHILI PPINES T ... (' Philippine sugar industry therefore bl'lieves that it has sacrificed enough in having the annu al production reduced from 1,428,000 long tons of raw

ana refined su~ar t.o 800,000 long tons of raw and 50,000 long tons of refined sugar and asks that an adj>J~tment of the Tydings-McDuffie law be made in line with the first paragraph of this brief, so as to permit free access to the American market indefinitely of 800,000 long tons of Philippine raw and 50,OUO long tons of Philippine refined sugar. III

T h e graduated expor t t ll XCS upon Philippine s ugar, a s well as upon o th er Philippine exports to t he Uni ted States, Imposed u nde r t h e t erms of the T ydings-McDuffie Law duri ng t h e last five yea rs of t he Commo n wea l t~ p eriod for t h e purpose o f provid ing a sink in g fund for t h e paymen t of principal a nd interes t on the bond ed in d ebtedness of the Philippines. i ts provin c~s, municipali t ies a nd instru me ntalities, s hould be a bolis h ed . This proposition follows as a corollary u nder our f irst proposition for the reason therei n outlined. Furthennon~, as to sugar the imposition of the fi rst 6% expor t tax will eliminate many small produ('ers and with weh increase in the rate, of the tax more producers will he eiiminated . Unless protected by a quota system, pra('tically all producers will be eliminated b;<.' 194G. As a result of these developmer.is, the ('entmls, a great per centage of whose

crops depends upon small producers or growers, may be eliminated. It has been esti mated that the total cost of P hili ppine sugar delivered at United States Atlantic ports exceeds the cost of Cuban sugar by 0.80 cent per pound. This excess cost is offset by the present Cuban duty of 0.90 cent per pound, thus giving Philippine sugar an advantage in the American market of 0. 10 cents per pound. This advantage would be practically neutralized by the imposition of the export tax of 50/0 of the full American duty during the sixth year of the Commonwealth period as req u ired by the T ydings-McDuffie la w and thereafter P hilip pine sugar would be at a st~adilv increasing disadvantage over Cuban sugar in' that market by reason of the stepping u p of the tax required, by that law, and consequently would be dr iven out of th at market unless quota restrictions on Cuban importation s are maintained. The announced purpose of the graduated expUrL taxes imposed br the Tydings-McDuffie law is to PlIY r:>ff the bonded indebtedness of the Philippines during the Commonwealth period, If adequate sinking funds are maintained through ordinary appropriat:ons, or otherwise, s uch purpose would be accomplished without endangering any P hilippine industry. It is submitted that the graduated export taxes imposed by the Tydings-McDuffie Act should be repealed .. ,

THE ULTIMATE DECISION ' N T H E END the question of what is to be do,e with P hilippine-American relatio ns boils down to

what fina lly will be .:J.greedÂˇ u pon by P r esident Roosevelt and President Quezon as the heads of the two parties seeki ng an amicable agreeme,t.

P residE'nt Quezon and leading spokesmen of

Congress and of the Administration having broken ground for the conversations, we may expect that the mom concrete phase of the conference will soon swing into view,

The several declara-

tions of President Quezon in statements to tl e press nnd in speeches rlelivered before influential

Ameri('An groups have served the excellent purpcse of laying down ... arious proposals awaiting study and consideration, A MONG OTHER T R INGS, his references to the absurdity of our pr e!<ent relatio ns, the a n omaly in tl lC status of the Commonwealth, the feasibility â&#x20AC;˘ " B eI"1lLd", MllrQb 16tb. 11137, Editorial.

in an extra-official way the

of independence before 1946 supported by a commercial treaty, the fact that independence need not mE'sn the discontinuance of P hilippine-American cooperation, and the success so fa r of the Commonwealth Government-all these had the salutary ef ....

THE COMMERCIAL & INDUSTRIAL MANUAL

feet of presenting the main features of the PhilippillC situation in a manncl' that could not be overlooked. ..ik'

val'ious American gl·OUpS, there is one aspect of his admini"tration that we should not neglect to con· sider.

On the other hand, the organ ized opposition to Philippine interests on the part of the American farm, sugar and labor blocs, whi ch was expected, and the conciliatory lIttitude adopted by both the Sayre Committee of the Department of State and by Senator Tydil1 g~, chairman of the Senate committee on insular affairs, and Congressman Kocinlkow;:ki, chairman of the corresponding House committee, had the effect of presenting two divergent vHsions of the American attitude: the onc militantly hostile, and the other hopefully s tatesmanlike.

President Roosevelt is deeply aware of the popular basis of his p ower. Elected by a majority without precedent in American history, and at present confronted with the tremendous problem of winning popular support for his program of judicial l·cIonn, he cannot, he dare not, enter into any agreement that might be co nstrued by his enemies a s a betrayal of the American people. While the return of prosperity tends indeed to soften t h e bitterness o f anti-foreign propaganda (no less than are"pons ible official of the Department of State insists that we must be treated "l ike any other foreign country"), and to moderate sen timents of selfish nationalism, America is today in no position to relax such measures :\s it m ight thi nk necessary to hf'st(' n the return of plenty.

At t.his stage of the negotiation!!, then, any prediction of the poss1~le outcome of t he conference will ha\'e to be based upon the known personality and record of Pres ide n ~, Roosevelt and President Quezon. Since res!)onsible sources willingl~' allow that :lny decision will depend ultimately on what these two :nen agree upon, it ~ollows thnt the terms of the agreement will IJrobably be based on the extent at which there is a meeting of minds between the two. Neithcr President Quczon nor P)·esident Roosehas c0ll1111iLted himself definitely to a ny specific proposal. Despite the various declarations already made by the fOrlner, he cannot be said to h ave made any outright commitment. He has merely presentcd the situation to thl'! American people and their It'uders; and while he has expressed his ren<iincs!l to accept a proposal for an carlier g rant of indcpC'ndence, he has wisely conditioned his s tatement upon the conclusion of a commercial agreement with the United States th at wili permit the Ph ilippines to live in moderate prosperity, \,(.;]t

President Roosevelt, of course, has sniel nothing of a nabu·e that might indicate the general drift of hi s polky. AI! we know so fa\" of his attitude is the now well-known promise with which he accompanied his signature on the Tydings-McDuffie Act. While that promil'e bespeaks a desire for fair play, and wh ile we have every l·eason to believe that he will not be easily tempted by the importunate demll. nd!l of special interest!l to sacrifice Philippine economy to remedy the exaggerated difficulties of

Pl'esident Roosevelt, therefore, may not utterly 'li!lregard the propaganda of special interests. While undoubtedly he has sufficient stre ngth of character to withstantl such propaganda, he might be compelled either to dilly-dally fOI· a w h ile or t o lean a little backWRrd against Philippine interests. He h as every reason to court the good will of the American peo1Jle an(1 none, fol' the time being at least, to defy them. President Roosevelt is known as a "Big NaV!)'" mnn. There is little chance that, duri ng his admisni!ltmtion at least, he will consent to call the American lOI·ces in the Orient back home. While his s ponsol·.<;hip of the Pan American peace pact does mea n that he is inclined to keep the United States at home and to insure its p redominance in its own hemisphere, it by no means signifies at the same time t hat he will want the United States to retire from thf' affairs of Asia as completely as it has retit·e{l f l'om the affairs of Europe. The United State!l is a natural protagonist in the drama of the Pacific in a sense in which it cannot J:.e a protagonist in t he Emopean drama. Hence, the long view of American participation in this Oriental drama will inevitably include the Philippine question whose final solution must fit into America's conception of its histori c role.

PHILIPPINES

WHAT HAVE AMERICAN INVE STMEN TS CONTRIBUTED TO PHILIPPINE PROGRESS? * HILE DISCUSSING this subject, Amcl'irnn investments must be considered under two clags ificntions (1) Investments by AJllCl'ican residents in the United States in Philippine

W Bonds,

Secul'ities, and (2) lnvestm;nts 01 American l'csidcnts permanently residing in

P h ilippines.

th~

The Bureau of Insular Affairs in Washington, D. C., is reported to

have estimated the Aml;l'ican hold ings of Philippine Bonds ( P ublic Impl'ovcmcnt Bonds, i\lanila Railroad purchns\' Bonds, Irrigation and pCl'man(!I)t Public Works Manila Sawel' and Watenvorks Bonds and Provincial Bonds) at apPl'o:.imately $114,OvO.OO

some two 01' three years ago, so undel' the first classification it ms:.y be safel y sa id that it is largely as a result of the funds renlized from t he sale of its securities to Americans in the United States that have enabled the Philippines to inaugurate and extend nlany new public improvements that have proved to be such pOWerful factors in the development and Jlrogress of the Philippines. UNDER the second classification, the direct invcstments of Americah rcside nts in the Philippines were estimated by t he BUrea\1 of Insu lar Affairs to be approximately $l~O,OOO,OOO.OOO under the following headings: ~fR"ufno(u,in~ I "d".(,i~ •

:\frtC"Dtil~ 1~.,,,bli~ hme"t 5_

.,.

j"","t): ::. ,\,r,oult"rll ... ,- ___ . . . . . . . . . . . . Hem.1 };~t"tc ("(It juclmH"J( "i:,ieult,,;,;1

l'oreal ""d L"mb~ri,,~ .

Other

Fi~l<b

Co ••

1'350414.000.00 :10" 187.000.00 12,10.1,000.00 10.GIG,000.00

G,SOO.OOO.OQ

1'96. 181,000,00 48,635,000.00 1'113,806,000.00

While the above investments mav not have uctually started new industries in the full sense of the word, in practically all cases they were the moving spirit in modernizing them and so became the g uide and leader for local capital to d:ollow. it was the Amedcan inve!ltor who took a cha nce and led the way to improve quality in Philippine products, with a consequent higher price, by installing model'n up-to-dute machinel'.y to replace the antiqunted hand methods an'd old worn out machinery which wcre in the Ui':e before the Amel'ican investol' entere(\ the f ield. One of the most outstanding examples of the benefits from American investments, is the amazing deve!opnlent of the coconut oil industry. Prior to 1\)13 the expor~s of coconut oil were negligible, Imt in H)35 the expo"fts amounted to 165194373 kilos, with a value of 1124,509,162.00. A'S s~me .1,000,000 people depend on the cocomlt industry,

according to a statement compiled by the Department of Agl'iculture and Commerce published in the Sunday T ribU1le of ill arch 4, 1934, i~ must be tak('n for granted that. a large per cent of these 1.000,000 people have been and still are being benefited by the Amel'ican investment in the eoconut oil indui'tt'y. American investments financed the Manila Electric Company, which has given to Manila and its s uburbs modem up-to-date street railway and lighting system!'. An:erican Cnl)ital reorganized the old, out-of-date telepho ne system and gave to the Philippines its present high gnl.de local and long distance service, It was Amedcan capital that built the first of the modem sugar mills and by so doi ng demonstrated the possibilities in this field that many others followed suit, until it now p r ovides employment fOl' millions of Filipinos, and eve t'r year brings millions of pesos of new money into the I slands from outside sources. Americnn capital and enterpri se were the first to venture into and develop the mining industry on n large scale, and in spite of set backs and discou mgement, kept on un til today gold alone is pu t· ting into circulation in the Philippines millions of J)I:SOS each ,yenl', and bids fail' to make the Islands one of the great gold Jlroducing coulltt'ies of the world. American investors pioneered in t he fil'st largE !lhoe factories in the P hilippines and gave such en· cou ragement to others that the shoe and Sli PI)er industries have grown enormously and now give ,m1llloyment to thousalld~ of Filipinos.

THE COMMERCIAL & INDUSTRIAL MANUAL

Also mention may be made of the petroleum products companies with their distributing station~ all over the Islands. The first modern Inter·I sland steamer (8. S. .M&YIJn) was brought here by American capital. The first of the large, modern office buildings were filumced by American capital and set such a g(lod exnmple that Manila now has mnny. both pub· Jic ann private, that would be a credit to any city. There arc many other instances where Arne ienn investments have conh'ibuted greatly to the benefit and pl'I)grcss of the Philippines, which lack of space in an article of this nnture prohibit~ naming, but onc important point should always be kept in mind in dealing with this subject, i.e., that

American capital bas invariably employed Filipinos at good wages whet'ever possible, has always worked for the general welfare of the community as a whole. It is mo~t gratifying to the American~ and augurs well for the progress and future of the .Philippines that of late years the Filipinos have cast off their former lethargy and are today forging forward in every line of endeavor, so that in future all development will go hand in hand with Americuns for the benefit of all. No doubt the Chamber of Commerce of the Philippines has been the cornerstone of this happy change and its new and beautiful building will be a stimulant to further useful and progressive action. Let the accomplishments of the past be OUI' guidance for the future .

FRENCH INVESTMENTS IN THE PHILIPPINES· o

COMPILATION hali apparently ever been !nade to show the extent of French investments in the Philippine ~slands, but from my ('wn knowledge I can state almost with certainty that the amount of money from French source invested both in trade and in business associations in the Philippines is not small. Quite a number of partnerships and corporations doing business in the Isla nds are working on a purely French capital, and have been contributing in a great m(·nsure to the Government budget with the taxes provided by the Philippine laws.

THE PUBLIC ACTS latel~' passed by the National Assembly bearing on foreign relations have however, restrained foreign capital to certain extent while in the past no means of inducement was spared to bring it in to help develop the business trade of the Philippines as well as the welfare of the Government. No country is known to have ever driven away foreign capital realizing that bona fide merchants established in a foreign market and working on their own capital instead of being a burden they become co-supporters of the state sheltering them whereas such merchants have to abide by all the laws of the country relating to payment of taxes and customs tariff. In other words, such foreign merchants are always welcome in other parts of the world. There can be no question that the larger the foreign .. nil l.,&opo,.oo 0/ th. PMlipp,·nu.

K~u ....

I'u.idenl. FTench Ch"m"., of Comm.TU

capital is in a given locality the larger will be the business trade in such locality. It may be said that under the able management of the President of the Philippine Commonwealth brighter days of prosperity for the Islands are not far away. While we al'e just at the part of the journey instead of being discouraged we should look towards the future of the Philippines with confidence. The attainment of a complete success makes it advisable, therefore, to adopt the policy of open door fOI' all foreign capitals to promote our h'ade and our industries. We have unlimited extension of fertile and uncultivated lands remaining idle and which would pel'mit the diversification of cultivation to be a great relief to the existing condition of ou[' financial resources.

PHILIPPINES

CHINESE INVESTMENTS AND THE COMMONWEALTH * ROGRESS of the Philippines is intricately linl:ed with the industry and frugality of the Chinese

nationals in the Philippines. It is, t h l;Tefore, beyond question, that Chinese cOI).tribution shou ld necessarily be associated with tbl: future of the Commonwealth and the nation. At the present writing, the Chinese investments in Philippines total morc than two hundred million pesos. They rank first among f jreign investors in r onl estate business. In the lumber industry, they arc only surpassed b~' the Americans. In bnnlling, they a r c only second '.0 the Briti !lh who control 56 per cen t of all the b :tnking investments in the islands. In the domestic tmde, the Ch inese nationals control almost 60 per cent. They are also important element in the distillery industry, shoe-making, tnnnel'Y, soap and margarine manufacture, confectionery, candle-making and cigarette manufacturing.

THE CH INESE, in the words of the present Director of Commerce, have become a cogent purt and parcel of the sys,tem governing Filipino life. They have permeated every branch of economic living carried on by the Filipino people. Their hold is a recognized factor. There is a prevailing conception among the uninformed that the Chinese r iches in the Philippines do not stay in the islands but are brought across the China Sea to their native land. This is completely without foundation of fact. For there is a very negligible number who come to the P hilippines who go back to their native land and stay there forever. The fact is that they come to the Philippines and here they make their home and here they settle forever. The Chinese investments in the Philippines are a benefit to all concerned. One of their major contribl1tions is the development of t he Philippine commerce. Through their well organized chain of distribution they serve the people, and they are a living example for the natives to emulate. Inst ead of a competitor, the Filipinos have in the Chinese a practical teacher in the part of successful living. It is historically conceded that without the Chinef<c the Philippines would not have been in the present stage of development and progress. It can also be safely assumed that the Chinese in the Philippill(>s are still going to playa very important role in the future of this country. They are the found ers of the Filinino economy and, shoulder to shoul der with the natives, they are a nd they will continue helping in the progress of this nation. BJI

C~<lmb ••

. \LP"I"1I0 RTCIP.

0/ Co""nu ••.

P rt~ide ~l, P hil;pp,~c Chi" ••• G~""<ll

The Philipp ines is their second country. For many of them it is their adopted country. A great many of them consider themselves a Filipino beca~,;e everything thy have is here in the P hilippines. The only big drawback of this beautiful association is that, notwithstanding their sincerity of purpose, here they are considered aliens. But they will go on toiling and hoping fOl- a better day. CHINF.SE I NFLUENCE

Chines(:: merchants a.nd traders are today widely scattered in Southern Mindanao and Sulu. There is scarcely a town in the region in which the Chinese influence is not felt thei r colonies being larger in the principal trading centers, such as Jolo, Zamboanga, Dipoiog, Davao and Cotabllto. Principally all the Chinese a r c engaged in commercial and industrial enterprises, but seldom in agr icultural lines. There are a few Chinese laborers in Cotabato, engaged in the rice mills, a nd Chinese own considerable real estate as well as agricultural land. They control about 90 '10 of the !'ice milling industry in Cotabato Province, as well as 90 % of the r etail trade and 80 '10 of the transportation business in the same province. tn Zamboanga, the Chinese have a practical monopoly ovcr thc salt industry, and control 60 % of the retail trade of the province. I n the Sulu Archipelago, they also control the driedfish industry, the copra, hemp, and pearl-shell industry, and have also a practical monopoly of the retail trade. I n Davao, alone, where the J apanese predominate, is the only locality where Chinese thrift has not penetl·ated.

T HE COMMERCIAL & INDUSTRI AL MANUAL

THE JAPANESE INFLUENCE AND THE COMMONWEALTH HE JAPANESE are the lates t fOl'c:gnc r s to sr.ttle in this region.

At the beginning of 1936,

there were reported 13,064 Japanese in Dn vae, engaged ill the economic development of

the province. In the foul' provinces of Zamboanga, Sulu, Cotabato and Davao tht!l'c arc r eported to be a total Japanese population of 13,4{)9 in 1935, engaged most ly in fa r m路 ingo, merchandising and finishing. T h ~ coming of the Japanese to Davao was la r gely a ma tter of accident. A group of }\)ung .Tapanese lahol"ers, numbering about one hunmed, was being engaged in road constructibn work in the suh-province of Benguet in 1904. It was there where th ey first listened to stories about the rich, undeveloped province of Davao. When thei r employment in the Beng uet road work was terminated, t hey decided to come to the south. THE LEADER of this group wa s K. S. Ohta, who was at the time employed a s a road foreman in Benguet. A gr'llduate fl'om a severa l commerce in Japan, he k~w how to speak the English language. He had come from t he per fecture of Hyogo, forty Illiles no1"l:' l\yest of Kobe. La nding in ]\"I anib at the age of abo"ut 20 years, he had no difficulty in securing employment as a laborer foreman in the Benguet road WO\ 'k. When work was done ill Seng-uet, K. Ohta Ie<\. his men to Davao

in 1904. Th.::l'c he imm:!dia teiy npplied himself and his men to the difficult task of pion eering in the w il d outlying sections of the present town of Davao. H is efforts were soon I'egarded with success. And on May 3, 1907, establi shed the largest Japanese corporation in Davao at present. In the Japanese community of Mintal, th~re stands today a monument built il~ honor of this great Japanese I)ioneer with the following inscription: "K. S. Oltta 1UltO believed il1

DavaQ

(ll!d

helped it to grow-1876-1917."

PUBLIC W ELF,j\RE WORK IN THE PHILIPPINES 路

UH LIC WELFAHE work which mea ns in its limited sense the p!'omotion and conservation of health and social welfare of the general masses, has already received close attention in the pas.t, It has been undertaken either by government. entities or by institutions run by pr ivate initiative but canying government recognition, These institutions, through proper legislation, undertake activities which al'e either national or local in character. Among the public enLities may be melll-ioned the Bureau of H ealth, the Burea u of Quttmntine Service, the Phil ippi ne General Hospital, and the Bureau of Public Welfare. Among the semi-public and pri vr.tc! or~anizations, we have the Phili ppine Anti- tuberculosis Society, t he Philippine Center of the -\merican Red CI'OSS, the National Federation of r路!omen's Clubs, the Association, and different Chal'!tnble organiza tions under the Catholic Church . Besides these we have such entities as the- Depat路tment oj Labor, the D ~pllrtl1lenb of Agriculturc and Comm(:l"ce, the Boy Scouts, t he Rotary Club, and numel'OllS welfare agencies that Conry on some ph ase of social '."/clfare work. WE i\lAY BR IEFLY RECALL here some of the most impor tant activities that have been undertaker. in the past, ;\~ the wOI'k on maternal nnd child hygiene thru puel"icultu l"e centers all over the Tslands, the control of comnH!nicable di~cases by

* 1111

e'h"ri'i~~ .

:'THII. A~u:<C l o:< .\ . Po:".:~. Hr;~",,'it:t Secrr''''/I. ,1 u"c i~l.d

immunization and rigid segregation, the establishment of hospitals, dispensaries, leprosarin and tu berculosis sana tori a, institutional care of the helpless child and r eformation of t he wapvard children, and the disaster r elief measures. Lastly was the creation of nn unemployment committee which had been supel"~eded by the National Relief Boanl.

PHILIPP INES The Recto-Quirino Bill which was enacted into lnw, appropriating PI ,OOO,OOO for t he colonization of !II indunno was first intended to pr ovide new homes 3nd new sources of livelihood for those unemployed people crowding specially in Manila, but after it was realized that the amount was quite inadequate

to carry out the plan, said appropriation was converted into the building and improvement of roads nnd transportation facilities in those parts of the South in order to safegua rd the \VellUI'C of the people and to advance the economic progress of that part of the Islands.

SCIENCE FOR THE NEW COMMONWEALTH '

UCCESSFUL GUIDANC E of the changes in thl' new life of the Philippines is the chief need of the hOUI" A scientific account of the variou!: a spects of our lift! would help us discovel' how this gu idance should be made, We need strcngth to achicvc control of a situation that involves both slliritual and matel'ial turmoil. We should have cO!ifidence in OUI' abilities by underst.."Inciing our own powers, Dudng the era of stability, when OUI' products have a ssurcd m~I'k et, we find it easy to mam\ge our affairs, need not resort to self-analysis

Lut simply devote ourselves to the accomplishment of objective duties, But when ever)' little step that we take hangs in the balance we must take ourselves ill retrospect, ur.derstand OUI' limitations,

that with mind a nd wil1" singled to the one purpo se of following the path to the goal of our national (xistence, we may set out with the grim determinatiun to fight until the end of the journey, WE TALK ABOUT ELANNING, We undoubtedly mean scientific pIa ning of 0111' national life, The methods of science, we say we are convinced, Ill'(! the safest to follow, But th(! benefits that science has given the wOl'lc\ arc now commonplace, we take for granted, and many of us talk of science as if we only undcrstood its aims superficially, Science is experimental and objective, Yet many of us are not interested in eXlleriments to ~et a dircct r epl y from natUl'e, more t han we at'e in broadcasting our ideas and in rcceiving popular acclaim and crcdit for conceiving them regardless a s to whllt Jlaturc herself has to say about them, SOLVING ECONOMIC PnOBLE:\IS FROM fJ'HE

SWIVEL CHAIR Indu strinl devclollment in thl' Philippinel< has bcen characterized b~- extreme conservatism both nn the part of local capital and those responsible for the promotion of new industries, Two schools of thought have come O~lt, One belicves that a side from indusLI'ies that wcre developed under the aegis of free tl'fldc there are no others which could successfully be established within a rcasonable period with local capital and ol'ganzntioll, The other clnims that with Ill'oper Governmental encourage111('nt, we should be able to develop malty indu stries :lInong a list of those which produce articles im-11/1 ~1,,)lUr.L Iâ&#x20AC;˘. It('K.'~, C~airmo", .vo/lo'ml rr,u<lr~h C""nc,"/

pO I'led from other countries , Both schools are effusion s from the swivel chair. THE METHOD OF SCIENCE From a purely inductive l'easolling, it is impossible to obtain with any degree of reliability an :lnSWC1' to the question as to whether or not this country would be able to establish within a short period new industries that should s upply the local demand of t hose articles of prime Jlecessity now being imported in respectable quantities, Science offern a reliable method, [t goes on the principle that the proof of the puddillg is in the eating, Science leaves it to nature to g ive thc answer, By establishing the industries on expel'imcntal sr!Jni ('ommercial scale onc gets \lIlequivoca l dictum, This has ail'elldy been done in the ca ses of a few industries, such as 100.1 pa('kil'.'g. bottle nl~\king, and a few othcl's, and the ready respouse l'cceived from local capill.11 once the q uestion ha s been answered in a pl'actical wa~:, is an added vindication of thl! method, " The mcthods of Science are founded on "bSel'V;ltioll and expel'iments guidcd by reason aJ1(~ wi sdol11 Ilnd justified by sllccess," SOIENCE AND P OLITI CS

Just as sentiment and business do not mb:, s( science and ])olitics nrc oil and wulel', Take for instance methods of fighting locust, A politicilm wants the money mor(! to provide jobs b those who

THE COMMERCI AL & INDUSTRIAL MANUAL

helped him win his post rather than to apply the methods that would extel'minate the pest in an eff icient manner, based on knowledge of the insect's life, which would not give him frce hand in providing jobs to his henchmen. "";onflict arises, the politi . cian has his way and the locust multiplies. Political expediency is poison to scientific methods. It may be a necessary evil in a democracy, but where weigthy interests of the people arc involved it must not be allowed to interfere with the scientific approach. For this reason our scientific institution should be kept removed from the destructive influence of politics. SOME IMPORTANT NATIONAL PROBLEMS

011 the eve of an indcptmdent existence we should take stock of important national problems A cneful driver before starting on a journey, examines the fuci and oil supply. Even so, let us examine how the human component of our Com~ monwealth machine is fueled and oiled. How well 01' how badly the different ~TOUpS of our people are fed is a vital problem. High infant mortality, high susceptibility to tuberculosis, high incidence of de

ficiency diseases like beri~beri, tell us that certain important groups of our population are suffering from malnutrition. In a very important publication of the League of Nations, accounts are given of studies made oj cel·tain groups of the population of member nations of the League and the astounding fact was revealed that even in the most prosperous and civilized nations important groups are suffering from the effects of malnutrition. The world paradox is ob· served that whereas overproduction is rampant in certain sectors and in certain products, under~ production, resulting in underfed groups, is the order of the day in others. ". Fifteen millions underfed in Britain, twenty~five to thirty millions in the United St.::l.te5! An inquiry in the United Kingdom has shown that in a group of poor fam~ ilies 47 per cent of the children are undersized and under weight, as compared with 5 per cent in well· to~do families, and infant mortality in the second group is only half as high as in the poorer grouplargely on account of nutrition. If this is the case in these relatively advanced countries, what is the position elsewhere? . . ."

THE ARMY' PAR T IN THE ECONOMIC DEVELOPMENT OF nIB PHILIPPINES *

ITAL TO the security of a people is the (iefense of a nation and material to their happiness is the estabilization of a country's resources. Without adequate protection there can b~ no security and without economic stability there can be no defense. It is therefore no accident that in the organization of the Phili ppine Army, the establishment of vocational centers mainly in agriculture in everyone of the 128 training cadres is considered a pro~ blem of major cO!l s id e l'~tion. The preparation of men for mil,ital'Y purposes is purely me~ chanica!. Modern means and weapons tend to sim tllify tactics to mathematical exactness. Hudiments of Military Science can be acquired by men of avel'age intelligence.

THE FfLIPINO SOLDIERS furthermore, do not suffer by comparison with the soldiers of any nation in so iar valor and fighting qualities are concerned. No one ever doubted the courage of OUI' men under fire. Pool'ly trained and meagerly supplied, they gave a hel'oic account of themselves before s uperior forces of both Spanairds and Amel'~ icans. With the ba sic facilitie s at our command and

• B /I Philippi u

"'M Oll

,I,m y.

G';NE nA"

PA U LINO

S "XTOi.

Clo i(/

Siaff.

the able guidance of one of the grt:!at.est living military g-eniuses, what limitations could there bt:! in the possibilities open to our peoplt:! to develop adequate protection? But far more important in our welfare considering the fact that only a small percentage of the trainees could be assimilated in the Regular AJ'm~f, is, the enunciation of policies that will fit them in the peculiar circumstances of our economic scheme so that when they go back to their homes at the t:!nd of 5J~ months, they will constitute distinct

PHILIPPINES assets to their communities and to the nation. One of the main objects of the National Defense Act is to make good citizens of these trainees. The introduction of vocational training was conceived in consonance with tbis objective. It looms big and pretentious, but it can be done and we are going to do it. The capacity of our government to allo路 cate money for military purposes is limited. Thirty centavos per day is all that it could ill afford to give each trainee. That ration would hardly keep body and soul together, but assuming the responsibility and taking the initiative, the Philippine Army through the various training camps, proIloses to supplement the government's limited allowance by initiating in each some useful vocational practices mainly in diversified agriculture calcuhated and designed to ameliorate this condition. Such callings as blacksmithing, carpentry, sho(!-repairing, and other subsidiary occupations will likewise be intrvduced in these camps as the demand for them aris(! and as facilities b<!Come available. This program has the fearty approval of our great Presid:::nt and the Military Adviser, and it is to the credit of the Org:mization that all leaders of thought with whom I have openly discussed these matters indorsed them without reservation. It is pioneering work in a nation wide scale-something that has never been done before and it is all the more reason why we should give this phase of our work our best efforts. We are leaving no stone unturned to consummate this project because we are fully convinced that it is essential to the life blood of the Army and to development 01 a great nation. Every cadre COMmander and every officer in the Army is committed to support the undert-aking and I see no r eason why it should not succeed. Even now, economic and social problems are taking precedence in OUI' public opinion over political and partisan conflicts, Thel'e can be no doub' that the maSllCS are rcaeEly rallying to support this colossal work and the.y merit the highest commendation for their response. When approximately 150,000 young men of 20 years of age registered in the different registration centers throughout .the Islands, a figure that far exceeded the most san. guine expectations of our leaders, there can be no doubt that our people are determined to shoulder the responsibilities of complete independence. Orchards, truck gal'dening, poultry, hog raising lind other agricultural pursuits ar(! to be introduced

wherever conditions warrant their development. It would be one of the greatest contributions of the Army to be able to teach these young men useful vocational practices which in due time will yield them the table necessities that our government can not give, The savings in money t.hrough these economies cannot be over evaluated but far greater and more important than these monetary gains are the acquisition of useful vocations and formation 'l.nd adoption of clean habits that would in the long run be conducive to their health and happiness, Another ameliorating circumstance which should be welcome by all classes is the policy 01 the Army to patronize local made products wherever and whenever possible, giving impetus to native industries and benefiting our laborers. During the first year commencing from January to December, 1936, the government actually saved approximately Pl,OOO,OOO through requisitions of supplies that are furnished by local manufacturers, Native made shoes, beds, mosquito nets, mosquito bars, hats, blankets, puttees, belts and haversacks were given preference over imported articles with the result that thousands found employment and many more thousands received the benefits of their wages. We are presenting no elaborate theory. In fact this is predicated by experience, What has been done in Bilibid Prisons among men who are in a sense social misfits can certainly be worked out with better r esults among young men whose way~ are still plastic and whose characters are certainly more amenable to improvement, Right now, all through the length and breadth of these Islands, in everyone of the 128 training cadres, an epic chapter in our history is being written and I am confident that in less than ten years this objective will be attained, CHARACTER OF OUR NATIONAL DEFENSE SYSTEM

The cardinal aim of our national defense Dolicy is actnal security of the Philippines from internal hostile elements and from foreign aggression, Our progranl of national defense, when fully executed, shall bz a notice to the world that the actual con路 quest of the Philippines can not be accomplished without totally destroying the country and its peo路 pIe, and that this destruction will involve the aggressor in staggering cost, both in human life and money, that even the most imperiulistic nation will hesitate and seriously consider the consequences be-

THE COMMERCIAL & INDUSTRIAL MANUAL

fore embarking on an overseas expedition of con-

que!>t. "The existence of an adequate defem=.( for the Philippines," said Presiden t Quezon in his letter of Now:mbcl' 19, 1934, to the Secretary of war of the United States, "will be a powerful influence in preserving peace, since even should international treaties for t he neutralization of the Islands be CO:lsummated, pronounced weakness will encourage disorder and invite aggression. Obviously, the lIew nation's Illilitar~' policy, both by inclination <lnd compll\sion, will be pUl'ely defensive, but its defenses lllust command respect." SU!I,I!HARY O~' PROGRE:: SS

The enactment of the National Defense Act marked the first real step in providing secudty under Filipino leadership. The President of thE Philippines promptly assumed command of the Army in appropriate orders, and the wod, of higher o)'ganizution began. A temporary Army Head· quarters was established, hll'gely by the conversion of Constabulary facilities, and a skeletonized administrative fmmework was ~aced in operation. ".

Co", "w,,,1 . 11111 81\0' .'>/1$/,.,11

"The Chief of S("IJ orgnnized "n A~I II)' ]le"d (lu"r!er~ whid, i~ ,li"ided ioto twO lUoin l)urt 9, The first 01 .heae i~:\ body of ol!icer~

h.~~'1:h d~'!l~:i~~ ~~,r;;~ffe~~I;'"Ct:~~:C~~'1~'l401n~~~"I: h~hc~l~rd~C;' s';~N

in the

p~rfor"'8nce of

his vnried and

i",poTt.~nt duties,

1n the iote-

pC:::o~Q~lo~:?:i:\~~tr~IIl:~~C~~YQtnhee X~~Ef!~eChf:t~y'~itOllnff~o~~i'i~~

telJigence w,th Ope,rlltioos IlIld Tmininlt uoder a second. The Wllr 1'11l0! GrOlll' eon,lItul... a third di,·i.ion. while no "ddit;o"nl di,;the Office of the P,o"on "lIIrshnl Cener"l, Wll5 gel up for the supe"'i~ion of nl! ioternAl police r c;Jpon.,bilitiCII 'U1U for dealin!!; wilh ",,,tters pcrtllinin!: to regiStroHioll "nd induction of "nnll,,1 eontlngcntl of trsincC9."

~ioo. de!igQ~ted

the

;:~~~\e ~~~~;ldOr~!~~~~~~·~~~~.:ifc~~,:!5,~I~i~~~~i~::r,~~3"~~~~~

~crvicC9. IImong which arc thc Ordn~ncc Service.

mnster Sen'icc, tho Sen·icc.

1'I1cdic~1

Sen'ico lind Iho

~he

QII'lrtei-

,\lIjlltllnt-Oehem! '~

b. Pro ~idi"O A" 06icer COtl" "An efficient offi ce r corp. of ,/(lc,tnute ';%0 ,8

;nd,~pen~"blc

:i~!r;1 ~r~1 ~I~:~~i::i;i,)"~~,;r~~'fr;:"~'e~ren~~,rl?~ f~t;ei,~~':t,~>';f"~,~~e g~i y~= i,~~'dl~~'~~y ,~~~.I'~rl'i1\ ;t~~i~II~\~n~)~~'CIl8~~'il:~;~ ~~'~\:;~~~ ~~~~~~ ~kiW~I'rr~"f:;:;I,~::t~'t~~i~!d"~~di~~':;l:~~<yl~J,:~ni'WCllli~i~~u:h~~

fUllda"'enlll!~, .he Ohief of St,,1f i",,,,cdi/llely look 8\O ,>B to trllin the Officrr C'orl>~. "AB" IIlIdell~ of the officer cl>rp~ ollhe J'hilippine Army. there "'Il~ initiblly ,,,·,,,I,,hle the oommi8_ionoll personnel of th e former Co~,~t"blll"ry. In "dd'lion there "'ero' then eOll""ill$ionod in the Pluhppinc Seout otgllnizalioll of Ihe Uniled SllItes Army 26 Fili-

~~OOj;;li~>~~~8c C~~~:::i~~t~~~11 ~,;o R~~~J~ dlii~~~' i~~~1'C"8~r?c~i~~~~~~

,,\,u'Y. Fro", thellc three ~OI rrC~ it w,,~ ob";ou$ly ncoC8S'''}, to ~elcol tho 0.:",,,( proponio" of the indi\'idu"l~ who s hould constitute. ",i(bUy. d,e He!,:"I"r Ofli cer3 of the l'hilil>pine ,,"no},, n5 well:l3 the nu<'ie,," of Ihe n ""cr\'c Conti ngrnt ,"

Constabulary officers, being already in the <;el'vice of the Philippine Government, wel'e incol'pOI'ated by law in the new organization. Contacl was established with the Filipino officers of the

SCOUlS with a view of determining their desire to vohmteer for sel'vice in the Philippine Army. Some of them have already transferred to the Philippine Army. Likewise, a study was made of all the militar,y records of Filipinos commissioned in the United States Reserve Corps. The President then promptly approved a comprehensive plan for a permanent orga nization, including the appointment and assignment of general officers to Army Headquarters. All of the individuals who constituted t he slate of original appointments were selected only after exhaustive examination of qualifications. Conti nuously increasing throughout the Army is expected t.o be the r esult of their services. Initial appointments and assignments are alI'eady being made wit.h a view of placing every individual in the exact relative station he will thereafter occupy. Upon the relatively few regular officers in the Philippine Army rest heavy responsibilities because they constitute the fountain·head of professional instruction lind leadership for the whole officers. These rnU!lt become thoroughly conver sant with principles of tactics and stmtegy, appropriate program~1 for assuring sound and economical adminisJration, and programs for thorough and com· prehensive training. They must indoctrinate thE entire Army with these principles and methods and by precept and example inspire t'v~ whole to that unified effort which alone can produce maximum effectiveness in a crisis. The official of the old Constabulary arc wellqualified as so character. basic educat ion and exemplary devotion to duty. In the methods and practices a l)plying to Constabulary activities and field duties of very small units, they are professionally able. But scarcely any of them have been experienced in the more difficult and intricate phase of military organization, tm ining, sup ply and leadership. Special training features will, therefore, denl principally with the preparation of officcrs to dischal'ge their important duties. Upon the personal request of Field i\larshal MacArthtll', the American Chief of Staff has extended spccial opportunity for advanced militan' education to six officers of the Philippine Scouts who have indicated an intention of transferrin)! to t.he Philippine Army in the reasonably p r oximate futUre. SI)ecifically; the American Chief of Staff has authorized six of these officer s to attend the Command and General Staff School at Fort Lea\'en-

PHLLIPPINES worth, These officers left the Philippines in July, It is the intention to use these officers, after theil' graduntion, as a faculty for a similar school to be established for the advanced training of select<!d officers of the new Army, Negotiations will be opened with the American Army looking to the annual detail to the Leavenworth School of a few officers of the Philippine Army who were formerly commissioned in the Constabula1'y, From among available officers who have at. tended the Infantry, Cavalry, Artillery, 01' other special schools of the American Army, faculties will be selected, as soon as practicable, for the es· tablishment of similar institutions in the Philippine Army, A matt<!l' having an important bcari ng upon tmining of commissioned personnel is the instructional course at the Philippine Military Academy, Eventually the major portion of all officers Commissioned annually in the professional corps should have the adVantage of the special ized preparation made available by the government in this school. The AcadenlY is now functioning at the new site, the old Teachers' Camp in Ba~uio, The faculty is almost complete, Selected .o~fic ,rs fr~m the United States Army to execute poliCieS, expel"lenclld officers ft'om the Philippine Army and especially selected civili:tn instructors from the outside through commission in the reserve have been detailed. The curriculum is modeled after that of the United States l\lilitat'y Academy at West Point. The principal sources fot· Reserve Officers are, under the plan, the Reserve Officers Training Corps in t he seve!"!)l colleges and universities, and the ndvaneed training courses for selected trainees con. dueted by the Army itself, 'rhere was organized a service school for Reserve Officers on the ohi insta llations of the Military Academy at Camp Henry T. Allen, Bnguio. At this school werc 155 Probationat'Y Third Lieutenants of the Reserve whom it is planned to utilize in the instruction of ~he train. ing cadt'es for 1937. From this group of students may be dra\VlI officers for the Regular Force in the lower ranks, e, 7'h. U~~..e 06ir.tr~' Trg''''''11 CorN The fLO.T.C. unit of tho Un,venity of tho I'hilipp,,,,,,, orMIUli.ed "ndor tho forQ.!!illh~ ""d ~lIper\'is;on !If the United Stntc.s At'''~', atl&ru:d to operata under tho l'hil;pp;1l<l Army ?" Juno I, mao. To Ineot tho oporlltie" of ether R.O.'l'.C. unit8, .t ~,,~ b •• n ntc~ f)' 10 U80 tho Uni,'eni~~· of tho l'hHl ppin ca n. " Imml~lC Ilround. ~'ourt<'<ln Probationar}· Third I,ieutcnant.o and fout 1.10lllonanll. of the Phi lippin o At"IY h"ve b~n detailed thero fot "_I!,UT of du!y In order 111M they mny leMn R.O.T.e. work wilh n "'ow to tlle.r detoil iu other inatitulion. in tho nMt futuTe. . (I)

wh~ch

The Corps of Cadets at this institution consists of Infantry and Field Artillery. All cadets receive instruction in machine gun and other automatic weapons.

An o~~)eer 1J~~n~~'I',~~:~t,,~tC~~~i:;~~ ,~~r,Ii!~r!oJe~~:le~·~t ~i,~t ;~~;t: t"I;on. 'l'he unit i. now in epemtion. Sa lie{~OIl~~~C :~,~t:l;"eels...Snch~~:1d.;We~~r~i:o~~~~~i:jT{ort hrtRT .~~ "nil~. All theae "ui~ pro no,," in operation, (~ ) A~ ')fe. cnt liP,e. (I,e Spnto Tom", University, the Phil·

\~:J~{,.~~h:~!(:ln:~~' ~r.~ :::c~~ ~f'~r~~en:;~W.r.~i"c

Normnl

PREPARATORY MILITARY TRAINING UNITS I N

SchOOl

HIGH

SCHOOLS AND ELEMENTARY SCHOOLS

Under the provisions of the National Defense this instruction is to be placed under the super· vision of the Provincial Commanders who will uti· lize the male teachers in the school as instructors, All Provincial Commanders have been instructed to place the instruction in effect and it is considel·ed that the units are operating as hest they could under handicap due to the shortage of qualified instructors from the teac.hers. Along this line of training instruction personnel, there was held all over the Islands l~st summer a school for teachers who would go back to their r-':!spective schools and calTy out the prog.·am under p.·eparatory military training. Hesults obtained in teacher s' training camps were eminently satisfactory, Ae~

ORGANIZATION AND TIIAINING OF THE FIRST REGULAR

DIVISION 1'he First Regular Division with the First Regi . ment at Camp Murphy, Rizal, is in the process of organization. The regiments at Cebu and Mindana~ are still paper organizations. The training of the unit of the Fit'st Regular Division in Camp Murphy has been sacrificed in order to meet the problem of constructing barracks and quart.ers for enlisted men and officers, A regular training program was prepared and has already been issued. Training under this program is going on in that unit. Comtruction at Camp MUrphy has proceeded satisfactorily. The air·field and hangar arc already being used. BalTacks and officers' quartet'!; and other facilities were ready for thei t, projected use by Janual'Y 1, 1937 .

WI!.

ORGANIZATION AND FUNCTIONING OF THE TRAINING CADRES

The National Defense Act provides for the annual registt'ation of all twenty-year old men in

THE COMMERCIAL & INDUSTRIAL MANUAL

the Philippines. At the regiSLtation on April, 1936, the response of the young mcn was exemplary. The number recorded, almost 150,000, even exceeded the figure that had been initially estimated as }'cpresenting the total number of survivors of male childrell bom in ]916. In the interests of efficiency. the instruction of t rainees fol' service in the Reserve Force is to be accomplished in small detachments. The average strength will be about 160 trainees, and the pCI'muncut instructional force will consist of two officers and from eleven to fOUltecn enlisted men. 'rhc first class of trainees to undergo a full period of instruction will assemble January 1, 1937. Theil' number will be 20,000, to be succeeded by a group of equal size on July 1st of the same year, The procnreme.pt and al!ocntion of training sites for these cadres have been completed, Military sites have been selec~d in each province. Camp sites have beeen acquirl(d through purchase, donation or leasc, Prcpa ratiQ{1 for the construction of buildings is under process m the hands of the Engineering Flection of C-S, Pel'spnnel and Supply Division of the PhiliPIJine ArmY'VOCATIONAl, TR~ I NING

h~!'o

"c{'n decided us a n\atter of fixed policy

to dcpart from the usna l practice and tl'aditions followed by other nations in training their youth fot" their armies, by stl'cngthening thc military t r aining to be given to OUI' boys with vocational instruction mainly in agriculturc, taking into account the fact that our country is preeminently agl'icultul'al. But the real objective, by fal', transcends the mere plan to create un efficient fighting force, It stl'ikcs at the cause of OUt' food insuificienr.y, in the midst of vast natul'al rcsourccs. It aims to instill into our citizen soldier the desire and the ability to engage in a grainful occupation, so that when he leaves the AI'my Scrvice, he is better fitted to a ssumc his place in the community. I.

Tltl' lIu(u used in Ilrellnrinl!; thiM article were Ilnt hcrcd fr"",: HCIHlrt Oil Nu,ion,,1 Defcn ~ c ;11 tl.e Philippine! to Pre.â&#x20AC;˘;,lclit QUClon, <1MI'd ,\pril 27, 1930, by Field Marshnl DouIl1,," .\1""Arlh"., (b) Speeoh of :\r.. jor-Gcncrnl S~n'o! before the fir~t group of I'robationAry Third Licul CII~ nts on ,\u),:u st 22, 193(1, nl Ih~ nC!!en'e ome"",' Se..Âˇ;cc School. From n~porl on N"ti(UI~1 Delen.e in the rl.ilippinCl' by Field Mn",h,,1 Douglns :\lpc,\rthuT dated April 27, 1980, (el RepOrl! duted Jul)' I "nd .... ugu~t ,I. 1930,01 Colonel Fidel \ '. Seg"ndo, G-q '\S5istunt Chief of Stnff, Intelligence, Operations nnd Tr~,;n;nJ: Di"ieion. Philippine Army, (/I)

(tI)

:-<"lion,,1

D~I""."

CAPITOL BUILDING-MALOLOS, BULA CA N PROV INCE

\~,

PHI LI PPINES

CIVIL SERVICE UNDER THE COMMONWEALTH ' OR THE PHILIPPINES, honest and efficieut civil sen'icc as an cliSl'ntial of good government hegan thirty-six yenrs ago, when, applying the merit system and its principles in the con-

trol of insular affairs, President McKinley, in a message to Congress, stated that " it is important that this system be observed at h ome, but it is more important that it be rightly enforced in our possessions." The foundation stone u»on which the civil service in the Philippines has rested is found in President McKinley's instructions of April 7, 1£100,

directing the Philippine Commission to continue and !>cdect the work of organizing and establishing the LIVil government nlready commenced by the militalY authorities. In conformity with these instruc-

tions, the Philippine Commission, in the exercise of its legislative functions, passed on September 19, 1900, a civil sel'vice law which created a Board of three members-a chairman, a chief examiner , and u secretary to administer the civil service and to formulate and enforce civil-service rules and l'eguIRtions.

The curly civil service laws were administrred by men of long and tried experience in the

FubJic service. AMONG the first chairmen of the Board were the eminent Fi\i~no jurist, Don Cayetano S. Arellano and MI'. Frank Kiggins, '!later chi,,! examiner of the United States Civil Service Commission. As the funetiQns and activities of the Board expanded, it was felt that increased efficienc~' could b~ secured ~y sub5tituting a bureau organization for the ooal'd ol'gal1ization. Accordingly, on November 1, 1905 the Philippine Civil Service Board was converted into the Bureau of Civil Service. This organization of the personnelrecruiting agency of the government has remained the same up to the present, fol' although the P resident's Executive Order oil June 23: 1936, converted the heads of the Bureau of Civil Service into Commb;!lioners, it did not create a Commission, like that of the Unitcd States, in the scheme of operation. The task, during all these years, has been arduo us, 101' the gove\'nment, as is well known, is thc gr eatest of em ployers and as the complex busineSli of government calis fOI' the employment of a vastly gr eater num ber of men of all professions, callings, trades, and occupations than that of the largest private concem or the most stupendous private enterprise. But the system carried on. Step by step, its practicability and positive benefit$ began to be felt as fast and as soon as the liystem, in its various ramifications, was made applicable to the different grades and classifications of the servicc. Ycar by ~'ear, it gained more ground and took deeper root. The debilitating atmosphere of waste, inefficiency, I)atrona~e, favoritism, and /JII JOM: Gu .• C"no",i ..i,mu qf Cidl

Srr.;~'.

haphazard methods stood in stern contrast with economy, efficiency, equal opportunity, and scientific methods which obtained under the system, and positive gains were rcflccted in greater accomplishments, more dedsive results, and above all, in the u~-building of a forward-looking, honest, effective, and robust body of civil servants. In this connectioh, the President of the Philippines has this to say: The present Civil Sel'vice Law ali embodied in the Reviserl Administr ative Code of 1917 insofar as it. has been enforced to date, has built up an organization of civil sel'vants worthy of the highest respect and consicieration. It must have been the example of this strong body of public "ervants that has inspired the Constitutional Convention to make careful provision in our Constitution th at t he civil service may embrace all branches and sub-divisions of the Government." It b thus noteworthy t hat, after a slow but steady pr ocess, the merit pr inciple should have been given the signal recognition of having been made a part of the funrlamental law 01 the land ..

The followin g statement of number (If applicants fo r civil service examination since 1931 is indicative of the tremcndous gains made under the Commonwealth: 1931. HI32 •. 1933.

H,OlO ;;,729

..... , .. 1935 (£rom J nn"ary I to ~o" cmber I~) . . 1113&-36 (£' Oln No,·cn,bc . 15, 193'; 10 SCI'INnber S. 11136).

IS.Sl)i

193~

~.~O\

19.G61 1';.000

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On June 23, 1936, the President issued Executive Ort1er No 39, whiC'_h com-C!rt'ld the Bureau of Civil S(»'vicl! into r. En:L class btn'euu and m.'\de tha h eads thol'cof Commissioner and Deputy Commissioner of Civil Service. It is significa nt that said executive order makes the decision and re-

commendation of the Commissioncl' of Civil Service with respect to appointments, removal, separation, and othel" matters relating to the conduct, discipline, and efficiency of the employees ill the civil service final . The significance of the reorganization effecled may be gathered from the following portion of the Budget Message submitted to the National Assembly on June 23, 1936: "UncleI' this reorganization, the Bureau of Civil Service, in addition to its existing duties, will have charge of, and pass upon all formal investigations against officers and employees of the Civil Service. Experience has den~nstrated that sometimes the I'l llrit de corps in a gwen bureau is so strong that

THE NEP

compla ints presented by private parties against employees of the Bureau do not receive due consideration; on the other hand, there are cases where fur personal, political or other reasons, employees are not llroperiy protected in theil' rights. The Bureau of Civil Service, as reorganized, will safeguard equall.y the rights of the public and of the employees. I t wil! function as an administrative tribunal, act· ing as independently as the Courts of Ju stice. Appeals from the decision of the Commissioner of Civil Service may be taken to the Civil Service Boal'd of Appeals, who!ie decision thereon ,viII be final." Finally, in the new slogan "morc government a nd less politics" is cpitomized all the hopes and the longings of the classified em]lloyees. They see the promise of a new day when government employment is rendered a career, when the blind alleys into which many have fallen open into a wider horizon of progress and happiness.

AND THE COMMONWEALTH*

HE EN LARGEl\'IE NT of the home market 1'01' lopal produce and manufactured articles is an essential stabilizillg factor in the economic life of a countr y. In the face of changed trade relationships between this country and the "Onited States, such a move is not only essential but imperative. The NEPA has attained imm~diate JloJlularit~· in the Philippines because th~ public realizes the need of consuming more of the products raised at home which are not, or will no longcr be, absorbed by our export trade with the United States in view of the l·est.riction placed upon such a trade by the Tydings-McDuffie Act.

GREATER HOME CONSUMPTION of such products is for the present the most effective SOh lbon to ou r cxport-trade p!·oblem. The failure of ou r export. crop producers to markeb their goods in the United States necessarily implies a period of eco!lomic slump which demands an immediate re· medy. Such a slUmp, if not solved in time, would be fatal both to our agriculture and our farm bborers as well as to the country as a whole. In man'y export crop raising districts it would mean great hardships, and bankruptcy perhaps in cer· tain highly specialized crop sections. The NEPA'S two-fold program of industrialization and enhancement of Filipino participation 81/ E,.ISI;O Qumlso. JI an a,u. N aliaN al F.~ono'm'c Proltclianil m ..I.I,o.:;lIh'o".

in domestic ancl foreign trade, aims at enlarging home market for locally raised and manu· factured goods to meet in some way the above contingencies and enable the Country to stabilize it!> economic life. Essential to such a program is the teaching of the necessity and the advantages of national economic protectionism, which accounts for the extensive educational work at present conducted b~' the NEP A throughout the countt·y. Since the NEP A wa5 organized about two ~cars ago, it has consistently adhered to this obje{'.tive. The popular campaign for the promotion ~nd protection of home industries, has resulted in creating in the mind of the public a g r eater optimism with regard to the economic outlook of t he Commonwealth than that which existed before it5 establishment. Under this stimulus prosperous (lllr

PHILIPPINES home industries are springing up; Filipino capital and business men arc now active in trade; a nd the old industries arc being revived. As the doctrine!! of the NEPA nre now incorporated in the popular thought of the day, I shall now confine myself in this article to make n brief summary of its work, activities and accomplishments. ORGANIZAT ION AND PURPOSE

The National Economic Protectionism Association (NEPA) was orga nized in 1934. I t is duly incorporated under the laws of the Philippine Islands. I ts work is to promote industrialization and the enhancement of Filipino participation in do-

MEMBERS Active members of the NEPA are of four kinds, classified according to their annual fees as follows: Sustaining, 11500 to Pl,OOO; regular, P60; contributing, P2; and associate PI. Only sustaining and r egular member::; have the power to vote and to hold office in the Board of Directors. Of our 41 sustaining members, 23 r epresent manufacturing houses; 9 commercial; 2 mining; 4 insurance; 2 public utilities; and 1 banking. Our regular members number 44; contributing, 72; and a ssociate, 198. Personal pledges received by the NEPA during last year's drive totalled 10,000; this year pledges are expected to reach more than two million.

mestic and foreign trade by fostering the spirit of

economic protectionism among the Filipino people. The Association functions through a Board of Directors whose mem,bers are elected every year with a central office at 318-320 Crystal Arcade, Manila. Trained ~peakel's and writers, under the direction anr! supervision of the NEP A, take charge of disseminating the doctrine of economic protectionism thl'ouJ!h the press and c1rculars and bulletins; over the radio; at popular assemblies; and at school programs nnd civic reunions. Local chapters, organized In towns and pr ovinces, al.,o in ~chool~ and by civie or~anizations . are auxiliaries of the NEP A in their respective communities. The Nepa day is in the annual calendar of all the schools in the Islands.

BOARD Of' DmECTORS T he present Board of Directors is composed of Judge Rafael COl'PUS, president; Mr. Toribio Teodoro, vice-president; Mr. Tirso Lizarraga, treasurer; Mr. L. R. Aguinaldo; Mr. Isaac Ampil; Mr. Pedro J. Campos; Mr. Vicente Madrigal; Mr. Gonzalo Puyat; and Mr. Benito Razon. HONORARY BOARD H is Excellency, Manuel L. Quezon, President of the Bhilippines, is the Honorary President of the NEPA. Hon. Sergio Osmeii.a, Viee-President of the Philippines, and Hon. Gil Montilla, Speaker of the National Assembly, nr e the Hon'Qrary Vice-Presidents of the NEP A,

PROBLEMS OF THE COMMONWEALTH* OW THAT THE COMMONWEALTH has b~e n successfully launched lind a !)pear::; to be going full speed ahead under fail' skies, it would not be ,\Iniss for us to turn our attention to some of the pl'cssing problems thnt confront us. M:Jst of these problems are economic, and like the re~t of the world we must do our share in th ~ restorntion of economic stability to wh ich :lll nlltiollS arc bending their efforts. However, l:ecausc of Ollr peculiar si tuation, we in the Philippines have to solve not only problems of re:overy but :llso of readjustment to the I:ew order created by the establishment of the Commonwealth. The problems of recovery are not so serious in the Philippines as in other countries because the sloug h of the depression here hn~ not gone deep enough to cause suffel'ings to the people. But the problems of r eadjustment arc really Olll" principal concern and to them we should direct OUI" energy and combined efforts.

FOREIGN ECONOMIC PLANS Different nations are facing their economic problems in a more or less systematic manner by

cou,,!;r.

JOft.: J,.

eEl-UTE,

E..:tcuU.e S.cNl/a'1l

Na/io"o/

Eco"om ic

adopting some sort of economic plan to bring order out of a disorganized economic system. The most comprehensive of all economic plans today is that of Russia, where the communist order in which the state has assumed complete control of the economic

THE COMMERCIAL & INDUSTRIAL MANUAL

system. Ital~' unclel' Fascism has also a plan principally characterized br t he Corporate State in which politics is inextricably linked with <'conomies. Econom ic viann ing in Great Britain has been confined chiefly to I.l g l'icu]ture. Arucl'ica under the New Deal has various economic plans like the NRA and the AAA, both of which, unfortunately, have been decla red unco nstitutional by t h e Supreme Court. The craze of planning is spreading t hroughout the world unde., ail forms of governments and under all Idnds of economic organ ization. It is about time that we should consider the general outlines o f :\n economi c plan for the Philippines, especially in view of t he creation of the National Economic Council. Our economic development has proceeded heretofore without nn~' definite objective~; we have ex ploited our l'eSOlll'CeS with t he prime motive of pl'ovic!ing- fo r OUl' pr\sen t Ilc<,ds and we have been c{)utc-nted with the l'Csults, The new political status awaken s in us n different attitude toward O~!J' dch natural reSOUl'ce , Thei l' ol'ded y exploitation l11ust be our chief concerll, Ours is the rel'ponsibility to develop the ~atrim ony of the race not only to meet our pr~sent iJleeds bvt a lJ;v to C'lllsel'Ve it for the benefit of gencrations yet unborn, We cannot and do th is intelli$cntly a nd successfully wi thout any plan, The question now easily suggests itself: What role w;[! the Government play in planning? 1 shall only discuss the general outlines of the scheme which I have been able to form after careful study of the plans now u ndc), experiment in other countries,

it~elf to changes in demand for its products and it is only by more drastic action through the in. tm ,'pntion of the government in a way similar to the 1\gl'icultural Adju!<tment Act that supply could be made to conform with demand, While we curtail t he production of cr ops that are now suffering from the malady of over production, we should encoul'age the production of those crops that are welJ suited to our soil climate bu t arc now brought from t he outside in large quantities,

ACRICULTURAL C REDIT

One of the most important as]lect~ of Philippme agriculture that hus b een a continuous sOlll'ce of difficulty is that of agl'icl111ul'al credit, The small farnl'~I'S have always been the helpless victims of un scrupulou s money lenders who bog them down into debt, thus increasing the ranks of mal- Nntents, that b!amc the government for their sad plight, The consolidation of all Government agl'icultul'l!! credit institutions under one body to take t he responsibili ty of distr ibuti n/t agricultural credit in accorda nce with a pla n of agricultUral development would PUl'tly l'ellledy the situation while at the same time it would accomplish the desired object 01 limiting production where it is desi red by restricting credit in t hat direction and encouraging the production of cr ops that n eed to be encouraged by being liberal wi th credi t to producer s of crops that are imported at present. As the next definite step ill thi s direction, the establishment of an agl'lcultural bank to control exclusively our agricultural cr~dit becomes imperative, MARKETINC

ACRtOULTURE

Planning in agriculture, the largest and most important iJl(hlstry of the Philippines, must take into con si del'ation nIlt onl~' the supplyillg ' of domestic needs but also the world market for t he various export crops, The Philippines is s<,.!f-sufficient ill many agricul~ur3l products and in some, princi pall y sugal', copra an,d hemp, there is a large SUI plus for export. The principal market of these is the United States, with vel'y little prospect of finding other equally rich markets, The l'estrictio.M a nd limitations imposed by the United States on these principal expprt cr ops have caused drastic changes in the cr op!\. affected, The overplus of these products has demoralized prices and consequently the small profits derived will discourage further expan!<ion, Agriculture is slow to adapt

One of the ills that have hampered our agl'icultU1'ai development is the lack of ol'dedy marketing of our principal products, The middleman, like the usurers, l'eceive the gl'eate\' portion of the fanner's peso, and il) m9s~ cases middleman and the u surer are one and same per son, Tn England, the State reorganized agriculture through the agl'icultural Marketing Acts in accovdance with which the State has attempted to combine marketing arrangements and instituted com,pulsory regulation of market ing conditions, Marketing Boards for particular products have been established to aid farmers in securing better tel'ms from the distributors and to bring about a better gmding and classification of agl'icultural products a s well as improved prices for standard grades of produc ts, The cooperative marketing associations now in existence in the Philip-

PHILIPPINES pines arc too weak to achieve theil' purpose in spite of supcI'vision of the Bureau of Commerce. The reorganization of these marketing a ssociations on

the basis of products on a national rather than local scale would bring about more orderly marketing of our principal agricultural products like rice, tobacco, copra, hemp and others, which could be standardized. FUTune OF AGRICULTURE

The future of Philippine ngricultUl'c depends

to a large extent upon the settlement and tillage of large tracts of virgin lands that now lie idle because of the lack of fu r mers who would live the life of a pioneer in opening up new territory. DisCUliC, lad: of capital, of titlc!'; to the rightful owners of cleared land have discouraged many enterprising homeseekers it'om venturing into au" unsettl e~ provinces, Something must be done to remedy thi s situation, NEED FOR INDUSTRTALIZATION

While the country is pl'incipally agricultural, the Philippines cannot. alwayS- supply raw materials or semi-finished products fOl' the hungry factories of othel' nations, Our needs fo manufactured pro-

ducts keep on inet'easing and we cannot continue to depend upon other nations without seriously affecting most. of these goods, The goal of planning in industries should not be to produce everything that we now impol't but to manufacture only those articles to which the resources of the country are well suited and in which we enjoy a comparative advantage, Before we emba l'k on the industrializat.ion of t.he count.ry on an extensive scale, a thorough survey and appraisal of our natuml and human resources would be a necessary and indis pensable l)r21'equisite to determine what indust.ries have really the best prospects of sU l'viving the keen competition in t.he industr ial world, The indu shialiwtion of any country has never beml achieved without the aid of the State in one form 01' another, eithet' as the sole indu striali st as in the case of Russia 01' as silent part.ner of private individuals, In the Philippines the Government has played the part of a pioneer by starting new ventures 01' acquiring of ones to improve for the benefit of the public and not solely spu\'l'ed by the profi t motive, The Governmen t now owns and manages a number of societies whel'e they once rul ed supreme and abh,olTeil any kind of government intervention,

THE COMMERCIAL & INDUSTRIAL MANUAL GOVEnNMENT Am

Industries cnnnot be gUlI"ted without the aggressive and intelligent participation of the Govemment in organization and capitalizing them in the beginning. The Government must lead and show the way to necessarily timid private capital which is not slow to interest as soon as feasibility and profitableness of new ventures have been demonstrated. The Government has the technical knowledge and expert men at its disposal, who arc continuni!y experimenting on new products the raw materials of which al'e nbmwlnntly produced or can be produced locally. Once private capital is ready and willing to assume full responsibility, such ventures can be conveniently and profitably transfcrre<i to private individuals nftel" what the Govcrnmen'has invested has bqen recouped so that the amount may be used in othe" equally important enterprises that are still in the planning" It mllst be clearel" t at there are industries and businesses which, for SOCIal and national ends, the State must own and manage chiefly or exclusively. It is now an accepted fact tbat public utilities have been very successful under ihe government ownership and control and that this control has been of great benefit to society because of lower costs and greater usefulness since the purely pl"ofit motive has been subordinated to public service. There is also a growing recognition of the fact that not only the public utilities a r e well suited to become public businesses but also basic industries like mining, lumbering and others that provide human necessities" The reason advanced fo r their nationalization is not onl~' to prevent exploitation of the masses but also to conserve the natural resources. I NDUSTR IES BOARD

The orderly exploitation of Philippine industries could only be realized if it could be centralized under a sort of Ind ustries Board, a body that will act in an advisOl"y with powers to recommend the proper course of action to the Government. Needless to mention that the Board should be purely a body of technical men whose services and expert knowledge will always be available to private industries as well as those industdes belonging to the Government.

have nothing to do with ventures that have not yet demonstl"ated thei r ability to make profits for investors and it is Iut.ile to look to them for the necessary capital to start new enterprises. They may be induced to subscribe a minor portion of the stocks of new corporations but the greater portion of the funds must be fumished by a central bank owned by the Government. In case private individuals are willing to undertake the organization of new in~ du stries which the Government is very desirous of promoting, they should be given all the necessar~' financial aid by granting thcm loans at as Iowa rate of interest as possible. Japan's example along this line is wodh nothing. ']' he Bank of Japan grants loans to industries at the low rate of interest of 2 pel" cent. FORE IGN 'l'nADE

The industrialization of the country cannot be pursued to any extent without affect.ing our foreign trade. Many articles that are at present imported will be produced locally, which means that imports will decrease with the natural consequence of decreased exports. Of course it is possible that imports will not decrease; the decl'ease of imports occasioned by the manufacture of some articles that are now brought from the outside may be replacerl by other articles that were not consumed before and must: continue to be impol路ted because the Philip . pines does not possess the comparative advantage. In order to encourage the production of articles in which the Philippines enjoys natural advantages, similar articl(>s mcst be regulated or totally excluded from coming in by resorting to protective tariffs. This is not the place to discuss the merits of free trade or protection, but it is now generally recognized by almost all economists that protective tariffs are justified in nurturing industries that should be establi shed because of the comparative advantage the country enjoys. Protective tariffs should not of course be used indiscl路iminately; not every producer that asks for the usc of that weapon to eliminate a competitol" should be allowed to take advantage of it. Only those industries that after careful research and consideration of their merits deserve protection should be allowed the necessary safeguards.

SCARCITY OF CAPITAL

PROTECTIVE TARIFF

One of the g)'eutest impediments in the organization of new industries is the lack of adequate capita\. It is clear that private individuals would

A necessary prerequisite to economic planning in regard to foreign trade is power to manipulate the tariff to suit the plan. Unfortunately, complete

PHILIPPINES power over the tariff is not one of those granted by our Independence Law. The ability to industrialize the country depends chiefly on the control over the tariff. It is to be seL'iousiy doubted if America would be willing to relinquish t he power to us to have the final say on the tariff, but it is also within the bounds of fairness and expediency to grant the Philippines limited tariff autonomy on goods which are not imported in large quantities from the United States and which have the good chance of being supplied locally because the resources of the country and the people favor their exploitation. I'he tariff had been revised in the rust a nd mani pulated to suit immediate purposes

without any consi deration of long-runge plans as to the ends to be attained. In other words, tariff legislation is made to meet an emergency and not really for the purp~e of achieving permanent changes or reform. But the tariff cannot be administered wisely and in a most discriminating manner unless there is a Tariff Commission to do it in a scientific way. For this reason, it is submitted that the creation of a Tariff Commission is indispensable to the exercise of tariff powel's.

CURRENCY PROBLEM

Inextricably linked with foreign trade is the currency problem, one of the most ticklish and delicate aspects of any economic plan that may be evolved. Countries have tampered with theil· currency systems with the end in view of reviving their languishing foreign trade by depreciating it or devaluating their currencies. They manipulated t he external vlll ue of their money in order to increase the prices of imports in terms of the national currency, and to decrease the price of exports of other currencies which have maintained their value. The object, therefore, is to discourage imports and to encourage exports. Closely associated with the cu rrency problem :s the rcgulat:on of foreign exchange. Foreign exchange tran!Jactions are usually centralizcd in the hands of a central b::!.nk so that importers cannot get the money to pay for foreign products exccpt from it. Through this process, the central bank car. control or manipulate foreig!l trade in accordance with the objects of the state, whether to encour::.ge imports in certain di:·eetions or discourage imports f,·om countl':es tha.t fnil to g,·ant favors in their markets to the IJl·oducts of the controlling nation.

I PaOVINCIAL GovnmCIINT BU1LI)INO-

I\NTIQUB PaO\'INClI

THE COMMERCiAL

CURRENCY AUTONOMY

Autonomy in currency matters would be essential ill the economic plan here contemplated. Unfortunately this is a power like that of the tal'iff that is not yet granted to the Philippines by the sovereign nation. The power to reform the currency system in a mannel' that will not impair its present strong position and great confidence of the outside matters requires the creation of a central bank which will have the sole power to manage the CU1'l'cney system. It will also perforlll the very important function of being the manager of the credit system to keep it in n liquid condition at all ti mes. Besides the duty of managing the currency and credit system, the central banI, will also act as counsellor in financing industrie!; to be created or expanded, NATIONAL ECONOMIC COUNC IL

This, in brief, is the general outline of an economic plan that r have {n mind, These are the general objectives to atte~\ but I have not yet discussed the machinery of thl\ economic plan, Who shall do the planning? Who '!hall execute the plan? These two questions intrigue anybody who has done some thinking on the problem of economic planning, Considering our democratic form of government and the pl'esent attitude of OUI' people on anything that smacks of dictatorship or any form of coercion, these two questions :lI'e indeed a "knotty problem to solve, The task of framing an economic plan should be entrusted to the National Economic Council. The Council will have the task of organizing econo~ mic planning boards in all the principal industries, and the boards in turl1 will have the duty of fram~ illg a plan for their respective industries, These industrial boards will cooperate with the National economic plan, EXECUTION

The execution of the plan must be the next problem to consider. AileI' the plan has been fl'am~ ed by the National Economic Council, its execution should be carried out by the industrial boards fol' their respective industries. Thc supervision and inspection of the propel' function of the details will be undertaken by the National Economic Council. Experts should be appointed to pass upon the work of the aforementioned boards and sec whether it conforms with the plan set by the National Economic Council. It will be the duty of these experts to crj~

INDUSTRIAL MANUAL ticize the efficiency of each bl'8nch of production both from the financial and technical point of view. FINANCINC

The financial side of the plan should likewise come under the National Economic Council, which must have the cooperation of the central bank, the latter to be responsible for the supply and dish路i路 bution of the financial resources set aside for cal'~ l'ying out the plan, The methods of financing them should be decided by the Council U]lon the advice of the central bank sel'ving as the financial coun~ sellor of the National Economic Council. NUMEnous PnOJECTS

Within the s hort period since thc creation of the National Economic Council, numerous projects ha\'e already been submitted to this Body fOl' special study and recommendation, For the promotion of the agricultural and industrial development of the coun~ try, projects wel'e submitted by Secretary Rodl'i~ guez of the Department of Agriculture and Com~ merce, who is also a member of the Council. In路 dustrial projects submitted need a total outlay of about six million pesos, These projects have been previously studied and their possibilities determined by the Indu strial Committee created by the Secretary of Agriculture and Commerce, The amount esti~ mated to keep these various enterprises will have to be bigger in order to give due allowance to possible expansion once thev arc proven successful. To rely mostly on profits realized by these entel'~ prises for further exploitation would be a very ~low pl'ogl'am to be pursued and not conducive to rapid economic development, NDC PROJECTS The National Development Co'npany has also submitted two projects for study and recommenda~ tion. The first project proposed the establishmer,t of merchant marine calculated to promote the foreign trade of the country and to produce as much as possible the big difference in the indivisible items of trade, especially on freight trade of forei)!1l bot~ toms. This project needs an initial expenditure of seven million pesos, Without committing the Coun. cil to a definite policy on this project, it is believed that the electrification and industrialization of the country should first be developed to compliment our major agricultul'al exports as necessal',y justification fol' the cst.'lblishment of a machinery.

PHILIPPINES With the mony projects that are now on hand, and proposed to be launched, the Council in its PI'O~ g ,'nnt of planning the national economy selects only those that cater to immediate necessities and also to other economic activities which will give immediate relief to 1\ (;'l'catcr portion of the population in the form of employment and other benefits, consequent to the establishment of these indu stries. The limited resources of the Government coupled with the other necessary expenditures of t he Commonwealth, such ns for the national defense, education, sanitation, etc., demand a scientific allocation of these resources, GENERAL POLICY

In this connection, it may be pel,tinent to quote the general policies enunciated by Hon, Antonio de

las Alas, Chairman of the National Economic Council, and taken up during the last meeting of that Body, as follows: "At this point, I helievc that thc National Economic Council should c1ari£y the policy at least on two matters : " 1. In ease there ift pr,\"n! e intcrCllt. thnt might w~nt to Ink .. up nny plnn, the Economi c Couneit shnll Drrllnge for t he dc\"clo!">menl of the industry by .ueh !">.ivBte interCllt if properly orgauiled under the la"', of the Philippine!! unICOI the Philippine COlllmon ..'ea.lth belie.'C!I Ibnt the I'lln should be undelt.ken by it. In the ease of wAte r power. for 'nOltance. I would st rongly re<:ommend it~ nntie_ nnlizatio", .. " The t .. chnienl . t81f of the E conomic Council I h",U rely for t echnicnl information 0" the ted",i.al orgonintion of t·he Go"ernmont so thot there should not be nny fear of d uplication of wo rk in thot direction, The Counci l .hould solicit full coopc".lion from nil GOHrnmcnt entities in order t ll "1 the.e would be con.plele eOOr,li nM;on nll /llong thc li ne,"

THE RURAL CREDIT SYSTEM IN THE PHI LIFP INES * HE IDEA of implanting in the Philippines

rI system of farm credi t dated as far back as 1907 when the first Philippine Legisiatm'e took official cognizance of a plan suggested by the thcm Governor Sandiko of Bulacan. Through the sponsorship of the then Assemblyman Alberto Barretto of Zambales a bill was introduced in the P hilippinf' Assembly, the purpose

of which was to authorize the creation of a special type of agricultural a ssociations. In view of the novelty of the idea, and of the eagerness of the first popular legislators of the

country to find the best solution possible of the plight of the Filipino farmers, due to lack of available capital wilh which to finance their agricultural ventures, the bill attracted the attention of all the legal talen ts in the lower house, not excepting the then Assemb~ynUl.n from Tayabas who was to be the first President of the Philipp;ne Commonwealth, who activeLy took p~rt in the lonl; d~liberations of the details of the bill. IT TOOK PRACTICALLY EIGHT YEARS for the Legislature to ell!\ct the bill into law whieh is now Act No. 2508. othel'wise known ns the Phil_ iPI>ine Co-operative Rural Credit Lnw, the enfor cement of which was, by a subsequent amendment, entrusted to the Bureau of Agriculture. The first association was organized on October I, 1916, in Cabanatuan, Nueva Ecija, with a paidup capital of P250, At this writi~g, ther e are 571 associ~ltions established fron1 Aparri to Davao, with 1\ membership of around 100,000 and a circulating capital of more than thl'ce millions and a half, • B¥

J=UN

C~In"'.r~e,

8At.lIASI;[lA,

S"ptro;';"11 Fidd ,ll1tnl,

B"~.a,,

including therein the sum of about P800,OOO loaned from t he Agricultural Co-operative Fund , a s pecial fund created by Act No. 2818, as amended, and recently recreated by Act No. 116. The purpose of these associations is defined ill Section 2 of Act No. 2508, which says : "SEC. 2, It shnll be the p"rpo.e or the llfor~,,;d ft~ocin_ tions to nccumulnte ["nd! . by means of co-ope.nlion, ,n order to eXlcnd to thcir membe"" cr"dit Oil rensonable '''r'''! ror uelu!i"ciy agricultural operations. nnd to clleou '''I:("- 'hrift, "r_ ti\",ty, and pUllclunlity ill meeling 01>I'l:n,ion8 ""'0"1': ~~id rnOl"bc",."

To cal"l"y out sa id purpose, the law enumerates in its Section 5 the business which can be hansacted, as follows:

THE COMMERCiAL & INDUSTRIAL MANUAL

76 "SEC. 5.

AgTieullu rl\! credit co-oper"ti"" ..""ociations

mil)', upon ineOrl'OrBlion, cnlnge in ~he followmg opcrnliolll: "Cn) J<:,ttcnd credit t o tho members of the .. nocial io,,:

tion

· ~li. tF,~rr t~:n~"J~C~~~ 0.t::c't[~'~bt~:~~ tj;o~l~dh~~~~:~is~,:~

ninCI)'-I!ill: , lind lor purciuning lind Iccu.ing title to no,,- agricui t urfli IlIn d ; "2. 1-'0< the purchue of lh'c nook. fcrtil iz en. preparOltiona

~~r i~~;lc~~~rt~c~'hicl~1 tL:-'~o~:o~~;:o~r,~\u~~·cIC~:, ;~~i~~il~~~;i purposO!.!l "4.

o"clu~i\'dy ;

}'or

tho ""ltivn!ion lind improvoments of

~uch

lands

"5. ~'or tho cxpon!cs in co""cotion with the pillnliDg: culli"lItion, harvesti",. or en rC of nny ngricuiturro\ crop Or, p roduct. Or atornge and houling until lold Or InllrkCled; "6. U•• on gnther~d J1rodllet~ stored in :l ade plnee a.nd nt the d i$J1o~nl of the Iluodation in " su m not to e~cccd fil~y per centum of th~ fllir lllPlrkd vlIlu e of ~u~h IInthercd product~: 7 ,,"orb ior 1~~J;II!~i~nc~~sg~f~~~~' ofCI~~::l. and Illlliuto",,,,ce of " (b) Open crediu in Cllrrcnt ",cCOllnt, ,,·;th intcre.~. with tbe mcmbert of the nao-cilltion.

ror t~~~~u~~~1~t~~ ~r \~~~~h~(~,:~~~, ~~~t~~,'C~:~c~[;~~~~·~tiN~: Btock. ,Llul ,,,,.icult,,r,,l unplcn,cnt! nf ony kind and ~el1 the sllmo to the lIl~mb~u of th~ n "o~ intion. "(d) Contr"ct Jo,,"n. nnd recci,'c dCJlo~il..s in o rder to i ... rellse their workinll ... nd circuilltin, cnpi tal ."

Each association is governed primarily by the general assembly of .!tocl<holders who elect their officers consisting of a board of directors of five members. The board of directors has the power to pass on thc admission and resignation of members, the granting of loans , the declaring of dividends, and such other admini strative measures of emergent nature. Although these associatibns are privatel.yowned, financed by private individuals, and are not governmental instrumentali tlies, they are, however, subordinated to the Government for aU that a strict supervision over their affairs is needed to insure the confidence of the people who invest their money therein in the form of shares or deposits. The Bureau of Commerce, through its director and his duly authorized deputies in the field, exercises supervisory power over said associations with t he view to seeing that their operations are effected in accordance with the law, and if the latter should find that any provision of the law, 01' any resolution of the general assembly of stockholders, or the particular by-laws adopted for its internal government, or t he rules and regulations issued b.y the Director of Commerce, have been in any way infringed upon, said Director of Commerce may take such steps as will correct or remedy the defects he f ound, and he may even go to the extent of impos ing di sci plinary penalties of suspension or removal from office of the erring directors or officials. The Director of Commerce is also charged by the law to perform the duties of a legal adviser who is supposed to give hi s legal opinions on any con-

troversial points affecting the interpretation of the provisions of the rural credit law, and his opinions on the matter have the effect of a law, until same are revoked by a competent court. We cannot, actually, estimate in terms of pesos and centavos the benefits which the rural population of the Philippines has S'l far derived fl'om these institutions, but we can safely say that the rural cl'edit system in the Philippines, as the law-makers conceived it, and as its actual working so show, is the best system that can be applied to elevate the moral and financial standard of the farmers, Theil' only source of loan were the private moneylenders who used to exact from them highly usur ious rates of interest. We can, further, aid that in the Philippines, where the source of working capital is scarce, and where banking facilities are very deficient, any system of farm credit, either co-operative 01' not, provided it is run right and in line with the spirit of helping those who really need the help would necessarily be one that would fill a long-felt need. The rural credit, as we view in this country, is not only a banking outfit. It is more than that. It is a system of education that tends to elevate the degree of mentality of those who are ignorant of banking details. It is a sort of a social seeurity where the small and the downtrodden are given their chance to improve themselves by their own efiurts and by the help of their neighbors. It is a tendency to find a solution of how to deviate from the vicious circle of "the poor has no credit because he is poor, and he is poor because he ha s no credit," It is true, speaking in generalities, that the rut:al credit system in the Philippines has not been so well given the favorable l"eputation it deserves, because of the isolated ~:ases of th(;, p"~v'ilence of human greed and local bossism in its transactions. Loans were found to have been granted not to those who really deserved them, not' to those who understood the value of credit, but to political pets, relatives, and in many cases to the directors themselves. Naturally, the whole system which was conceived with the best of intentions would likely to collapse if such mercenary ideas would remnin to be unchecked, and such a deplomble state of things might continue to exist if the present law were not amended. With the enactment of Commonwealth Act No. 133 sufficient teeth were imbedded in the original law, Act No. 2508, to give the Government, through

PHILIPPINES the Director of Commerce, or his duly authorized deputies, the nccesso.ry powel' and prerogatives to put a brake on any anornaJly in the operation of said associations which human frailty is wont to commit. The idea behind t hi s is to assure the people that their interests in these local credit institutions will be weH safeguarded. The Bureau of Commerce is now engaged in the difficult tasks of rehabilitating the said associations, making them more useful to the rural cornmunit.y than they used to have been, dissolving those thnt constitute as the black eye of the entire organization, and giving every onc a chance to make up whatever have been committed in the past. When these small local credit institutions arc already rehabilitated, the defects found in their

workings are reduced to the minimum, and the purposes foI' which they were organized are well manifested by the nature of their transactions, there is every hope that the Gover nmcnt of the Commonwcalth will be deter mined to utilize them as the only media for achieving closer relationship with the rural constituency. President Quezon, in a n interview which he had with a representative group of members of rural credit associations, said that he would open all the credit agenc:!ls of the Government to finance these small institutions provided they were run right, and the people are now eons- ' cious of their grave responsibilities and are trying the best that they can to live up to the expectatmn the Chief Magistrate of the Philippines.

PURPOSE AND SCOPE OF THE COMMONWEALTH SECURITIES ACr HE ENACTMENT

THE SECURITIES ACT (Commonwealth Act No. 83) by the National

Assembly in the\ last session marks the most important development in the history of the local stock market.

It is the fir3t concrete manifestation of the Government's policy

to control the secu,rity business in the Philippines so as to curtail the activities of unscrupulous promoters and dealers in flooding the country with securities of doubtful value.

The Act was passed in view of the speculation mania wh:ch has gripped thousands of investors in this country as a result of the gold stock boom. Seeing a chance to play on the enthusiasm of the people to buy shares or units indiscriminately, mt'ny promoters have formed numerous corporations and associations fOl' the purpose of selling stocks to the public. Thus, securities worth millions of pesos have been dumped on the local market, a considerable portion of which are speculative in natu re. IF the speculation in worthlC!ss securities is not restrained, it is possible that an economic crash similar to that which occurred in 1929 in the United States might befall t his country and bring misery to the people. Accordingly, His Excellency, President Manuel L. Quezon, in a special message sent to tbe National Assembly on September 30, 1936, urged that body to enact the law, which is similar to th e Federal Securities Act of 1934. The Act is entitled, "An Act to Regulate the Sale of Securities, to Create a Securities and E xchange Commission to Enforce t he Provision s of t he sante, a n d for other purposes." â&#x20AC;˘ HII

M":H"H. O. I""'A. eM_f.

11"",," of C..mmucr.

TrUll. ReVIllul,,,,, S<c/i"".

WHAT

S ECURITY?

In its ordinary sense, "security" means any instrument which renders certain the performance of an ag reement or contIÂˇact. Under this Act, "security" is so defined as to embrace a detailed list of instruments ranging from stock certificates, bonds and investment contracts to promissory notes, and also certificates or instruments "evidencing beneficial interests in title to proper ty, rigbts or earning." It is sign ificant t hat the 'National Assembly in so defining the ter m "securities" in this Act purposely broarlened its scope so as to eliminate any possible evasion of its provisions. "Specu lative securities," as defined in this Act, include among others (with certain exceptions) securities of enter-

THE COMMERCIAL & INDUSTRIAL MANUAL

prises engaged in the promotion, exploration or exploitation of minerals, and also all kinds of secur-

ities for promoting the sal e of which a commission of more than 5 ller cent is offered. SU~]MARY

l~IPOR1'ANT

PROVISIONS

I . [ t ClI t801 i~hC:l " Sec n, il i"" "nd l~ x ch ,,"~\, Co",,,,iuiQIl cnforC8 t ho ]lr o\'i~io"~ of th e Act. T he Co""" i""ioll ;$ hca<lcd by " C OlU mi Qioncr 1I1l1'0 in l Co by t he I're..i d\, 1l1 with th e co nsent of th e Co 'runi ~ ion on Appointment$ of the NU\;OIl AI A"emb l ~·. 2. Itdc liua the te.m, co"'m OIl I~' i n at oo k " " .. kd trodi,,::. " . elo as ··~cC" t i l ies. · · "!]lcclI]n t h'e seeu r it il!l!." ·· br o ),; c~ . " " d eal er," "~l l!!lI1an." " ;5:l II er ," "exc ha nge," "lIIe,,,b<:.:' " fnei li!)'," " bnnk,"

",cd

et c. 3. I t pro\'idc. fo r l he comp ulsor)· reJti~trnlion or " n ki nd! "nd of ~ceuri ti u from the ti me th i. Ac t !"ke. effcct. c):ee l't th oae SllCci fi cII ll y uc "'pled by it . or I h o~e iu ... ed in the eour-Ie of rtjJiflral,·oll' Tl 'e e):empl ed trDlL' 8 c tion ~. T he proe_duro lor d~~c ri plion

rn'"~f~[.~~,~ !rrtl~::~~t~~i~i,~ t~e~l~r~tt~t~1,~~~~,~ "~i~sroe.i~0~wi;rt~~7~t:c~

mcnt ,yilh r~ p ec t t.o ""cit ,,,curit'''''. contn,nin\l nmo,," others, It.e [011011';"1\ infor ",.,ti on , IIntne nud ",'dr c~8 of the 188uer, il s ellp;talizLllion. BLl'! ct" . incollle, chur" etcr of busi"c ..... the n .. ~urc of thc secllritie!O. comm illlL ion p"id for thc ""1e of the on me , Ilr omolcr'$ fees . lind such ot he r in forn ".tiOll. rCI,orl ., d oc um en t s Hnd dnln in tcnded to ci,·c pro.peeti ,·c buycr$1I Ir" "'. hnd co mpl et o dese!il" io " ""I ... e of Ihe secll r il;e< offeTed for ""'e.

,,,,,j

The classes of seCurities to which this la\v does not apply are those which have been sold or publicl y offered fo !" sale be ore the Aet takes effect, and also t hose issued by the United St.:ltes and Philippine Governments or any political subdivision of the same, by banks, buil~ing and savings and loan a ssociations and public\ ut:iities. A list of tran sa ctions which are exempt from the provisions of thi s Act is also included thLlrein.

",,<I

.1. T he III " · also I,. o,-i d<,_", for the nlnn ll ~ . of rCl: i "l~r i"g lice nsin!; of b rokelll, dea]c~. U ]("j\mC1l , ,mel """ k exc h" nttco. Th" pro"i,ions on this subjec t eontain sl rinllC11t ~1;" I R ti on8 co,·",in= th e prMticts a nd lra n &lIction~ of u""k e ~ eh""l;et and b . okers li nd their

~~~;:it;i~;i!~e. e~~:~~-i~~c~).D~r':k~::'lltT~"n:;::ti~'::S ~,~~i~~~~I~~~~ ::~i(>~[~eIlf~~i~~o~!.ferr~;~ h~o "~~~~~~~~'~\~<I:en:;:..t:i:~"·Of ~~: ;~:i~:

' r Btioti of b. okers. d en iers . ~alesme tl. ,~ nd stoe k cxc h" ni;es. 5. ('in n11)". th e Act pro" id es for t lte pr9ced m e t o b e follow .. <1 !i n invCIt; ~B l in t.: ntld pro' cClltin!: '·;0]"I [Otl8 of it s pro,"i~;';", . :tud ""I:u l nl i on ~ th ere und er , " nd lh e pc t"<lti ee for the "'''''0.

How THE LAW WORKS U pon ta king effect of this Act no new securities not included unde r the exempt class shal~ be publicly offer ed for sale in t he Philippines unless the same sha ll ha ve been duly reg ister ed in the Register of Secul'ities ke!pl in the offiCe! of the Commission. The sta tcment for t he re!gistrat ion of any sccl,;.rity subject t o the pl'ovision s of this Act is required to be published in two newspapers of wide circulation for two consecutive weeks, and the registration takes effect at the cxpiration of seven days after the Jast publicati on. The r egistration statement, together with all the pape rs attached thereto are open to the inspection of interested parties. The C ommi!<~ s ion is empowered to suspend the r egis tration of

any secul"ity if in its opinion the infOI·mation given in the statement is 01' has become misleading, incorrect 01' inadequate, or the sale thereof may wOl'k n fraud. The Commission may, ther efore, l·equire the is· suer to furnish additional information to enable it to detel'mine whether the registration of such security may be revoked. Before a final order for the suspension or revocation of the registration of a security is entered, the issuer is given an opportunity to be heard, and if upon such hearing, the Commiss ion shaH determine that the sale of the security should be revoked on any ground enumerated in the Act the decis ion shall become finai. An appeal from such final ol'der may be taken to the President of the Philippines within 30 days from the receip c of notice of the order. With respect to the license to sell speculative securities, the Commission is empowered to determine from the statement and documents attached thereto filed by the issuer, whethel· 01' not the issuer is of good repute, and his bus iness is based on sound business principles, and that the sale thereof would not be fraudulent. I n the event the issuer passes this test, the Commission may gl'ant him a permit to scl ~ such securities, but such permit shall be per· missive only, for the Commission does not undertake to gURl"Untee the soundness of the securities permit· led to be issued aud offered for sale. ' The object of the law in requiring publicity for all new securities before they can be b·aded in the market is to place within the l"each of the public all pertinent information concerning such securities so thHt the prospective investors may judge for themselves the merits of the particular secm·it.y which they intend to purchase. 'l,'he provisions regulating the business of stock brokers and the operation s of stock exchange vil·tualiy repeal that portion of section 3 (e) of Act No. 2728, a s amended by Act No. 3969, authorizing the Bureau of Commerce to regulate said business . The Commission will a ssume control over stocl.. brokers and exchanges on January I, 1937, As explained in the first part of this article, the Commission is given ample powers by this Act to l'e· gulate and supervise the transactions and practices of brokers, salesmen, dealers, and stock exchanges. The new law provides for the manner under which stock exchanges may per mit members to be registered as odd-lot dealers or as specialists, an innovation in the matter of stock h·ading in this country.

PHILIPPINES The Commission's powers with respect to stock exchanges arc clear and definite. It is authorized to suspend or withdraw the registration of a stock exchange for a pel'iod not exceeding 12 months for the violation of any provision of this Act or regulations thereunder, or to expel for a li ke period an}' member or officer of the exchllnge. It may also ,suspend trading in a ny r egister ed .!'ccurit)' on any stock exchRnge fOl' n period not exceeding ten days. if the public interest SCI requil'Clt, With the approval of the President, the Commission may suspend sUllmlu .'ily all huding on any exchange fol' a pel'jod of not exceeding 90 days. 'Phe strict J'ules and regulations governing the h 'llnsadions of bl'okers and stock exchanges contained in this Act are obviously designed to insure honest and fairdealing in t he purchase a nd sale of securities. BEl\'EFITS To BE DEruvED This Act is not invulnerable to criticism. Like any other law it contain\ ' OOPhOles which f u ture legislations may remedy. However, as an aid to the solution to the prcsent problem or conciitions obtaining in the local stock rnuket, it oifers many advantages which existin~ law~ and regulations do

not have. I n the fil'st place, the control and supervi!'ion of the security business in t he Philippin!'!!' is concentl'u ted in one uody with am ple and extenl'ive powers to restl'ain and correct ex isting unethicnl practices in stock h'ading, This centrnliZf'd supervis ion will no doubt result in the efficient handling of the operations and activities of promoters, brokeors m'd stock exchanges. SLcond!y, the prohibi. tion against the distl'iblltion and sale of securities without previous I'egistration in the office of the C(lmmission will, to a large extent, discourage many pl'omotcl'S in theil' Attempt to dish out to the public valueleSl-l secul'iiies, T his will have the eff,~ct of minimi:r.ing the number of corporations 01' associations who sell units or s hares fOl' no other purpose thal1 to fleece the careless and indifferent investors of theil' harc1路eamed saving;;, Th irdly, with the disappeurance of swindling ollcrotions from the field of legitimate bus iness, capital will necessarily be dive r ted to good and sound business ventures. And lastly, the strict regulations govcl'Iling the transactions of brokers will give impetus to honest and fair dealing in stock tl'ndin''; thereby regaining publi\.' confirlence,

PR OVINCIAL CAPITOL BUILCINO WmLE UNDER Co"'STRUCTION-LUCQNIo.. TIo.\'Io.EIo.S

THE COMMERCIAL & INDUSTR1AL MANUAL

LmtTATIONS O~路 THE ACT However laudable the purposes of this Act may be, it can not save the public from the evils of speculation unless the investors themselves will use good judgment in the selection of stocks. This has been clearly stressed in the explanatory note of the bill which reads as follows: "It is not. believed that the provisions of the attached biIJ would completely prevent the commission of frauds upon the public in the sale of sccuritips. The ingenllity of man is limitless, and no amount of legislation can absolutely forestall abuse. Much de!>cnds upon the investors themselves. Yet, it should be the aim of the Government to afford the public such instrumentalities for their protect ion as may be legaUy afforded them, and it is believed that thc attached bill docs exactly that for them." Obviously, the pri nlRI'Y aim of the law is to PI'C_ vide an instl'umentality whereby the public and investors may seCUl'e accul'ate information l'egarding a given secul'ity. and to see that no fraud is practiced in connection with the laic of the same. It is

the duty of the Commission to gather a U pertinent information pertaining to securities intended to be sold by the issuers, and to present t he same to the prospective buyers, but in so doing it does not in any sense guarantee the value or soundness of the same. CONCLUSION While some of the regulatory provisions of this Act are still subject to administrative and judicial interpretation for a better appreciation of the same, Yf't the true intent and purposes of the law are chmr. The success of this new law in minimizing f rauds will cepcmd materially C'n the intelligent administration of its provisions. The Commission has many problems awaiting it for immediate solution. With three stock excha nges and mOre than one hundl'Cd brokers to regulate and supervise, not to mention hundreds who are operating clandestinely, one can oniy imagine what a tremendous work is awaiting the Commission. lt is to be hoped, however, that with the broad powers given it by the law it will ultimately succeed in making the investment in secI:l'ities in the Philippines a safe and sound proposition.

REVENUE SYSTEM OF THE PHILIPPINES * HE REVENUE SYSTEM OF THE PHILIPPINES does not differ vel'y much from those of other countl'ies. As a young and growing country, the Philippines is confronted with the problem of increasing the sources of income to meet the increasing expenditures incident to the new political status. The revenue of the P hilippines may be divided into three kinds, namcly, revenue from taxation, incidental revenue and earnings and other credits. REVF.NUE FROM TAXATroN:--Taxes arc by far the hll'gest SOUl'ce of public revenues in the Philippines. The revenue from tax<ltion nlone compl'ised about 68.6 pel' cent of the total income of Lhe Govemment in J9:lG. The regular illcome of thc Government fO l' 1936 amounted to P84,927,915, while the revenue from taxation amounted to P57,899,G80. The revenue from taxation for 1937 is estimated at about 1'70,437,700. The most important item of the revcnue from taxation is customs duties, which furnish about 28.5 pel' Celi"t of the entire income of the Gover nment. The next impol'tnnt source is the license and husiness tax, the proceeds of which <lmount to ahcut 20 pel' cent of the Government's income. Then comes the so-called cxcise tnxes, which yield about 14.8 pel' cent of the whole.

THE PHI LJPPJNF.S also have nn income t..1.X which fUl'llishes 5.!} pel' cent of the entire incom~ of the Government. This :;OU1'ce is not ;."et important in a country where big fortunes are still Incking

but with the rapid economic development of the country, it is bound to be one of the chief !>oUl'ces of revenue for the Government. As in other countries, the increasing reliance on direct taxes, like the income tax, is the tendency in the Philippines. Last year, the National Assembly d ecr~ased the

PHIUPPINES exemption fOI" the payment of the income tax from 1'.1,000 to 1'2,000 in the case of bachelors and from PG,OOO to N,OOO in the case of married persons or thClge having dependents. The tax on corporate in('orne wns a lso increased from three per cent to six per cent, a figure that is vcry low when compared with other countl'ies, especially the United States :lnd England. Tn the future, as the country needs more funds, the income tax can be depended upon to yield a larger I'CVCfl\IC fOl' the Government by increasing the rate. Indirect talCes are still the main source of revenue fol' the Governmcr.t in spite of t he low I'at(> imposed at pH!sent. The import duties charged on impo\'ted goods am still vcry low even for revenue purposes only. The tariff duties of the country are fixed primal'i1y to l'aise revenue and only incidentally for lll'otection, But as the country moves toward greater inrlu!;t\'ialization , the need to increase these ull'iff duties will be,come more urgent, in which ease there may be !:I reduction in the revenue to be collected from this sou rce, But the decrease in the import duties as the Commo wealth 2dopts the policy of pI'otection may be more than made up in the license and bu ~i ncss tax, as well a s the excise tnxes as a result of greater economic development,

As the industdes develop and their income increases, they s hould be able to bear a higher rate of taxation, Other taxes that yield n handsome revenue to to the Government nre the documentary tax, tonnage dues, inherital'.'ce lax, immigralion tax and franchise tax. Most of these taxes, especially the inheritance tax, the immigl"ation tax and the franchise tax could be increased to yield a greater amount. The inheritance tax is very low in com_ parison with that of other nations and it could be easily increased without any adverse social effects. The eeduJa tax is condemned as being antiquated and regressive in the highcst degree, and upon the l"ccommendation of thc President of the Philippines, t he National Assembly abolished it, INCIDENT ,\L REVENUE

This second kind of puhlic revenue, or incidental revenue, includes forest charges, United States internal revenue taxes accruing to the Philippine Treasury, interests on bank deposits, intel'ests on investments, sales of public domain, fees for the l'cgistrn,tion of corporations, t rade mar!n", etc" anci rental for the u se of public waters in the ll:ener3tion of power,

THE COMMERCIAL & INDUSTRIA L MANUAL

'J'he incidentu] revenue of the P h iJippin p. GovCl'Il111cnt for 193(; amounted to 1'4,496, 172 01' 5.2 pel' cent of the entire income. The largest of this incidental revenue is th(' revenue from the forest 1'0SOUl"COS which constitutcg nbout 2.6 PCI' cent of the whole income. As the IOl'c!1t resources of the countl'~' nrc marc ~"tellsively exploited, the income from this som'ce will illtl'cnse. EARNINCS ANI) OTHER CnEl)l TS

Thi s third kind of revenue consists of the fces collected by the Government for s~l'vicf!s rendered, income from commCl'cini and industrial undel'takillg'S, n~ well <IS the snle of fixed property of the Govcl'nmcnt. The Bu r eau of Posts is one of the Inl'gcst llJoJle~'-makiJlg units of lhe Government. Ot.her items included under this arc the repayment of the loan to the :i\lanila Railroad Company, repaYllient of advanee~ to the Philippine Railway Company, as well a s the payment from t.he P hil_ iPI>ine National Bank on account of fixed deposits wI'itten off. The total in ome derived fl·om these sou rces amOllllted to 1122,037,800 fol' 1936 01· 20.6 per cent of t.he entil"\:! incomc of the Go\·e l"llment. Receipts that are automatically apPl'opriated amounted to ]>494.261.

The Ph il ippines is embarki ng on a program of indufltrializatioll in which the Governmen t will t ake the active leader ship, T he diffel'ent industries which will be established by the appropriation of public funds will be u potential sources of income for the Government once they arc on a pl"Ofitable basis. For the present., however, the investment of puhlic f unds will not yicl<l a n immediate income, f(ll' these young in<!u!'tl"ie~ are nnt expected to yield any profit in their first yCUl'S of opcl"Iltion. While it is not the intention of the GovE'rnment to ('ontinue il~ bllsilleSt. for on('e the!'e indllsb ies arc well established and private capitalists :"l.l·e willinl! to take Illem over, the Govcl"IlIne nt will withdnl.\\'; llevcrthelc!'!' there are (!(,l'lain industl·ies which thl' Government will continuC' to own and o!)('mte, like fot" C'xamplC! the public utilities, which will be p.n importnnt source of income for the Government. SOllRCES OF INSULAR REVENU.:S

'rhe Insular GovC!r nment del'ivC!s its revenue chiefly from tnxatioll. 'J'he Insulnr Government exercises most of tIl(! taxing !lowet', Ilnd the provincial and municiplI! Jrovernments clln only derive their income from their very limited power of taxation. ~Iost of the income from these three princi-

PHILIPPINES ]la] kinds of revenue accrue to the Insular Trea~ SUl'y, ancl pRrt of the proceeds of the collection from these sources arc allotted to the provinces and municipalities. The taxing power of the Insular Government is very broad and as the expenditure inCl'case, the prescnt rate of taxation could always be increased, 0 1' new som'ccs could be created to raise the necessary amount. LOCAL REIVENUES

The revenues of the provinces and mUllicipai. ities fIrc also derived chiefly from taxation, but their taxi ng power is vCl'y limited. While the municipal government is given autonomy in matters of taxation , this autonomy is nullified by pl'o\,isions of acls which prohibit the municipal council frr,m imposing- a nUl'lber of taxes, charges and fees, Becaust! of this prohibition of imposing certain taxes ane! iees, th~ municipa, gov('rnment has exce('dingly limited SOUl'ces of revenue, The municipal ~overn足 mcnt, however, is allowed to levy a tax of not less than one-foul,th nor nlOre than one-half of one pel' cent on lands and improvement thereon, It is also allowed to impose taxes upon persons engaged in business 01' exercising prh'ileg~ in the municipality and to f ix the mtes thel'eof, MUnicipal Iic..::nse taxes are imposed on many kinds of businesses located in the municipality, The provincial government can levy a land tax of not less than one-eighth and not more than threeeighths of one pel' cent, Tt is also allow..::d to levy rolls for a period of five years or less on roads, bridges and ferrics for the construction and maintenance of said means of communication, Both thc municipal and the provincial govcrnments receivc t heir share of revenue from the InsulaI' Govcrnment, According to the Internal Revenue Allotment Lnw, the pl'oceeds of fees ror the sealing and licensing of weights and meaSUl'es accrlle equally to the province and municipality wherein they are collected, The proceeds of the internal rC\'cnu(' liccnse t.'Ixc~ on thClltCl'S, museums, cockpits, COllcel't hulls, pawn brokers, circuses, billiard rooms and retuil dealers in liquors and fermented drinks, nre (01' the exclusive benefit of t_lle municipnlity whcl'cin the same are collectcd The proceeds of the ceduln tax werc equally to the province and mUnicipalitv wherein they are collected, if the amount of the' tax is fixed' at P1,OO, Whel'e the cedula tax is fixed at 1'2,00, the e..:tra 1ll'!;0 is allocated to the schon! fund nf the municipal_

ity wherein collected, 'l:he local governments will be deprived of this important source of revenue beginning 1938, From the gasoline and oil taxes, the provinces receive twenty per cent for the construction of provincial roads and bridges, and a like amount for th\! same purpose from the motor vebicle registration fees, There is an absence of segregation of the sources of insular and local taxes and reform is very desirable in this direction, A t horough study and 1'eyision of the revenue system of the Philippines will correct these defects in the prcsent system, THE EXPORT TAX One of the potential SOU l'ces of revenues of the PhilippineI'> which may be discussed in this connection is the export tax as provided for in the Indepcndence Law, Under Section 6 of the TydingsMcDuffie Act, the Government of the Commonwealth is required to impose and collect an cxport tax on all articles that may be exported to the United States after the fifth year, Under this provision of the Independence Law, an export tax amounting to five pel' cent of the United States duty shall be charged dul'ing the sixth yeal' of the transition period, ten pel' cent dudng the seventh year, fifteen pel' cent during the eighth year, twenty pel' cent during the ninth year and twenty-five pel' cent of the United States duty during the tenth year, Export taxes are not new in the Philippines, During the Spani sh times, eXpOl't taxes were levied on Philippine exports, DUl'ing this period, however, there is hnl'dly any country of importance that levy an export tax, but the Independcnce Law provides for t he levying of the export tax as a measurc to limit the exportation of Philippine goods to the United Slates, The proceeds of the expol't tax are to guanmtee the payment of the bonded indebtedness of the Philippines, Thc export tax will naturally yield a handsome revenue to the Govel'nment, but it will affect adversely the many industries of the countl'y which, in the long run, will be less able to Cal'l'y the burden o( t.'Ixation. Pending the res ults of the Trade Conferencc between the Philippines and the United States, it is hard to predict whethcl' this export tax will be finally levied b~' 1941.

BALANCF.O BUOGET

The Philippines is olle of the few countries in the world that cun proudly point to a balanced

THE COMMERCIAL & INDUSTRIAL MANUAL

budget. The total ordinary expenditures for 1936 amounted to P76,585,742. The income amounted to 1)84,927,915, $0 that there is an excess of 117,342,173. For 1937, the estimated income amounts to about P87,797,4'()O and the ordinary expenditures would not exceed this amount. During t he last few years when the depression was at its worst and many sources of l'cvenue have dried up, many countries werc fOl'c('d to incur large deficits because their income was much behind their expenditures. Thus, it is a f:lct that public debts have grown enormously in many countries, ccpccialJy during the depression when numerous rehabilitation measures required the expenditures of large amounts of public funds. This is especially t1'ue in the United States where the New Deal has organized many agencies to help bring back pI'osperity and to minimize the evil effects of the depr ssion upon the social order, The enormous d~lands of the Commonwealth will naturally impose heavier burdens upon the Filipinos, Taxes will have to be increased and other sources of rev('nue must be devised in order to increase the income of the Government, The

Philippine!> is fortunate in having escaped the worst effccts of the depression and its productive capacity has not been impaired as badly as t hose of other countries, New industries are being de路 veloped rallidly, especially the mining industry, With the rich natul'al resoul'ces of the counb'y, many industries could be pushed further which will mean an increase in the national income, As the national income is improvcd, the country could beal' higher taxation and thus it will be able to meet its increasing expenditUres, The Treasul'y enjoys a handsome surplus accumulated through a period of years which the Govel'nment can always depend upon to meet expenditures as demanded by the new political status, With the favorable treatment that the Philippines is expecting from t he coming Trade Confer ence in Washington, the Commonwealth is very optimistic as to its ability in maintaining economic stability in th;) country, With greater economic developnlent and prosperity, there is no doubt that the Go\'el'nment can meet all its expenditul'es in the future,

CENTRAL BANK NEEDED TO CONTROL TRADE' Insul ar Treasury is I nadequate to Manage Currency System of the Philippine Commonwealth HE MOST DELICATE and also the least und;:rstood although the most discussed phase of the economic life of any countr y today is the currency problem, The inflation of the currency during the years 1927路29 is blamed for the roaring prosperity experienced in the United States and brought about the collapse of t he economic structure in October, 1929, 1'0 save a constantly dwindling foreign trade upon which the indust!'ies at home depend, countries raised already high tariff walls, and when this measure was found ineffective, nations }'esor ted to tampering with their different CUl'renzy systems by abandoning the gold standard , Tho.l first country that abandoned gold as a measure to protest foreign trade was England when redemption of her currency into gold was s uspended in 1931.

THE EXAMPLE OF ENGLAND was quickly followed by those countries that are closely linked with the pound, 01' those countries belonging to what is known as the sterling area, including the dominions with the exception of Canada, The countries .811 Al'IIlII!:8 V, CA&1'ILLO, Tuhm'cal Adr"8er, D<p<lrlm.nt 01 p,'n .. nu, D.GIO, Col/toe 01 Bu.i" ... Admin,','ralion, U"irtrnl1/ 0/

MIIIU'la,

in the continent of Europe followed and the practice of depreciating the currency extended to South America and Japan, With the gold standard, France and the members of the "gold bloc" manage to stay on gold at great difficulty a nd they would also follow the prccession especially F r ance had she not experienced great difficulties with paper money inflation during and short1y after the war,

PHILIPPINES

dollar, the United States has a dopted n de facto gold standard. The Philippines also is now said to be back on the gold exchange standard. The abandonment of the gold standard and the devaluation of the dollar were measures avowedly to raise the price level in the United States and start business on the road back to prosperity. The monetary policy of the new Deal was designed primarily to suit conditions in the United States and the interest of the Philippines never figured in the deliberati.:ms of the administration when they enacted those currency measures. The price level in the United States rose as a result of the currency policies, but the same thing cannot be said in the Philippines. The price level of the country has decreased instead of increased. The local price level, taking 1926-28 as average or 100, was 66 in 1933, the year the United States abandoned the gold standard, 58 in 1934, and 69 in 1935. As ide from these considerations, the devaluation of the dollar yielded to the United States Treasury an enormous pl路ofit of about 2,800 million dollars which amount is being advantageously used to maintain the stability of the dollar and also for the general welfare of the count!")'. The Philippine reserves amounting to $56,000,000 aeposited with dif-

In a world of depreciated currencies, America cnnnot long continue to stay on the gold standard v.-ithout greatly h andicapping her trade, and by Executive Order of President Roosevelt on April 20, 1933, the United States definitely left the gold standard. With the United States off gold, countries connected with the dollar exchange must follow the route of the dollar. Not content with abandoning gold and making all monetary gold the property of the government, the United States also passed the Silver Purchase Act of 1934 providing for the purchase of silver until the market value reaches $1.29 per ounce. The Silver Purchase Act of 1934 brought embarrassment. to silvCl' standard countries, especially China, whose economic life was disturbed by the monetar.y policy of the United States. As a result China was also forced to tamper with her currency system as a mcasure of protection and avoid wholesale bankruptcy of her finan'c)al institutions. The abandonment of the gold standard by the United States in Apl路il, 1983, and the devaluation of the dollar in Janual路y, 1934, to 59.06 per cent of its old value have profound effects on the currency system of the Philippines. With the Gold Reserve Act of 1934 and the fixing of th gold content of the

THE COMMERCIAL

fel'cnt American banks which are members of the Federal Reserve System arc supposed also to have pl'ofitted by $23,862,780, but in spite of the l'ecornmcmdation of Pres ident Roosevelt tha t the Philippines be credited with t his amount as a matter of equity, Congress is now t rying to r epeal the granting of the profit. Tn spite of these disadvantages OUI' currency system is impregnabl y strong. The reserves for the currency are not only adequate but also excessive far beyond the requ irements of the currency law. The inflation movement in America today which is con:;idered inevitable with t he payment of the !lol<lier's bonus a s well as the continued government spending upon priVate enterprises a nd private in~ vestments which amounted to 3- 1/2 01' 4 billion doilal's in a single year is a prospect that is of great concern to the Philippines, The inflation in America will also mean inflati\n in the Philippines, The close linking of the peso with the dollar will also make inflation in t he P hilip»i,nes a vital problem, And while it is proceeding at an increasing pace in the United S tates, we have not done anything ~'et to meet the s ituation locally, It appears that the only alternative for the Phil~ ippines to avoid the disadvantages of inflation in the United States is to divorce the peso from the dollar. But this power is not available t o the Philippine Commonwea lth just now, and unl ess sOlne adjustments are made, the Phili»pines is bound to suffer. H(lw could we bring about an increase in ch'cu~ lation? Tn the first pla.ce we could use the excess in the exchange standard fu nd in buying silver at present low value. A t the present price of silver, the bullion content of a silve!.; peso could be purchased fol' j ifty ccnlavos, so that a large profit could be derived if we decide to coin silver pesos and issue treasury certificutps backed by t.hese new silver coins. 1£ the above procedure is not t'aken adVantage of because it !s considered too risky as the price of s ilvc)' Illay fluctuate violently t hus causi ng specuhltion later on, there is also another way of increasing the ci r culation. The excess in the e)(change standard fund coul d be used as a basis for issuing treasury certificates by merely tra nsferring them to the tl'casul'Y certificate fund. It is also permissible by OUI' currency law to transfel' the excess in the exchange standard fund to the general fund and made avn ilable for general expenditures by the Government.

its'

INDUSTRIAL MANUAL If the gold profit is credited to the Philippine Govel'llment, this windfall amounting to P47,750,OOO could be made available for general expenditUres. It would indeed be unwi se to keep this amount deposited in the United States and lie idle although interest is paid by the depository banks, The circulation could be increased by this amount, a nd if judiciously released, it would allay a great deal the econom ic depression t ha t is expected to follo w, after t he export tax has begun to be imposed , 'l' he present embarrassments of the currency system of the Philippines like the abandonment of t he gClld exchange standard a nd the consequent dejlreciation (I( the currency in sympathy with the dollar with which the peso is linked, the inability to collect the gold profit, and t he pl'ospect of further loss due to the further devaluation of the dollar, make it highly advisable for the Commonwealth Government to consider ser iously whether it is satisfied with the present situation in which our currency is placed. W hen gn'ater currency autonom'y is granted to the Commonwealth, one of the most important aspects of our currency problem that has to be considered is the advisability of revaluation of the peso. By Act 4199 we have correspondingly revalued the peso as t o conform with the dollar at the ratio of '2 to I, Doubts have been raised as to whether the unit of value in the Philippines is high for a 1'elativ~ly pOOl' country. Revaluation of the peso to onl>-half of its present, theoretical gold content 01' making t he ratio of the peso with the dollar 4 to 1 would have it": advantages to the nation, For one t hing it will stimulnte OU!' export trade ('specially wi th countries outside thE:! United States, 'rhe revaluation of the peso to 50 pel' cent of its present value will yield a profit to the Commonwealth gover nment of over 50 million pesos just as the United States made a high profit in the devabation of the dollar, I t is almost impossible to talk about cuneney reform without bringing into the discussion the problem of a rentrnl bank. Every country need" a capable and responsible conservator of its currency system, a fun ctioll that is best performed by a central bank. The Insular Trezsury has performed this Ilu ty for the Philippines with the aid of the government depositories in the United States, but in all modern countries, much of this function of the national treasury has been taken over by a centrnl bank. A central bank is the most logical and

PHILIPPINES most effective institution of adjusting the supply of credit Bnd CU1Tcncy to the demands of trade and industry, increasing the supply of the means of payment to meet the demands of brisk trade and reducing' the supply when business is slack. Speculative excesses both in securities and commodities could be contl'olled best by a central bank. The inadequacy of the Insular Treasury to manage the currency s~'stem to meet the demands of a given situation is inherent in the organization .

In cnse we decide to inflate the currcncy, the Treasurv could easily accomplish the end in view; but

in ~ase the need for nn increased circulation has pnl'$ed, a dcflativn or n dC('l'case in the amount oi money circulation could not be effected through the T r easury. The centr a! blink could very well perforlll this function of deflation.

In countl'ies which have l'esorted to exchange control as a measure to protect their currency and as a Illeasure of controlling imports, the central bank has been the most logical institution of regulating the sale or the allocation of exchange, Exchange control as a measure of cul't'enc~' management or a meaSllre of trade contl'ol may be taitl'n advant,lg'e of b~' the Philippines in the futul'e and the Insular Tl'eagllry would be inadequate to execute the necessary transaction. In a pianned society such as we ar.! intending to make the Philippines under the lcadership of the National Economic Council, a ccntral bank is an in,dis pensable institution as all agency of the Ins ular Gov('l'nmcnt to manage the: currency and to perforlll other duties to execute its financial policies.

THE N TIONAL PRODUCE EXCHANGE' Its Function and Methods of Operation REATED BY AN ACT OF THE NA TIONAL ASSEMBLY, planned and directed by the government, and rounded out in form by the ideas and suggestions of tl'3despeople in the various commoditY. fields, the National Produce E xchange of the Philippines is now ready to fulfill the needs and l'equirements of a basieally agricultural nation, The question fore-

most in the minds of producers of various Ph ilippine commodities is, " H ow wil! the National Produce Exchange fill our requirements, and how can we use it to advantage?"

THE SIMPLEST and most di r ect answer would be that this Exchange establishes a common meeting gl'ound no t only fol' producers but also for dealers, wholesalers, exporters and manufacturers buying and selling agricultural products, It serves ns an open market where producers 01' dealers can seU to the highest of many bidders and where buyers can buy from the lowest of many sellers. In all communities, a centralized a nd organized market has always wnded to facilitate the exchange of produce, A bettel' marketing system arises Il'om the fact that when traders congl'egate at the same place daily and at regular hourly intel'vals they become better acquainted with each other's ideas and extent of responsibility. Furthermore, and regulations as members of a finun cinlly and morally responsible Exchange, all who denl with them are assu r ed against the 01'â&#x20AC;˘ /I ~ C()I')<CI',O 11"" '('''''', , l cli"l1

"'''''''11'''

dinary risks that they would have to meet in an unorganized, makeshift marketing place, EvetT member of the Exchange is bound by definite rules which requil'e on hi s part strict honesty and integrity as well as financial soundness and responsibility in all his transnctions in the Exchange. The Exchange rules and regulations al'e for the protection of those employing the facilities of the Exchange, One can be sure t hat when a producer engages nn Exchange broker to handle his orders, he, the producer, ig assurcd of a squ:we deal because of the fact that the Exchange broker is controlled by strict laws and rules that govern his actions in the execution of these ordelÂˇS. How TO TRADE IN THE EXCHANGE Sales and pun'hnscs of commoditie:;; in the National P roducc Exchange are made through its members, who represent the sellers and buyers on the floc)' of t he Excha,,~e a s broker", So if a pro-

THE COMMERCIAL

ducel" 01' dealer desires to sell through the Exchange, he should get in touch with a memher to sell the commodity for him. Those who want to buy com~ modi ties through the Exchange should do likewise. From the trading floor of the Exchange telephone Jines branch out to the offices of all the members where orders to buy or sell commodities may he received from all 路 parts of the country. A number of memhers also have connections with buyers in the United States and in Europe from which orders may be received by cablc, and so a producer selling his products in the Exchange may find there both local and foreign buyers bidding for his products. All orders received in the offices of the members arc immediately relayed b)' telephone to the Exchange floor where telephone clerks receive the orders and deliver them instantly for execu,tion to the brokers gathered around the pit durin ~rading hours. BRoKEn's COMMISSION The Exchange brokers., charge a commission of 1 /2 of I per cent of the value of the commodities ~f)ld. In other words, one w\o sells or buys PI,OOO worth of rice or sugar throu,h the Exchange will pay a commis~ion of P5. \ TilE OLD MARKETING

SYSTE~l

Under the old system, when a producer has a quantity of produce to sell, he has to deal usually with rural middlemen 01' buying agents who buy without any J'eal competition, and, as a result, the producer does not receive the benefits of an open competitive market and is generally paid lower than the true market price. In the absence of an org anized market, producers or dealers may also contact b~' telephone 9thers whom they think may be interested in their offers or meet with members of their trade at a customary place where perchance they may find someone with wl.om to make a trade. 1'he usual result is tl,at untrue market prices are established and interested tl'aders find it difficult to value the market correctly. A CENTRAL MARKET

The National Produce Exchange, through its facilities, does awa~' with such haphazard method of buying and selling by providing an open, centralized and organized market for agricultural commodities, and by keeping all its operations open to public scrutiny. Members of the Exchange, reo ceiving orders to buy and sell produce, make their

INDUSTRIAL MANUAL bids and offers on the Exchange floor by open outcr,y. Secrecy in trading is a misdemeanor and is punishable by suspension or expulsion. All transactions are made available to the public, and, at all times, interested dealers in produce may call upon a memher of the Exchange for a current quotation and in that way be sure of the true worth of his commodity. In short, the function of the National Produce Exchange is to serve as a central market that reo flects at all times the true actual value and condition of the market for various agricultural commodities. An organized market of this type is only influenced by the legitimate factors of supply and demand. A producer conld at all times obtain a fail' picture of the status of his commodity and know at what nominal price, at least, he could market his pI'oduce either at once or at some future month . The time for making the sale may be for a Sj'lot 01' current delivery or for a future delivery that ma~' be as late as thirteen months. KINDS OF TRANSACTIONS IN 'I'HE EXCHANGE

There arc two general kinds of transactions in the Exchange: the "spot" or cash transactions, and the "~utures" transactions. The spot or cash sales call for immediate delivery of the commodity offered for sale. The commodity must be deposited in a warehouse available for inspection by the buyer and for delivery in not less than three days from the date of the sale. Selling "spots" is done by samples. The samples are laid out on one side of the Exchange for the inspection by the buyers, and the sale is made to the highest bidder. The products offered for sale should be properly graded and classified to enable buyers to make bids corresponding to the classes of each commodity, and the lots sold must be strictly in accordance with sample);. Producers or sellers having commodities which they wish to sell in the spot market of the Exchange should get in touch either with members of the Exchange to sell for them or with the office of the Exchange. Future transactions are made not on the basis of samples as in the case of spots but on standardized grades. The seller contracts to deliver a certain quantity of produce at a futUre time at a stipulated price. One of the purposes of the National PI'oduce Exchange is to make the method of trading in commodities as simple as is humanly possible. To some people, a commodity futures

PHILIPPINES market implies an intricate system of operation requiring much study and understanding. A commodity futures market is real1~' nothing more than a simple mnrketing plnce with the exception that provision is also made for delivery of a commodity at a future datt'o I LLUSTltATION OF A PRODUCER SELLING FUTURES

To ilIu!;tmte a sale fOI· future delivery by a producer, we may take, for instance, a sugar grower. This grower knows that during the milling season h .... will have aVJ>.ilable, say one thOusand piC'uls of sugar for sale. Let us presume, judging from his experience ill previous years, that thi.,s producer is aware as early as August that he will have approximately this amount to market, and he also knows that he will be ready to offer it for sale in January of the ':{ollowing year. Since future dl'liveries are being traded in on the National Produce Exchange, he will he able to ('all his hroker on the Ex('hange flooL· ane ask what the price is for Sougar for delivery in JanualY. If the f'luota tion suits him he can give hJs brokl'l' an or{!er to sell one thousand piculs, or 'four sugar contracts (the Exchange sugnr contract \mit is 250 piculs).

After the producer's foul" sugal· contracts are sold, he merely sits back and waits for the delivery date in January to arrive, at which time he makes the actual delivery. What has happened? Instead of being forced to wait until his crop is harvested and milled, he was able to effect the sale of his sugar at a price that happened to be high enough even while the crop was still unharvested. He also found a ready market, for the scope of the Exchange takes in all angles of the sugar trade. lC the sugal· had been in a warehouse, all that the producer would h ave had to do would have been to present his broker with the quedan as evidence that the sugar was available for delivery. If' the sugar had still been in the fields, the produeer would have been required to deposit with the broker about 10 % of the gross value of the sugar as margin. That is, if he had sold the thousand picul s, or four contmcts, through the bl·oker at P8 per pieul, he would have deposited P800 which is 105'0 of PS,OOO 01' the value of the sold sugal' f01" future delivery on this Exchange. The same procedure applies to rice and other commodities which \vill soon take their place on the Exehange through representative standard contracts. Among tht'lse will be copra, coconut oil,

PAorllLAO MUNICIPAL BUILI)[NO-PAOUILAO, TAYABA$

T HE COMMERCIAL & INDUST R[AL MANUAL hemp and tobacco. Two contract forms that are now in operation, i. e., sugar and rice, will soon be issued. A stud~' of the:;c will show their value to the trade.

sales ta~ is met except by t he last seller who makes the actual physical delivery of the pr oducts called fo r in the contract.

SALES T.\x EXE~IPTION

I n ordel' that this Exchange can successfully accomplish the purposes for which it is being ':!stab· lished, it is e::;sential that producers, dealers, and buyers of agl'icultural comlllodi~ies all over the countr y become familial' with its function and me· thods of operation. It is with this end in view that the a bOVe! iniol'mation is being published a n d oth er information will be published from ti me to t ime giving s pecifications pertinent to t he operation of the Exchange. I nquiries from t he trades a n d from the general publ ic an:! cordia]])' invited t ogether with a ny suggestions 01' helpful criticisms t hat ma~' be offered.

Sales and resales of commodities in the Na· tionai Produce Exchange which arc not accompanied with actual physical delivery of t.he products sold arc exempt from the merchants' sales tax in accordance wi th Section 7 of Commonwealth Act No. 192. Even if t here is actual physical delivery if the seller is himself the producer of the commodities he is selling ill the EXchange, t.he transaction is exempted by the law hom the sales tax. I n t he case of "futures" which !lu\~' pass from hand to han d before ~hc contra(."is al'e fill:'l1!~' consunlmat(ld, no

INQUIIUES I NVITED

PHILIPPINE ANNUAL EXPOSITION Desig ned Origina lly}or a National Fun and Froli c Fiest a, t h is Event a com bination of Carnival Exposition

now

HE P HI LIPPINE EX P OSI T ION is th irty years old t his ,yeal·. Star ed in 1907 as t he Manila Carnival, the exposition has been held every year , except in 1918 when it was suspended owing to the entry of the U n ited States in the world war, and has become a r ecogn ized institution in the life of Manila and the P hilipp ines. Or i ginall~' designed a s a fun and frolic fiesta, cater ing solely to the ligh ter sUe of life, the annual festiva l soon developed into a combi nation carnival and exposit ion. In recent yea rs, t he car n iva l, kee ping pace with t h e march of p rogress a n d the ever g r owin g t.r end toward gi vi ng mor e em phasis to the economic development of the Philippines, has pJaced g reater stress on the ex positio n feat ur e of the f estival.

AS A RESULT of this transition, the boud of directors of the fOl'lller Philippi ne Carnival Associ a· tion, voted to change its n ame and now the organ· ization is known as the Philippine Exposition, I nc. and the annual fest.ivul is called the P hilippine EXllosition. Because of its unique pos ition and its specific purposes, the Philipp ine Exposition, I nc. has en· joyed the support not only of the P hilipp ine gov· ernment but of the highest officials of the govern· ment and some of the most prominent business men in j\·l anila. The lis t of officers follows:

/ffJl/()ra rlJ l'rt,iJ~ ,d,-The I'rcaidc"t of the Com mo"wClI[th 01 the I'hilil,pines ""t! the United SlntCII Wllh Corumisl!iollcr. IfI"'9r~rlJ l'ice·Prui,/tll,_'I'he "iCl'"l'r~s ident 01 tho Common. wealth; the Spenker of the Nntionol Ancmh ly; tl .., qomm/lndcrin_Chief of the AH,"lie Fleet . U. S. Now)'; the Commnndmo; Genem!. Philippiue Departm en t, U. S. Army; the )I,,),or of )III"i[n. and the Prc.sidcnt of th e "funicip"[ Bonrd. Pr~~""",'-)Innucl I•. Qne1oll. /lird l 'icr· I'r"i,I~"t- H on. "iccnte Sinl;son_Ene"rnDci{,n. &(,,,,(1 \ ·icc-l'rt.idtlll-)[r. 1'1005. J. Wolff E.'uc .. ,ire Commit/fe-Mr. Thol. J . Wolff. ehairman; H all . Felipe Ducll eD",i n", Jr ... and H all. Jorge B . \'''rl:'' ., "'emh<lr~. DirtcMr Gtnrral-Ar~()'>lo :-:. Luz.

With the exception of two or t hree years in the early period of the carnival and again this year, when the festiva l was held on the Sunken Gardens outside the old bastions of Manila's h is· toric Walled City, the carnival has been held a nnuall~' on BU1'nham Green facin·; the Old Luneta .

PHILIPPINES

Occupying an area of from twelve to fifteen aCI'i!S, the City of Lights rises as if by magic and for sixteen days and nights becomes the center of life

inces, government bm'eaus and private commercial and industrial firms exhibit their wares and products,

in Manila.

In recent years a feature of the festival which has attracted the attention of thousands of carnival patrons has been the Horticultural Exposition, This feature occupies a large portion of the exposition grounds in itself and is run directly by the Department of Agriculture and Commerce, The bureaus of plant industry, animal industry and commerce take up most of the Horticultural Exposition. The plant industl'y bureau shows miniature model farms, complete with growing plants <'Ind trees and model fal'lll homes, fully furnished, to give the aveL'age Filipino farme r an idea of how he should manage his farm and how he should live on it. T he animal industry bureau puts on a livestock exhibit and runs a monstcr pavilion in which preserved products are shown, The bureau of commerce conducts its own paVilions giving a com prehensive illusil'ution of the different pha ses of its work.

The iun and frolic phase of the festival is featured by the numerous side-shows that line the Midway or main avenue through the carnival city and the various rides that dot the Midway. After inspecting the shows and enjoying the rides, those who find pleasure in dancing go to the monster open-ail' auditorium where an excellent orchestra plays nightly and thousands may dance on the vast floor at oncc. In the auditorium the biggest functions of the c31'nival, such a s the coronation of the queen of the fiesta and special balls and pageants, take place. The morc serious or utilitarian phase of the annual festival is offered by the Commercial and lndustrinl Fail', the l'\ro\,incial exhibits and the Horticultural Show, These features , usually located together in one special section of the carnival city, give the visitor a kaleidoscopic view of the progress achieved in industrial, commercial and ngl'icultural entel'pl'ises, of the various products of agriculture and industry \fr om the different provinces of the archipelago an,d of the work accomplished by the various depurttnents, bureaus and offices of the government, Huge pavilions line the Commercial and Industtial Fail' grounds, in which the different prov-

All these multifariou s phases of the Manila Exposition take months of preparation and entail considerable expense, but the results so far have fully justified the work and expense, The growing emphasis placed on the utilitarian side of the Exposition, without sacrifici ng much of the fun and frolic phase. has met with hearty response.

STOCK TR ADING ' nm

NDER AEGIS OF THE COMMONWEAVI'H, the past year has witnes!>ed a remat'kable !mpl'Ovement of genet;al economic conditions in ti'\e Philip.pines, Part~cularly outstanding has been the growth and expans\on of the mini nil: indust路ry, resuWng in widcspl'ead interest in the shares market not only on the part of the local trading public, but of Foreign investors al; well. In anticipation of an even further gt'owth of this market, the Manila Stock Exchange has undeltaken a program of enlargement and modernization which witl eventuate in an Exchange rivaUing the most up to elate in existence abroad, New Ll\lalters in which are installed a ticker system and board quotations service pcrmitting the handling of several times the present number of issues traded in, with inCI'eased efficiency and dispatch, will be ready by f\lat'ch 15th, These quarters, g reatly enlarged over the present ones. will be air-conditioned, and otherwise provided with ever y model'll device to speed up and improve the efficienc.)路 of the service which traders render to their customers, so that the public will be furnished with ra pid and accurate floor tl'ading information,

THE COMMERCIAL & INDUSTRIAL MANUAL

An indication of the growth of the market is provided by the comparison of the figu res showing num ber of shares traded, and their value. in the years 1935 and 1936. The first several months of 1937 already give augury of an even g reater volume of business be路 ing handlC'd this year. To a great mnny people, mining stocks usually is a~ sociated only with precious metal mining, but

the Philippines is r ich not only in the precious metals. We h ave vast wealth in base minel'als as well, which are commercia lly just as pr ofitable as

the former. The developmen t of these and other valuable natm'st resources of the country, under the Commonwealth, gives promise of a bright prospect for f u tu re commercial a nd economic success.

THE MANILA STOCK EXCHANGE LTHOUGH THE Manila Stock Exchange n ow deals chiefly in mining stocks, it was not 01'On August to, 1937, a group of p::ominent Manila busigani~ed for that l)UrpOSe only. nessm ll- W. Eric Little, G. W. Mackay, J. J. Russell, W. P. Elliot, and F. W. Waltefieldwer e g ranted articles of incorporation fo r Manila's first stock exchange. Prior to this time ther e wer e no facilities for trading in securities, either local or foreig n, in Manila. All negotiations resulted f l om personal cont.....cts. Commissions varied from one to five per cent, with no established rates. l\Iany issues never came into public view because .:;f the lack of a public trading center. The Manila Stock Exchange thus came into being to f ill a longfelt need. It was a non-sto\k corporation, and the by-laws stated that all funds were to be used for

the furtherance of the pU I'!)oses of the Exchange. R ,\ PID GROWTJi

The whole purpose of tho Manila Stock Exchange is one of cooperation of members in behalf of service to the public, which means clients of the various members of the Exchange. Numerous rules were adopted at the beginning to insure stabiiity and impartiality, and these are added to from time to time as new condition" in the trading wOl'ld develop. The first qual路tel's of t he Exchange were in the offices of Hail', Little, and Picornell, in the Insular Life Building. H ere trading was carried on in local secu rities, mostly sugar, copra, and hemp entel'lll'ises, and to some extent, in foreign securi ties. The enter prise p l'ospel'ed f r om the fi r st, and has had a steady growth ever since. In August, 1933 it was found necessary to move into larger quarters, in the de los Reyes Building (now the Soriano Building). In October of the same year t he Exchange was moved to the Escolta, where it remained until its present move on Juan Luna. Mining' stocks first came into prominence in t he Philippines, about the middle of 1933, when the ra i ~e in the price of gold from $20.67 to $35 an

ounce gave a t remendous imJletus to mining the worla over. The few producing mines here at once assumed g r eat importance to the public, and mining investments attracted much money. Since that time mining has experienced a remarkable g r owth . According to l'eports mineral resources of the Philip]lines are immense, and have hardly been tapped. Sever a l hundred new mining companies have been organized dUring the past few yeal路S. As t he wodc of exploring various mineral claims all over the Islands has progressed, there has naturally been considerable trad ing in stocks of t he interested companies. EXCHANGE SEATS Now WORTH 170 T IMES 1927 PRICE The value of a seat on the Manila Stock Exchange is now 170 times the original price, the records reveal. Seats originally sold for P500 each; the highest price ever paid fo r a seat was over P85,700, in November, 1936. The increase in value has resulted from the rapid jump in trading activities. As the Exchange has prospered, and busine s~ increased, the price of seats naturally were more valuable.

PHILIPPINES When the Exchange was organized, it had 10 memberli, each of whom paid P500 for his seat. In March, 1932, a seat was sold for Pl,500j in March, 1933, for P2,OOOj in October, 1933, for P3.000j in March, 1934, for 1'5,000; in November, 1935, for PI5,5{10; in August, 1936, for P79,000; later in the same month, for P80,OOO, in October, 1936, for PR2,60('l; and in November, 1936, for P85.700. The increased membership to 45 seats was ef路 fected by an amendment of the constitution recently approved at a special meeting of the members by unanimous vote. STOOK QUOTATiONS INC, H ANDLE SPECIAL FACI LITIES

The SIJecial communications facilities required for modcrn stockmarket operations hel'e will be supplied by a new organization, The Stock Quot.atirms ~ompany, Tnc. 'l'his comJlnl~y was formed for the ex.p.l路I'~!'> pm' pose of !:e~ng members of t he Manila Stoel. Rxchange, their c)ients and oth~I路!'.

One of the main functions of the company will be the opE'l'Rtion of a complete t ickel' system from the main floor of the Manila Stock Exchange. Enri'lue Santamal'ia, presidcnt of the Manila Stock Exchange, is also president of Stock Quol;.atiom. A. C. Hall is treasurer, and J. G. Eisenberg is !'ecretRl'y and general manager. The incorpora_ tors, beRid<,s the officers, are S. N. Picornell, J. Camahort. G. W. J'l.Iackay, and Max Kummer. SPEED

A~:D

ACCURACY

ARE

FUNDAMENTAI.S

The trading- pro<'Cdm'c in the new quarters of Manila Stocle Exchans-e embraces a uniq'Jc and flexib]e combination of trading post and board operation methods. t.h~

Hoard tJ'adin,t has obvious advantages hecause of its simplicity, but as the market grows in volume, it natnr!llly becomes Illore complex, and this >netbod

boorv

"16M!

COMMUNICATIONS

J IOL

10..... 0 lLIIOI..Tllt Co

THE COMMERCIAL & INDUSTRIAL MANUAL

of opera tion can no longer cope efficiently with the requirements of speedy operation. The board of governors of the Manila Slock Exchange has spent many months in study of methods which have been adopted by lal'ger Exchanges elsewhere and pl'oved satisfactory. It was decided that the expansion of the market, with its indications of future growth, necessitated the introduction of trading post methods. These have been applied in the new premises in a modified form, so as not to introduce too sudden and drastic a change, with the intention of progressing to full trading post operation methods in the neal' future. D etails of the s~'stem of operation, as explained by J. G. Eisenbel'J!:', Technical Adviser to Exchange, who planned and supervised its installation, follow: Two SECTIONS 'l'hE main tradi g-floo1' is divided into two sections, facing in opposite directions from the middle of the flool'. There are foul' lower trading boards, t\~O on each side of the floor, on which are marked up the trader's openifions. Board attendants take the sales contracts f~om traders and adjust the board figures, showing Sales, Bid and Asked Prices, etc. The sale!'> slips l'e then dropped into conveniently located slots feeding into the ticker room, where the transaction i\ put on the ticker tape. ln addition to the ticker transmission a telephone board reporting service is maintained which conveys additional trading information to all member's offices simultaneously. HISTORY

In 1927 a group of Manila business men held several informal gatherings and discussed the necessity of a Manila Stock Exchange. The members of the group included W. E. Little, G. W. Mackay, J. J. Russell, W. P. G. Elliot, and F. W. Wakefield. Eventually they incorporated the Manila Stock Exchange on August 10, 1937. It was around the middle of 1933 that mining stocks be~an to come into greater prominence in the Philippines, this being due to the increase of the price of goid from $20.67 to $35.00 an ounce. The producing mines assumed greater importance and mining investments attl'acted a p:l'cnt deal of public support. As time has gone on, mining expansion and the expansion of the Manila Stock Exchange has been (me continuous story of mounting importance in the public mind. The Manila Stork Exchange was for-

tunate in that it already had six years of pl'actical experience in the handling of securities n;Jd had established a reputation beyond the set!s. N!!turalIy, t he mining companies sought listing at once. The last twelve month5 have been the heu\'iest period in the histol'Y of the r.路lanila Stock Exehong<:!. A total volume of 978,88'.1,669 shares were traded, the estimated value being "422,506,986.00. On January 1, 1936 there were twenty members of the exchange. On Jar.ual'Y 1, Hl37 the number had incrcased to twenty six, 2nd by April 1, 1937, to twenty nine. Originally there were onl~' ten seats on the exchange 2nd it has been found necessary to amend the by-laws and constitution so that thel'l~ is now provided !>laces for forty-five mcmbel路s. NATIONAL PRODUCE EXCHANGE THE ESTABLISHMENT OF A PRODUCE EXCHANGE in the Philippines is a long-felt need to facilitate trading in agricultul'<,.1 commodities, according to Eulogio Rodriguez, Secretary of Agricultul'e and Commerce and chairman ex-officio of the J;Il'ationa! Produce Exchange. The Exchange was c)'eated by Act 192 of the National Assembly and its organization was authorized by President Quezon. (j)ther members of the Board of govel'nol's of the Exchange besides Secretary Rodriguez who were appointed by Pl'esident Quezon arc; Assemblyman Manuel Roxas, Cornelio Balmaceda, Director of Commerce; Dr. Victor Buencamino, general manager of the National Rice and Corn Corporation, and Alfredo Yatco, collector of internal revenue. Mr. Rodriguez is made chairman ex-officio by virtue of the provisions of the act creating the Exchange in his capacity as secretary of agriculture and commet路ce. The National Produce Exchange has not been organized for the purpose of m~king profit, fixing prices, 01' making transactions in trade as an organized body. It is merely a convenient market place in regulating trade. It will serve as a center of reliable information for sellers "and buyers of commodities, and promote uniformity of commercial usages and fix standards for gmdes of commodities as the basis fol'l trading. CENTRAL EXCHANGE WITH THE ADOPTION OF THE BY-LAWS, BY THE STOCKHOLDERS OF THE CENTRAL EXCHANGE of the Philippines, at their first gen-

i'£Dr.IU. " " D, (inlli? 'lE - L Il.w . .~I-\ 1 PHIUPPINES eral meeting, held at the iUanila Hotel on November 2, 193(; the company began to function. The board of directors is composed of Messrs.

J orge L . Al'unetu, Rafael Corpus, Arcndio Dial'., Ramon J. Fernandez, Francis BurtOIl Hanison, George R. Harvey, Leonard C. Mooro, Enrique J. C. i'tIontilla, Claro M. Recto, Jose E. Romero, and Manuel U l'quico. At the meeting of the board of direct:)l'S following the stockholders meeting, the followir.g officers

were chosen:

1\[1'.

Francis Bur ton Ha:Tison, chair-

man of the Board of Directors; Mr. Jorge L. A1'a-

neta, President; Mr. Leonard C. Moore, Vice-President; MI', Rafael Corpus, Treasurel' and Judge

George R. Harvey, Secretary.

The ExecutiVe Com-

mittee is composed of Mes!;l"s. Francis Burton Hal"rison, Jose E. Rome\'o and Arcadio Diaz. To establish the Stock Exchange Department, the Central Exchange ,?f the P hilippines has secured the services of Mr. G. W, Greene of tht! firm of Payne & Company of Hongkong,

Mr, Greene was born in China <1I1d finished his education at the University of North Carolina. H is familiarity with the Orient and his varied experience in business which embraces sccu l'ities trading, exchange, stock exchange and dealing in commodities, equips him adm irably for the requirements of the Central Exchange, The Central Exchange of the Philippincs is not limited, as the name might imply to the opel'alion of a stock exchange solely. Its broad charter enables it to engage in a wide range of vcntures most important of which is the opemtion of a Produce Exchange, the need of which has been long felt. Recently enacted legislation, especially favored by P resident Quezon, makes possible fOl' the fh'st time, the opcration of a produce exchange in the Philippincs. Present plans for the Central E:-;:change, include a stock exchange department, a produce exchange dellal'tmellt, securities trading dellartment and a department fo\' mineral exploration, development and promotion.

INDUSTRIAL RESEARCHES OF THE GOVERNMENT '

ROSPERITY OJ.<~ a eountl·y depend:;, in general, upon the growth of industl'ies. The P hilippines are rich in natural resources but comparatively few industries have been well

established. For a number of years t he Bu reau of Science has been conducting research experiments with the idea of developing the natural resources of the Philippines. Basic data suggesting prospects for the promotion of numerous industries have been obtained and published in the E'hilippine Journal of Science. Thi s tech nical infOl'lllation is available to the public, In some instances the laboratory investigations have been developed commercially and now there are factories that make paints, varnishes, cement, and other industrial pl'oducts from !:aw materials. IN LI NE W ITH THE POLI CY of the Commonwealth GO\'el'nment, the Bureau of Science is laying specit!.l emphasis on industrial research and the establishment of small semi-commercial plants. These units are designed to demonstrate the manufacture of various pr oducts from local raw materials. Such expel'imental factol'ies are a great help in developing industries for they show t he public exactly how raw matel"ials are processed into fin_ • BI./ ,\ . S.

'\"OO~~LF.S,

Dirtc/o., Bur... u D/

Sc;~"c"

ished industrial products. For the Government to take the initiative in such enterprises will greatly facilitate the establishment of industries. In order to help balance trade relations between the United States and the Philippines it is planned to industrialize some 10cr.1 raw materials, such as tnn nillg extract, quinine, and other Ill'oducts, that arc im ported into the United States. Experiments in the field of cel'nmics have beell successful and \'arious commercial products such as glass, roofing tiles, and potter~' glasses have been

THE COMMERCIAL

made from local raw materials. Investigations on the manufacture of glass from bagasse ash have been successfully concluded. A semi-colored glass plant was operated continuously during the past nine months. Thousands of glass bottles have been manufactured in the Bureau and the seles of these articles have demonstrated that bottles can be manufactured locally and that there is a ready, lucrative market for this industry. Several local concerns arc undertaking the manufacture of bottles on a commercial scale. Experiments on the manufacture of roofing tiles from 10c2.\ clays were successful and these nre J10W produced on a semicommercial scale prcpamtol'Y to being developed into an industry. Researches on medicinal plants have shown that good yields q,f quinine, or totaquina, may be obtained from cinchona bark. Totaquina is a new standard preparation containing the total alkaloids of cinchona. It has been recommended by the com~ mittee of the health organization of the League of Nations for the treatment of malaria populations. Totaquina can be produce.d at a cost much less than that of ordinary comm rcial quinine. An ex~ peri mental factor.y for the lllfnufacture of quinine preparation, totaquina, is now in operation. This

INDUSTRlAL MANUAL medicinal product wlll be used by the government to save thousands of lives among the people living in regions infested with malal'ia. A semi-commercial plant for the manufacture of leather and tanning extract (cutch) is also in operation. This plant is equipped with modem machinery, the first of this kind to be introduced in the Philippines. This experimental plant should help to improve the local tanning industry and facilitate t.he development of a profitable export trade in tanning extract. Various commercial products such as rayon, cellophane, lacquers, toilet articles, etc" a re now made from ccJlulose. In line with this present tt'end l"(~searches on cellulose and wood pulp were continued. Results have shown that pulp can be produced commercially from a kind of bamboo known as "boho". Cellulose experiments will be continued with thc aim of making plastics and other commercial products. Research work on fiber board has passed the labol.,lUtory stage and the finishing touches is being given on a pilot plant for the manufacture of fiber boards,

MUNICIPAL GO\,BRNMBNT BUILDING, JARO, ILOILO PRO\'INCB

PH1Ll PPINES The Fish nnd Game division of the Bureau has been very influential in developing fish culture in the Philippines. Quite a number of new fishponds have been cstabli!>hcd and new varieties of fish have been imported from iOl'cign countries for l'Cstocking the Philippine lakes and rivers. Stations for the cultivation and preservation of fish have been established in various districts and modern methods for deep SI!U fishing have been introduced. This has resulted in greatly increasing the daily catch thus reducing the price of fish sold in the markets. For the protection and conservation of fish and game, studies have bccn carried out in order that proper laws and regulations may be enacted. An exper imental, semi-commercial, canning unit has been installed in Estancia, Iloilo. It is now in a position to carryon work to fi nd the future of the eanning industry in the P hilippines. T he Industrial Committee of the Department of Agriculture and Commerce of which the Director of the Bureau of Science is Chairman, submitted promotional sheets covering the following indu stries: I. ;\lanuffteturo of dllY produd... Z. ;\lftnulft~tu rQ of cotten Yllrn. 3. Sad, making frem abn~lI. Olagu e)' and Olber fibera. 4. Growing 01 deni!. 5. Growing of ~illrhoRft. 0. Dairy prQlh,rts.

1'8p~r monuillctur~.

nn~'''"

I.oom.

This Committee recommended for development the follo wing industrial p rojects: 1. 2. 3. 4.

,\1I1DUIIlNII'C of canned lI:ood~ IIml t ill rane. EstablialUQcnt of fiBhing indllurice and development of fl._berice. :'>Ianuraeturll of .odium b)'droxide, !odium clI.bonate an d ~odium bicllrbonllt e. ManufllclUrO 01 t!l.IIIIinQ: oxtracta and leath er. J{ c6ning 01 gold.

Numerous industr ial rcsearches are in progress but among the more important of them may be mentioned the insecticide derris, medicinal marine algae, researches on vegetable oils, annatto dye, for est pl'oduets (Phi lippine resins), commercial cellulose, water-pI'ooil fabrics and building boards, the tannin con tent of oak barks and the effects of molds on barks and tanning liquors. The propel' utilization of our agricultural products as well as of OUt' natural resources would require the establishment of technical industries. No nation can go very far in economic prosperity and general progl'ess by being content only to produce raw materials. The modern tendency among progressiVe nations is to utilize their raw materials and elaborate them as much as possible into finish ed products to meet domestic demands and for exports abroad. In this manner bettel' prices can be obtained and at the same time technical industries are built u p in which the masses of the people may fi n d lucrative employment. This policy tends to evolve a vi r ile a nd pl'ogl'essive nation built upon a solid economic structure.

ECONOMIC TENDENCIES IN THE FAR EAST ' ISTO RY OF the Far Eastern countries is the h istory of the world; their problem is a world pl oblcm. Histol'ians and scientists teU us that the seat of allcient civilization was in the Fal' East, somewhere in China. In the cycle of commercial history, the Oriental period is the oldcst on record. Since the first contact between the West nn the East, 'Vestern powel'S have always been involved all important questiollS that have come up in the Orient. Thc In'oblem~ of the Far East have not arisen from the conflicts of purel~' Oriental intcresls Illone, but also f rom the Eastern revolt again~t We~tern imperialistic policies.

THERE is no doubt that Japan, Cllim:., and Asiatic Russia vie with one another for supremacy in the Far Ellst. They also have their internal dissensions to settle some way; Russia and J apan have been nnturnl and hereditnrlY enemies. The

outcome of the battle was viewed by European and other powers with alarm. When Japan blocked the Russian advance in the Far East by her victory over the latter in the famous Russo-JulHlIlese War of 1904, she had demon strated to the world t hnt the Westel'llel' was not invincible after nil. That

THE COMMERCIAL & INDUSTRIAL MANUAL

ser ved notice to t he world that Japan had to be re<:koned with in future wars. Japan used 'Vestern wea pons to defeat Russia. Many a time that nation had been charged as an imitator. She was not e)(uctly a bl ind imitator. She had mcrely assimilated as much of foreig n ideas and institutions ns. she needed. Once she was convinced that the Western methods were more effecth'c and powerful than her own, she was quick to adopt them and improvc them to suit her con~ di tions. In this way she had t hc advantage over China, which had for centur ies poscd as a teacher, not a le:wnel'. WESTERN

Il'\"FLUENCE

THE

FAR

EAST

One significant phase of the economic history of the Far East is the manner in which the two great Ol"ientnl nat1o..ns, China and Japan, had accepted t he coming ~ the Westerncr. China accepted his advent gr udgingly, so t ha t he was confined to ports where his entry had to be made by force of arms. Because of his resort to weapons and his frequent ellcounter with the natives which endcd in bloodshed most of the \me, he was called a \ " barbarian."

On t he other hand, Japan greeted t he foreigner wholeheartedly and t hrew open her doors to foreign comports by Admiral Perry in 1854, Japan has progressed by leaps and bounds. Commerce sprang up almost as soon as the Perry treaty had been signed. Once an apt pupil of t he facile peoples of the Far East, Japan has organized her industr~路, commerce, and finance along modern lines. Notwithstanding t he fact that she is lar gel' in area and older in civilization, and has been in contact with Western powers s ince the early years of the Christian era, China has been progressing very slowly. Although she has positively resisted both Eastern and Weste:-n imperialism by means of sk illfu l diplomacy and an intolerant nationalism, most of her economic instit.utions have fallen into the hands of foreigners to control. Seventy-five per centum of t he total population of China lives undcr agrarian economy. The other Far Eastern nations are not divorced f r om Western influence. Most of them are colonies, tel'l"itories, possessions, and dependencies of 'Vestern powers whose policies may be summarized as follows:

PHILIPPINES ~tt

;

To accu ... p.edDu .. ,,,,,,<e III tnad,,:

f~ ~":.:b!~'b ~\.~rb~a'!..'7r

pohey: ~~) To cre!l.'e coh... iul bues on d, .. border of Cbiull; ~e} To curobliah ~DhcrO)ll of influence .. cljo;o'n£: coloni,,1 po.aelliiona: .. "d (0 T~.. ~i"~~lc ,,·;th es c!> Ilther in the ,encrtlilltraits of th~

The relationship between the East and the West have been those of subonlination a nd imperialism, resulting in the creation of a temper of Western supcriol'ity that has provoked an Eastern inferiorit.y complex. Of cour se the effect is only psychological, and the idea has no basis in fnct. The fault is ours if we allow ou r selves to enterta in that false notion. The Japanese, a highly sensitive people, could 1I0t understand why the Orientals should cultivate a feeling of inferiority since all men are born equal. Afte,' liberating herself from the yoke of foreign pressure, she has turned he,' attention to the attainment of security and promotion of he, own existence through industrialization and expansion of hel' international trade, China and the rest of the Far Eastern nations are endeavoring to. emancipate themselves from impe"ialistic enslavement, FAR EASTERN

RROBLEMS

Under the p,'escmt circum~ances, the problems of the Far East could not be solved by the Oriental Nations without the coopemtioll of the Western powers, One of these problems is the economic subjugation of China, Before tal'iff autonomy was granted in H12!), China was depr.ived of one of her natural rights to l'aise revenue and adjust hel' finances on the basis of her inconlC, Aiter years of persistent pressure, of unremitwnt inconsideration, o[ studied disregard of Chinese susceptibilities, the great powers finally decided to grant Ohina her tariff autonomy. This act of the fOl:cign "})ow~rs marked a new era in the illtel'nationai relations of China. A new eCOllomic tendency has r e:lUlted from it. It shows to what e~tent the strangle-hold of the foreigners would prevail over local interests and thc inalicnable rights of the Orientals. It announces the new policy of foreign powers with respect to their territories :lnd interests in the Far East. Extmterritoriality i'emains a problem in China. I t can only be IIbolished by the foreign powers; but this they hesitate to do for fear of commercial and financial embal"l"assmcnt. Being s~ured by treaties. the abolition of extraterritoriality would be impossible to obtain without the acquiescence of all contracting perties. Japan has clone away with this

unusual pl"ivilege which came to an end in 1899, the same yeer that tariff autonomy was partially restored in Japan. Complete tariff autonomy was established in Japan in I!)I I. This was a memorable concession in the sense that it was the first t ime in history that an Asiatic country was admitted to the circle of Occidental powers on the basis of full equality. It was a notable achievement fo,' Japanese patriotism and ability. Another problem of the Far East at present arises from the economic distress of Japan. This country is poor in natm'al resources, being deficient in some of the necessary raw materials, notab~y iron, petroleum, and cotton. Her chief assets arc her favorable geogmphic situation and the ability of her people, She has ceased to be exclusively agricultural, and toda.y she is aspiring to be a leader in the commel'cial and manufacturing fields in the Far East and 011'12 of the economic powers of the world. The one l)rOspect of immediate relief to the present economic dis tress o[ Japan is the development of her foreign commerce. In this respect she has twq inhe,'ent advantages, namely, cheap labor and skilled workmen. Low-pl"iced prodUcts are undoubtedly Japan's a sset in international trade, be· cause she always find s rcady buyers for he r cheap .l!oods. Unfortunately, under the nationalistic tendencies in foreign counh'ies, the lowe l' :h", prices of her commoditics are the gl"elltel" the banicr s to their entry in foreign markets, High tariii5. quotas, import lic.!nses, and monopoly control arlO' employed by hel" competitors in orders to restrict 01" prevent the importati ons of Japanese goods . Un l::s;.:; .Ja pan produces less of the so-called cheap compet iti ve al:ticies. avoids the use of methods that an: liabl e to make Jorcign nations suspicious. lIlItag onistic, and jealous, and modiJies existing customs du ties iUld other impo,·t res trict.ions opemtiv*l in that countl·Y. !:ihe cannot e.:pect to promote hN fo r eig n trade or expand her foreign markets . She must secure the cooperlltion of foreign nations, promote cordial relations among them, avoid rltsh :1nd ruinous eompetition, accord full attention to reci procal treaties or agrcements, and do away with her imperialistic attitude or policy, JlIpan must court the sympathy and cooperation of other powers. because without their aid, either as markets for her products or as sources of raw materials fOl' her manufacturing industries, ~he would be rendered economically impotent,

AYAL A LIBTIA RY

100

THE COMMERCIAL & INDUSTRIAL MANUAL

There is no doubt that Japan is the equal of any other big power in matters of armaments and defense. In war, Japan would be able to do a great deal of initial damage to the interests of any Western power in the Far East, but she would be unable to sustain a prolonged campaign if her enemy would ~mploy economic weapons. By the simple closing of their ports to Japanese commerce, Great Britain or the United States could dictate Japanese policy at any time. The loss of her trade with any onc of t hose two powers would be too much for Japan to risk. This is the reason why she cannot afford to declare war against anyone of them. The mounting population of Japan is also a problem connected with bel' foreign trade. Japan must import raw materials fol' her factories so that there will be a continuous supply of labor for her workmen, and food and other necessities for her teeming population. The manufactured ar ticles must be exported in order to pay for her imports. Until a solution could be found to stop the increase of, or to reduce, the pOp'ulation, which even if successful could not be done in less than a decade, Japan has to expand her foreign 'trade. ROLE OF THE PHILIPPINES IN THE AFFAIRS OF THE FAR EI\ST The policy of Japan in the Far East has been misunderstood. When the head of the Japanese parliamentary mission which visited the Philippines recently declared that an industrial Japan and an agricultural Philippines could not but develop a hade that would be of great advantage to both nations, a storm of protest was immcdiately hea:r:d from many sections in this country, especially the press. A stronger statement than that was once made by a President of the United States during the early :years of American administration in connection with the free entry of Philippine products into the United States, saying that the Philippines should be encouraged to produce agricultural crops that would not compete with American Inoducts. There is no danger to statements of that kind because economic events in the Philippines have shown that it is impossible for the United States to keep the Philippines in perpetual agricultural bondage, notwithstanding the political relation that binds them. The Philippines cannot remain an agricultural countl'Y all the time. While we are still passing through the agricultural stage of our economic development, there are positive signs of the ap-

proach of the industrial degree of economic advance_ ment. Just as industrialization has been bound to be the solution to Japan's economic problems, and with it the development of her international trade, so the promotion of Philippine ill.dustries and foreign trade will occupy the front page of our economic progress. The Philippines is now on the threshold of an independent existence. During the period of tran4 sition, she must maintain the stahility of her government and finances, and the prosperity of her commerce and industries. If no changes would be made of the economic provisions of the TydingsMcDuffie Law, the Philippines will surely lose a great portion of her trade with the United States. The loss of the American market would natural~y cause the Philippines to look for new markets somewhere. On account of her pl'opinquity to China, Japan, and other Oriental countries, the Philippine products. From the end of the second century of the Christian era to the coming of the Spaniards, successive Hindu-Malayan empires, China, and Japan had established outposts or partially gOVCllned the Philippines fOll trade purposes. Even aital' the Spaniards had acquired the Philippines Chinese, Malayan, and Japanese traders continued caUing at Philippine ports to sell or barter their warcs, taking Philippine products along with them when they returned to their respective countries. Today, the merchants of Japan, China, British East Indies, Dutch East Indies, Hongkong, French East Indies, and Siam still find it profitable to trade with the Filipinos. Last year, 1935, 15.10 per cen4 tum of the total foreign trade of the Philippines was with the Far Eastern countries. The United States took 72 per centum and the European and other foreign countries 12.90 per centum of the total foreign trade of the Philippines. It will be seen, therefore, that the foreign trade of t he Philippines with the Far Eastern countries was greater than that with other foreign countries outside of t he United States. What, then, should be the commercial policy of the Philippines toward her Oriental neighbors? Since it has been stated at the outset that the problem of the Far East is a world problem, the general foreign trade policy of the Philippines could ver,y well be applied to the Far East. Fortunately. world conditions are now improving, so that if right policies are pursued, the achievement of a more liberal worldwide commercial policy is f easible

PHfLIPPlNES in the not {nr distant futUI'C. The whole world is clamoring for cooperation of all trnding countries, and this in turn requires of every nation both a domestic and an international IU'ogram. On the domestic side, the nation's chief concern will be to promote the maximum amount of production that can be consumed at home and sold abroad, thereby giving the fullest employment of labor. In the foreign field, the objective is a libel'lll commercial policy of fair trade methods and practices, and friendJ)f relations. To attain the desired end, we should enlist the assistance and cooperation of local business men, financiers, agriculturists, industrialists, :\nd economists in the work of effectively developing

101

and industrializing our natural resources, in pro· moting and financing our foreign trade, and in breaking do~vn artificial barriers put in the way of world commerce. Of course our legislators and political leaders should also extend a lending hand to the solution of the prcsent problem. The policy should be pursued mutually and universally, so that it will not only result in our own or our country's favor but will r edound also to the benefit of all others as well, s ince only by restoring the world can individual countries hope to remain economi· cally sound. The objective is the general amelioration of the wol'ld situation.

OUR PROGRAM OF PROVINCIAL AND MUNICIPAL DEVELOPMENT* WELL-CONSIDERED PROGRAM of g row th 'and development for our local political units is essential to the task of building up the Commonwealth, These units constitute the basic foundation of tHe nation, As such they have an important role to play in the national scheme of develoJilment. We have embarkel uI?on huge national enterprises, setting aside enormous sums of money for this purpose in OUl; effort to stabilize our national economic !ife, It is necessary that proper attention should now be given to the participation of the Ill'ovinces, municipalities and chartered cities in lay:ng down the foundations of the new nation, Our t!ndeavor should, therciore, he to strengthen these. local institutions as supporting units of the national

~rructure,

FROM the point of view of the Executive Department which exercises supervision and control over these local institutions, I am asked to give an idca of the ju'ogram for their development. At the outset it would be best to define the relation between the National Government and the local governments that we may appraise intelligently the l>roblems of each as necessary counterparts, The Commonwealth of the Philippines is a unitarian ~ov ernment, the provinces, municipalities and chartered cities being merely subdivi sions thereof, Although givcn cOI'porate powel's for purposes of aclministr:lw tive convunience, these subdivisions do not e>:ist in· dependently of the central government. They are the local agencics of the State in the perfo,'manl'C' of State functions. And the responsibilities of P;OVw ernment are shared alike by the National Govern• 811 Ho~, ELP IDIO QVIR.NO. Sftrt/(I'II of I~" [,,1"';0 •.

ment and by these political subdivisions and in ac· cordance with the policies that may be established by the former, REFORM I N OUR F I SCAL SYSTEM But the provinces and municipalities are primarily expected to extend the benefits, comforts and conveniences of established government in their r espective jurisdictions. Commensul"ate with t his responsibility, they should be allowed adequate means to render the local services in the. most efficient manner, Theirs is still the grent opportunity to im· prove substantially their economic and financial conditions and those of their inhabitants, An examination of our provincial a nd municipal laws l'eveals the fact that our provinces and municipalities are political entities of enumerated powers, possessing only those. expr essly granted or necessarily implied from the exprcssed powers. This is not conducive

102

THE COMMERCIAL & INDUSTR IAL MANUAL

to their ra p id growt.h and development and is large. ly responsible for theil' failure in many instances to respond to the lllan y pressing needs of their inhabitants. In our aim to make them morc self-sustaining and thereby less dependent upon the National Government for the support of their local administration, a gradual revision ot" our

pl"e~ent

fiscal system

is consider ed. The present handicaps to their finau cia! stability ShOllld be removed. It will be recalled that our fiscal government was originally established, principally to raise funds for the support of

the Insular Government. While it is true that under thi~ system the provinces and municipalities are allowed to keep for themselves 40 % of the total collections, yet t heil' yearly share is always limited to what they actually rcceived in 1909, As a r esult. of this limitation, the local governments have not at all been benefited by the increased collections made since 1909, This lias compelled the provinces and municipalities to depend considerably on I nsular aid, On the other hand, it has also afforded the Insula r Government an OPpo\'tunit.y to adopt a paternalistic attitude towards the local government, While in some cases, th~ pl'ovinces and municipalities became merely tax collectors of the I nsular Government, in others, they were ,'el'itable dependencies and not

coordinai.ing units of the Insular Government, A sitlmtion has thus been created whcreby a g l'eat number of our provincial and municipal units which should be the strongest instrumentality for the successful carrying out of national policies did not receive the propel' attention, A well-balanced 13ystem of national development would require a readjustment of the distribution of the benefits and burdens and not only a systematic effort to incl'ellse national wealth and illcome by the respective political units, Neither the National Government nor the local governments should b~ allowed to continue in state of artificiality with regards to their financial relations with The latter should be afforded adeeach othel', quate means of meeting their inel'easing res ponsibilities, Cognizant of their necessity, the National Assembly has approved a meaSUl'e which is now pend. ing apPl'oval by the PI'esident, cOllverting that portion of the ceduln t.'lX which at present accrues to the road a nd bridge fund into the municipal school fund, for t he pur pose of helping solve the school cr is i ~ in the municipalities, AI!>o, the lllunicipali. ties will receive increased participation in the motol' vehicle gasoline taxes the rates of which are being

AMPJIITHEATRE AT 13...0\110, BENGlIET

PHlLIPPINES increased in accordance with measures which will soon be converted into law. And to provide flexi· bility in the disposition of local fun ds tantamount to a consolidation thereof, the Assembly also approved a measure authorizing the transfer from onc fund to another, of the various special provincial fu nds, in order to cover deficiencies in any provincial fund. hIPROVE~IENT OF RURAL LIFE

I bave undertaken upon my assumption of office as head of the Department of the Interior the activities of town-plarul'ing, 7.onification, development of home-lots and the revitalization of community as-

semblies.

I feel that we should not only encourage

the growth of civic pride and stimulate each locality to pursue the policy of self-su fficiency , but we should also bring to t he far-flung barrios and country-farms the benciits, conlforts and conveniences that the government at r esent extends to the 'cit~· and town dwellers, rn line with this policy, I lost no opportunity to r ecommend that distant communitics which meet the rcquireme,nts to organize them-

10)

selves into new and independent municipalities be converted into towns. Thus, two new municipalities, one in Lanao and another in Camarines Sur, have recently been established, and about a dozen more, mostly in Mindanao, are being considered for conver sion into new municipalities through administrative action, With si milar recommendation, there hav(: also been established by legislative action four cities, namely, Cebu, Iloilo, Zambnanga ane. Davao with thei r respective charters. To summarize, I consider t h at a sound program for provincial and municipal governments should embrace (1) the granting of increased opportunities to the provinces ami municipalities in order to ena ble them to fu ll y develop their respective communities in accordance with their local l'equirements and necessities; (2 ) the revision of our present fiscal system with a view to making the local governments more self-sustaini ng and less dependent upon the Insular Government; and (3) t he adoption of a vigOl"OUS and aggressive policy of improving rural life to the end tha t more barrios are eQverted into towns, and more towns into cities.

MY VISION OF A GREA;TER MANILA · F ONE WERE to write on the progreS:i Legaspi's "h'"oble and Ever Loyal City of Manila" has attained dUring the brief span of time between the waning days of the Spanish Regime and the present, he wOllld be writing volumes of untold gaill'~ in structural , engin~ring, commercial, edu-

cational and spiritua l realms,-testimonials of an unprecedented progress that would favorabl y and admirably compare with that attained by any other city in the Far East. Verily, one acquainted with Manila of Old Spanish times would now be a total stra nger, foreigner in this city of ours tradition:J.ily culled "the Peur! of the Orient". And ,yet, great and unpr~edcllted though l\.o[anila's pro· E:; ress may have been the fact is that "with all that has al r eady been done, much still r emains to be done."

THE PAST NEED 'I'D BE DWELT UPON AT LENGTH. It is now histo)·y. The present slleaks for itself. The futul·e could only be visioned with bright hopes. It is the common eXllerience of all nations in t he wodd to find with the ushering in of a new era in their existence, new problems of local, national and even international magnitude. New activities de· mand their attention, The Philippines in general and the City of Manila in particular have not eo;· caped that experience with the advent of the n ew ~ove.rnme n t of the Commonwealth. Luckil y , these , BII JIIAN l' OUIM8, Mllllor, crIll 0/ M Il'u"lll.

problems have, however, beell promptly met as fast as they presented themselves and adequate. solu tio ns found to satisfactorily solve them. New activities were planned and undertaken and, before we knew it, we had adapted our selves to our new government -a decidedly forward step toward the ultimate realization of our aspiration to enjoy a free and inde· pendent national existence. Even the changes wrought in the government have becn so smooth and gradual as to escape the attention of the less scruti nizi ng, and government officials and employees have been spared the experience of finding themselves veritable square pegs in r ound holes.

, 104

THE COMMERC rAL & INDUSTRIAL MANUA L

JUdging from the improvements it have been the fortune of Manila residen ts to realize even during the very brief period from the inauguration of the Commonwealth Government, the seeming ly inevitable conclusion would be that Manila has escaped the disastrous effects concomittnnt with financial depres. sion. Stately edifices and imposing private l'csidentinl buildings which contribute in no mean way to the beautification of t.he city continue to rise in every llook and cornel' of Man ila. During the fir st semester of 1936, no less than 1'3,554,740.00 have gone to make for the city's building boom. Despite the meagerness of the resources at the dislJOsal of the city authorities, the work on street construction and improvement has been carried on unh[lmpered [lnd, as fast as mor e funds became available, old thoroughfares have been improved and new ones opened not only t o make t he city look its best, but also to take care 01 the ever aggravating traffic problem that is Manila!s. The fact that the city's program of street cOllstrUftioll and improvement hu!; not kept pace with the inc\easing transportation facilities is lamentable indeed, but if to this were added the fact that Manila has the fortune or misfortune, t!.s the case may be, of havin~the Pasig River cross it at its very heart, thus provitling a good means of

wllter transportation fOl路 conmlCrcinl purposes hut at the same time rendering its a lready difficult traffic problem more difficult still, no wide stretch of the imagination is necessary to visualize the sad experience conf]"Qnting the city authorities. The need for more bridges spanning the Pasig River to insure the fl路ec and uninterrupted flow of trnffic f r om north to south and vice-versa has been a long-felt need, the Sta. Cruz, Jones and Ayala bridges not being adequate to take care of the vehicles daily crossing the River. The city authorities have been only too well aware of this fact. Effort to raise funds thru the issuance of government bonds for the construction of more bridges across the Pasig River has been started several ,years ago, even beforo the city's traffic became a problem as difficult of solution as it is at present. However, with the new traffic plans now under experiment and witi} the completion of the Ayala Bridge annex as well as the Ariegui, San Gregorio and Tanduay bridges, it may not be long before Manila may temporarily be r elieved of its problem of traffic congestion, especially in its commercial and business districts. Among the great problems that confront the city author ities, the yearly school crisis cannot escape kttention. With the City Government suffer-

PHILIPPINES jog a continuous fall in its revenues from year to year and the city's school population continuousLy taking the upwnrd trend, no cffort need be exerted to figul'n out what a perplexing problem the city nuthoritics hnve to Iace every year the schools open in June. And yet, like a winding stream which always finds an outlet, the school problem always meets with a satisfactory solution. Under Sec. 2444 (d) of the Revised Administrative Code of 1917, the City of Manila is in duty bound to provide free elementary education to its children of school age. To comply with this provision alone, the city would have to pl'ovide for the education of approximately 70,000 school childt'cn each year, the figure contilIually rising as the population increases. If it were also eonsidered that the City Government has taken unto itself the duty of maintaining no less than four high schools with a total yearly enrolment of approxinlately 10,000 students, it will readily be seen what a drain on the city coffers the maintenanee of educat.ional facilities in the City of Manila constitutes. In fact, this activity alone absorbs about 32% or approximatelY' one-third, of the city's annual income. The school situation dUring the cal'ly pal't of 1936 has been such that the city authorities f inally felt the necessity of imposing a graduated scale of tuition fees upon all secondary school 3tudents whose pa.ents al'e in a position to pay the same as embodied in City Ordin~nce No. 2376. It was only with the adoption of this measul'e that all ~econdary school students who are bona fide l'e!"idents of the City of :i\fanila could be assured of admission into the city public secondary schools. Indeed, Manila, like aU other cities, is bound to expand. It is destined to grow. By the natUl'al law of propagation, it ",ill not be long when it will ieel the need of solving greatel' social pl'oblems res u~ting from overcrowding. Evcntually, too, a portion of the discontented laboring masses from the neighboring towns and provinces will seek a menacing raiuge in Manila. And, perhaps, a greatel' number \viU cast their lot in looking for a brighter outlook of life in this metropolis. The consequential results are obvious. Even at this time the acute finnncial depl'ession which has worked havoc all over the world has brought with it to the Philippines a great social Added to the I'l'oblem,- thnt of unemployment. City of Manila's IC!tion of unfol'tunntes are mnny Illore who find riisappointment in employment in the numernus factories and business houses in the

105

city. On its part, the City Government is doing all it can with what little it has at its disposal by undertaking various public work projects which necessarily rcquire the employment of more laborers. A city is not great because it has a great population. It is not gl'eat because it has a large terl'itol'y either, if under its folds are thousands of orphans and underfed children, thousands of social outcasts and numberless victims of social injustice. A city is not great if it is the center of social unrest and the very home of misery and sufferings. It is not great if it does not hold dear human life; if it neglects the living conditions of the majority of its inhabitants. A city is not great, even if it were materially dch, if it denies to its people the boon of human kindness and sidesteps the duty of social protection. It is only great when its people cnn live in perfect pence and contentment. Greater r..Ianila demands an adequate and efficient police protective service, with every resident being insured of his personal safety, the safety of his property and the recognition of the inviolability of his crnstitutional righ ts. It should have protection against public calamities, especially conflagrations, which may be prevented by propel' pl'ecautions and controlled by an efficient fire protective SCl;vice. ~t must have carefully laid out sanitary faci~ lities to the care of the health of its residents. It must have ,vide and properly maintained thoroughfares, boulevards, gardens and plazas and should not lag behind in providing its people with modern conveniences. It should have more bridges across the Pasig River to solve the recul'l'ing traffic problems. It should provide for adequate educational institutions, including industrial-factory schools, to keep abreast with the present needs. I think of :J. city of Manila where evelU'thing ne<:essary and worth while in life is amply provided for; a city that responds to the pulse of humanitarianism; a city that recognizes the principles of socilll justice. I dream of a city of l\lanila-great because there arc neither slums nor "back streets": great because it gives aid and protection to the undernourished and underfed children who would form part of the bulwark of an independent Philippine republic; great because it strives to minimize suffering and lInl'est. I see a city of Manila where everybody is happy; where the alarming toll of infant mortality has been reduced to the bottom. Presently, the numbel' of out' social workers in Manila is not ~ I,f(icient to cope with actual condi-

106

THE COMMERCIAL

tions. And if the future is to be served, we need more civic spirited men and women who should be willing to cooperate in looking after the welfare of those who by l'eason of circumstances beyond their control are unable to help themselves. The government needs their support. Wit.h the estabJishmt'nt of the Commonwealth Government and under the guidance of its able leadership, the city of Manila hopes to solve its major problems more effectively, More adequate playgrounds and parks should be maintained in order to provide the vast majority with places of reC!'cation and rest. Morc social and health centers should be organized to reach every needy home. Gl'eater attention should be given to the needs of the unemployed, the unfortunate and the poor. Adult education should be extended and community meet· ings should be eneour ged in order that social sta· bility may be assured. Lastly, it must be our deep concern that mere teehni~~lities in the enforcement of our laws may not nullify the beneficent inten· tion ane spirit for which they have been enact(:.d, :md thereby enable our citizens to enjoy freedom and happinc!;s.

INDUSTRIAL MANUAL A greater city of. Manila so conceived, indeed. is the pricelcss legacy this generation can give th the future. MANILA: THE CAPITAL OF THE PHILIPPINE

COMMONWEALTH MANILA is the gateway to the Orient. Nature and the course of historical events in bringing the Occident and Ori1!nt togethet· have created here monumental evidence of cooperation between the people of the east and the west. Freed by western science from dilapidation, mosquitos and tropical di· senses, Maniln shines today with twentieth-century !>plendor. 'rhe modern city surroull'ds the medieval Intramul"os with its quaint Spanish buildings and na rrow stl·~ts where its massive still active chur· ches, impart an atmosphere of the spiritual, a cons· ciousness of the imprint of religion which since the beginnings of the early teachings of the Spanish have permeated the life of the Filipintl people-the only Christian Oriental nation. The enthusiasm of the leaders of the Common· wealth is closely linked with the consciousness of many years of romantic history and Christian in· fluence, symbolized in the innermost corners of an· cient Spaniah.style churches, the most outstandmg

CoNCIIPCION MUN10flAL BUILDINO

PHILIPPINES of which is the 50.yc~n-.olcl massive Church of St. Augustine, which with other churches scattered plentiful!..v throughout the country. have withstood the countless earthquak('s which have rocked and wl'c('k路 cd the whole Al"chipclago. In comparison with the ruins of plnces of worship in other Ol"iental countries, these ChUl"ches of the Philippines confirm the permanency and zealous faith lIpon which the training and development of the Filipino people is established, and would seem to point to the possible future destiny of the Philippine nation in its role ns coming lenders of the Orientnl peoples of Asia.

When the Spanianis sailed into :M anila Bay in 1670 under the leadership of Martin de Goiti, on Legaspi's or dcrs, they found a settlement on the southeI'n hanks of the Pa sig River fortified and ruled by Rajamora. ~\CI'Of;S the river was another town, named Tondo, the strong-hold of another ruler named Rajamatanda. At t he beginning of the l'cventccnth century, aftcr the Spanish conquest of Luzon , small villages of nepa huts located the region where now stands the ~Iodel'll meh'opolis of Manila, and Tondo, which is located some two miles north of the Pasig River remains today the thickest c'-Ilter of the population of :'olanilal With the growth

107

of industrial projects and the incrcase of population it was inevitable that country people should settle down in or near Manila. The walled city was limited in space and proved to be too hot during the summer months, and so the wealthier Spanish creoles, mestizos and natives maintained country man!'ions in the suburbs, mainly in rustic villages border_ ing on the banks or estuaries of the Pasig River such as San Miguel, Santa Mesa, San Juan, Pandacan, Paco and Santa Ana. As Manila is situated on a bay, expansion was limited to only three points of the conrpnss. The dense population in Tondo continued to increase as the l'esidents of Old Manila I~eeded raw pr{lclucts and foodstuffs. Thus the section north and northeast of the Walled City of Tondo became the commercial section during the Spanish and continued to be so \mtil the present day. The land to the east and the south became residential suburbs. Ii'ollowing the seW ing of the Spaniards, in 15"74, a roaming band of Chinese pirates with 70 ships, 2,000 men and a Japanese genera! l"amsacked the newly-founded city, but were driven out. In 1590, a new Governor anived from Spain, and construction of t he permanent ramparts of the present Fort

ROMAN CATUOI.IC CUUIIClI-BARASAOIN, BULACAN PROVlNCB-WDBIIB THB CoNSTITUTION REPUBLIC" WAS RATIPl6D IN 1898

TItB fiRST "PIlILlPP1N6

108

THE COMMERCIAL & INDUSTRIAL MANUAL

Santiago and the now headquarters of the United States Army were begun. In 1603, the Chinese teS"~ecl out the new fortification, and again in 1609 the fortification was rebuilt. At the southern end of the west wall there still remains a bastion which was constructed in 1644, which in 1762 cnme under heavy fire from thirteen British men-oi-war, who retained the city for a year or morc, but evacuated the city at the s igning of the Treaty of Paris. In 1797, another grant from the Spanish crown made it possible to again reconstruct the fortification, the gate); of which wcre closed daily from 11 p. m. to 4 n. m. and up to seventy years ago, agains t attaeks of Moro pirates. In 1898, Admiral Dewey sailed for the PhiJippines and won a dccisive victory over the Spanish naval forces in the Battle of Manila Bay. and Manila surrendered to the American military forces and shortJy thereafter the entire Philippine Archipelago paS'5ed under the control of the United States, and new Manila was created. THE WAÂŁLED CITY INTRAMUROS, 01' th~ Walled City, is the original Spanish city establisheCi. in 1570, which to this day is the historical setting for ecclesiastical Manil a , containing the oldest churches, the cathedral, con-

vents, books, bells, city gates, and general institutional activities started by the early Spanish churchfolk. A wide moat formerly surrounded the city and crossed by drawbridges which since the American occupation have been filled in for sanitary reasons and is now u sed as an athletic ground and public parl{. MALACANANC PALACE MALACANANG is a Tagalog wOl'd meaning ro ~ iYal residence, and was thereforc used by the Spanish Governors in rcfer~nce to the hcadquarters of the reprcsentatives of the Spanish King. An earthquake destroyed the original residence of the Spanish Governors which was within the Walled City in 1863, and the present site of Malacaiiang became the pel'mancmt Spanish residence, with its spacious gal'dens bordering on the Pasig River, and is now the residence of His Excellency, Manuel L . Quezon, President of the Philippines. Its reception halls are spacious and some of the rarest examples of native art adorn the walls. Among the paintings is Jua n Luna's graphic portraiture of the treaty of Legaspi with the native chief Lakandola: The Blood Pact. In recent ;years a modern building for the u se of the executive of-

EXECUTIVE Bun.olNG MAl-A CA NANO-MANILA

109

PHILIPPINES fices has been erected near the President's palace. Under Governor General Dwight F. Davis, a new wing has been annexed to the Palace pl'oper. This provided the palace with living qual'ters for dis路 tinguished visitors and added greatly to the architectuml beauty of the institution. FORT SANTIAGO

AT THE NORTRWEST CORNER of the walled city Fort Santiago is now occupied as the headqua rters of the United States Army in the Philippines. was built on the site of the original fort of Rajah Soliman, the Moslem foundel' of !\1nyniiarl. In 1570 when the city was captured, the site was occupied by a crude log fOI't, built as a protection against invasions by warlike Moros and savages. The present structure began in 1582, shows but little external change. The inner quadrangle was OIree the court of the military government of Spain. Many arc the traditions of its dark eells, dungeons and chambers of torture during those days. In the building now occupied by the Army Military Intelligence Department is the I'oom in which Dr. Jose Ruul, the Filipino National Hero was imprisoned before his execution.

SAN JUAN DE DIOS HOS\>lTAL was built first of nipa and bamboo in 1577 for the care of lepers who in 1003 were moved elsewhere when the original building was d('stroyed by fire in 1593. Rebuilt in 1593 it suffered many disasters until 1782 when the cornerstone of the present building was laid. By royal deCI'ee of March 1656 the hospital' was placed under the direction of the religious order whose name it bears. BUREAU OF EDUCATION the corner of Calle Cabildo and Recoletos opposite the Recoletos Church is an old Spanish building formerly the Spanish mint, and is now the headquarters of the Public Scool system of the Philippines. AYUNTAMIENTO is located on Plaza McKinley. It was originally erected for the residence of the cabildo or city mayor and his officials but now houslls the offices of the Department Secl'etaries, the Executive bureau of the Philippine Government and the Division of Archives. The cornerstone dated January 31, 1735, is to the right of the main stairway in the present building, whieh was built since 1863 after the complete destruction of the previous structure. Until recently the House of Representatives held its sessions in Marble Hall, the wall of

which bears carvings and paintings of historical interest, and at the entrance is the statue of Juan Sebastian Eleano, who completed the first voyage around the world after the death of Magellan. To either side of the statue hang marble tablets hearing the names of the first representatives elected to the Philippine Assembly convened in this building October, 1907. The Division of Archives contains many rare and priceless public documents, some dating to the time of Magellan and Legaspi. ER~t1TA AND MALATE DISTRICT

'fHE LUNETA in Spanish times was the execution ground for political prisoners, among whom was the Filipino patt'iot, surgeon and novelist, Dr. Jose Rizal (1861.1896,), to whom a monument has been erected in the spot where he fell before a firing squad of Spanish sol diers. Burnh&m Green, a large reclaimed area to the seaward of the Luneta was named after the architect who planned the city of Manila aftel' the American occupation. Dewey Boulevard extends in a southern direction from the Luneta to the city limits, along the surging breakwater of Ma路 nila Bay. PHILIPPINE GENERAL HOSPITAL occupies extensive and beautiful grounds on Taft Avenue between Padre Faul'a and Hen路an. It is one of the largest hospitals in the Far East, and built 1908-1910. In connection with the hospital is a large and efficient t raining school for nurses and internes. THE OBSERVATORY is the Central office of the Philippine Weather Bureau, which was founded in 1695 by the J esuit Fathers and has been in continuous operation ever since. It is one of the most moli('rn meteorological and astronomical institutions in the World. The founder and director was Fr. Frederic Faul'a, after whom the street on which it stands was named. The present head, Fr. Selga succeeded Fr. Jose Algue who perfected the baro..cyclometer which fortells the il!.tensity and force of approaching storms, earthquakes and toJphoons. The Observatory is still directed by espeeially trained Je路 suits and supported by an arrangement with the Philippine Government. ATENEO DE MAN ILA is a Jesuit Educational institution in the building as the Observatory on Calle Padre Faum. Founded in 1695 by the Jesuit Or. del' it has been responsible for the many illustrious men, The Filipino National Hero, Dr. Jose Rizal was rai sed and taught under the paternal care of the

TH E COMMERCIAL & IN DUSTRIAL MANUA L

Jesuits in the Ateneo de Manila. Until August 13, 1932 t,he institution had its building in the walled city. But a great conflagration has destroyed its historic cOlTidol's and classrooms and museum. LEGISLATIVE BUILDING is at the intersection of Taft A venue and Calle P. Burgos; is on(' of the most imposing building in the Fur East. It was completed in July 1926 at a cost of 1'4,000,000 and occupied for the first time at the opening of the legislative session of that year. T he offices of t he P hilippine Commonwealth officials arc contained under its extensive and beautifully curved rQof~. ~ternberg Hospital, a few hundred yards nor th CMt of the Legislative Buildi ng is the Army gener al hospital for treatment of military patients and their relatives, Built sometime between 1855-1860 it was reconstructed .a nd repaired aftcr t he earthquake of J8G3, O~gil1al1y a one story structure during the Spanish r6fime, the up per story has been aclried with the Amel'h;.an occupation, Th e present name was given in honor of Surgeon General Ste!'nberg of distinguished I'e~\'d, MEHAN GARDEN is a park of about 10 acres opposite the walled city, whi~ was originally created as a botanical garden by Governor Norzagaray in

GESEIt.\L Vr!!w, PORT OF LEGASPI-ALBA\'

September 185G, I t was na med for John Mehan, an American Officer, who assisted in the development of thp present system of city parks, Attached to the garden is t.he Metropolitan theatre, a millionpeso edifice devoted to art and the stage, BUREAU OF POSTS BU1LDING is almost as large and imposing as the Legislative Bu ilding is where Post Office of the Philippi nes situated on the southern bank of the Pasig River very neal' the Walled City, Constl'ucted at a cost of a few million pesos it now houses an efficient mailing department and other branchcs in the Bureau of P osts, R I ZA L MEIHORIA L ST AD IUlI;J was constructed for the Xth Far Eastern Olym pics, A huge baseball field whcre Babe Ruth , Gomez, Fox a n d other America n Big L eaguers have displa.yed their skill to the great del ight of forty th ou san d spectators; a welleqnipped tl'ack and field where Metcalf, Ander son, Cunningham and the best th at t he Orient h a ve ever p roduced havo sprin ted and th r ew t he javelin; a huge and up-to-date swimming pool with all the modern puraphel'nalia; a gigan tic ten nis stadiu m with a movable I'oof and convertible ground fl oor which can be changed into a ball-room 01' a basketball CQurt 01' boxing arena,

P IlOVINCE MAYON VOJ,CANO I N Til!! BAC"QIlOUSD

PHILIPPINES

111

PrllLIPPINE CHARTERED CITIES AND

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THEIR MA yons

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Alit.a,t<ll:: •. Teleda.o Ro),,",, D .. lnynn .•. . ........•.••.•...... Pio Marti .. ea Bat/II" a.. Perfecto CondOll Bauan. Conrodo Buendia C .. IR"" . Zoilo E.pi noan C .. lnt.allan IgM cia F. Concepcion Cuencn •. Alluatin H ""tIln Ibnao •• Aurelio Hernandez Lomer)' • Aurelio S. Atienl" Lian. HHnrion Lejnno Li pR ..•...............•. Poblo L. Torrtll Lobo •. Tomn, Vi\Jnnuovn Mobini. .......• Julinn Bnutiatn Mnlvor .. Bcnito L,wiste M .. tnnsnn!o;nhoy . Vicente Mntnllllllih nll Nn~Ullb" ....•.......•. Cirinco AI\"nru R ...ario. f.'rone;"co Knrr eoD S ..n J ""e. Fernnnd o Aguila San Junn .. :'oli,ucl Lopez &n Luis . Bernardo MOII"'''o Santo Tom~ •. :'oln.;mo Mntv .. r Tnnl. .• . . . . .. .. .•. •. AllalOn OrO&:l Tal Wo)' .• . . . . •. .. . . •. •. ..... .•. Cn rlna L. Mendon Tnna,,,,n. Antonio J. DimaYII,o. Tn)'I" ............ , . . ...•• JU lin C. Roye.t Tul'. Vicente CalinGunu

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112

T HE COMMERCIAL & INDUSTRIAL MAN UAL

D .. ollI)·OIl . n"liLil"m . 8a(ul\II .. BiIM.. C"lape. Cflndiin~

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, \";(CIO MiKrino Miguel Lnguitno

Duorn .. Garcin-Hernandez ..

ViOlorino Berlin Pedro n. GI,lendc. i'\[n:limo ClUtrooee

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Jaaoa .. Jetafe .. Liln .•.

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Fidel n~Qol PcrlcclQ Hlllili no~endo IL Torrefrn nen Jo.e )1. Vnllei08 J.'eliei!!imo Eehave! Mlle"r;o Puml!J,,"o ... \ ....... 1'elng;o Orneion As;'elo D. n,,~ l on .. \.. Em iliono O. Bnoo

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M.,yellutlyan .. Norug"rny. Ob"od o .. I'llombong .. Polo. I'ulilnn .. I'laridel. Snn Ildefoll$o .. S~n Jo!e del Moule ... Snn 1\1;&uel. San Rnfllel. SII"~" Marin.

BULACAN 1>"blo Ami~o". Cr"~ "'eoe!!!lllo W. Ortega Nemesio G. Gard" Gregorio de Gu,mlln -'ndres EVAngelista Cirineo de Lcon Alfredo ~. Cr" . ,\Ilgele! N. i\{B!lnl"k I'nblo T"niuteo l(e.IIlogenu R. Dimng;bn Ilicnrdo de Vern Perfecto D. Reyes :,\lnrtin Peru Lsurcnno i\hrque~ Lui~ S. Junn Andre._ Fernando Pedro G. Reyes Jo.c J. ;\IlIrinllo Diego C"C"ns Quirieo A. Villnuo Florentino C. Viol" Gabriel V. V"lero FortunMo F. Ihlili

At"']"g .. ,\.enl" ... ,\m" lung .. ApR •• i. DaG;gao.. alllleetero!. Bugu"y .. Culaylln .. Cnmnilloiug"n ...

CAGAy,\N Snbiniano 1.(I'ealo Nil:nnor A. Clltrnl ,:b\I'ndor Doeuli N"mC!lio PU"'G :.tnnnn bnbc!o Tobin . Dllmaso Collado M odCllto Antip(lrd n ~'di", L.uam Florenlio

,\na;llt . . BnliMlg. Digtltl Doenue .. Dull.call. Du!to!. Cnlumpit ... Guiguinto. Ibgoooy. ~talol<>:!l. ~fn.ilno.

CIII""rin. Eurll.., ............ ,. Fnire .. .........• ,. Gntt .. rnn Gonn" ..... IGuig .. T,,,I . lo . . Pnmplo nn. Peflablancn.

Pi.. t. Rilll!.. Sanchea ::-'lIrll Solnnn. TUllo ... TUIIUCII.~rnO ...

V"ler;"no G. Soliveu Fcli", D"bllfnn Junn Daquiung :'\Iclceio Advi .. nto Cesario P. Pernlt" .Fo." P. CRbc'!o 1,codellllrio V. NuvIII Emilio n. TeicH' ,\n(o,,;n S. Obi8PO J. Cft~ibanlt ]\Incnrio T .. lny Eetcb .. n Cpenti"u Frnnei.co Cnronnn Luis Dnligot ]\1. A. J(nd onn

CAMAR I NES NORTE Porfitio Quiflono:'lS Cllpnlouga .. I1igino Fer"'o Dnet .. Folipe PIn ludao .. Rufino N".ido JO$.., Pnngllnibnll Ricnrdo Lever;/I Labo .. . .. Jo!e Espnl'iol PIITac .. le .. Irineo )Io)'n S .. n Vicente. Felix Zaflo T .. I~uy ....................... . Antonino Jllmito

Ib,,,d ..

IJnno .. Hnto ... Duhi .•. BlIln ... Cab~o ..... . Cnlnb angn .. . Cnronlignn .. Cnnnmnn. C~rBm08n

Del Gallego. Gnian .. GOII . .

Irian. Lngonoy ... 1.ibmllnnn. Lupi. :,\fngnrno .. Milsor. Minnl"bllc .. NII,·on ... Nngn .. Pnmplol>n. Pn!neao. Pili. RII"a~' . Sagoa)" . Sn n Fernnndo Spn Jose .. Sipoeot. .. Sirumn. Tignon ... Tinllmbtlc.

A\ln"lIe . . Dalele ... Bnogll .. BII\.Iln .... . Buronnan .. . Cnpil. Dao.

CAlIfA IUl'mS sun Cirilo E.plnn" Eulogio DUQuid Gregorio PefiOio . .. S''''ero E. ReaUt",do Guillermo Villruethu Pneifieo SinOllbll . . ...... . . EliRS de Dioa ModC\!!lo Mnd rid Cloudio Cordia J uan del Gollello Snntingo Toribio Felipe Pan Santillgo I. Gon~lIl.ee Filemoo ~ r. Odilllll"r '1'codoro Dil"noo J05e Ay San Pablo Olimpio Dern .. 1 Rufino D .. durin Pedro Burdnn' Gregorio O. Bnllll"n J o!e Oi cdll ·1.0 Mncnrio L. Fr .. nci""o Mnenrio O. OlivCf Mnnuel D. I'clayo 'folllns A. "nd .. y .. Conatancio \ '. Cater . .. J08e Mn FJo.deli~n Jodto Dizon Pablo '1'. Snlntnt Nicoln, Eetud illo Felix A. Mnde", .. Prrfccto U . .\g"o CA P I Z . ..... Jose D. Gcrvario . ... Jo, .. Co rtes I'edro Reolo 1<'",nci5co del l!oSllno Vj>'encio R. O,tal> Clllix(o A!vllrC& Jose DIIU50l>

PHILIPPINES .!OIlO M . Cn.stro

DumnLnI; Dl\m~mo.

Ibala)', .. . Juiu.n .. .

J.mindan .... Kalibo. J.ihepo .... ;\takt>to .

... ••••

:'1..1[""0 ..

:.I.. mb ...."o. S .. bu ... . Now WllIlh ingl on ..

...

Nllmnncin, Paoll)· ••..

Panitnn ..• Pitn • •.

Ponto.. edrn. Sapia"

stgrnn .. Tllpu ••

Filomono Adviocula i\loiaC!O T. Solidum Mnouel ViUllru R. V. RiCllfortc Gregorio PMtrnnn Juli o V. Perez E pifllnio Imperin! P edro in4cr to Aquilino Ticnr Pncifico R. Pa!lIno; Leo n M~gIIlit Atil,,"o httanloe Snnlingo Bcrmejo An tonio DC'!n!1)!! :'o[nrcinno :'of. Pntricio M~nuci L:l!Icrnn Anlt! O. Arboledn Bcrnnrdino Prot.naio Mil;'ICi Giolol(o

CAVITE Ju~n

M. "Iojien Bril;ido R. Vi11l1.Ouevn Frnncilleo PagtnkbRn :O l lltM PanJ:;nniban

A1fone" .•. Amadeo

BMooT.

. •. . \. . ..

Bailen , •.

eMma"" . Cnvil O.

DMnlllriilns. G~ncrnl

TriM. '"

( mWi.

Indang •• Kftwit ..

:'11I1,,1In""'"

;\1".Rllondon •. ;\lendoz-:>IuilH ••. Saic ..

Novel"!n. Roanno. Si!nol!:.

·r"n .....

'r Om"ln.

"':: . :: .. E l tnnislllo G. Pauln r Ro!cudo E. Snntol Oorotoo Mnngubnt .....\n"el :or. Genuino Domina-dor :or. C.merino Eloilio DRI)!! ~cisco Rnruow Fcli po Y. E4piJlcii Jo.o UnlU! "Iign'll "[ojien J ose Nnnrcno :'oligue1 R. Alvnru ..... JOIO :'01. Castro .•.•• JOIC Kinm,on Lndilllno F. J oyu Albino Z. Din;lns CEnu

.-\lCllnUlrn .••

Alcoy. Aloarin Alogu;nenn. ,\rll1lo .. Atlu riu., .

. ...• ........ . ... .......

Blldinn .. BRlamban. Unntll,'nn BIl.ili B oao .•••.••....•.• llollooll . Dorban .•.•.•.•.•.••

Cnrmen.

Cnren. elltman. Compoetclo ..

COlUol"doo .. Cord o\'n . . Onanbllntnynn. O"'nllueto ••

. ... •.••

1)"1111.0 ••.

Dumnnjl.ll:

QiT\lltU" n , .••

...

Viconte Sarmiento I1ermcnegildo v. :OI<Hqutd~ Miguel Aller J <HC i':!cnrio J ud uto Albnrracill JDlIQuiu T. M llombon; I.capoldo Cnbnllcro Domi1l:ldar Sa llehu Joso Ybniln J UllinG Cllua,n ,\n tollio ) l nn8ueto N"bor Dcrn'nll SRnt'OItO ~hllgub"t Guillermo S. :Bnol :Olnriano Mercado Onbriel Jurodo EUleb io K. Veluoo Aurelio H . Alivio Ju nu Dn guio Cntn lino Pepito CriltinG Snlvodor Pllulo Almcodnu "Pllcifieo Alpuc rto Simeon Vi1enyno

LiJORn .• . i\hdridejo • . Mnlabuyoo. Mnndaue .• Medellin. Min.llln oi11n. MOlllbunl .. NnlJ1\. Opon. Oaloh. Pilar •. Pinal!l uopJao. Poro . Rondn ••. Sombo!!o. San Fernando .• Sao Fraooillco •• San Remigio •. Sant" Fa . . S"u\I. ndo r .••••.•.... •• Sibongn .. ..... .. ...• Sogad .• T"b~,o n.

Tnlilla}". Toledo. Tuburnll .. Tudeln.

Bnearm . • BadGe .•

... t .

:::!~i

8 .. t"c. Burg03. Currimno .• . Dingms ..•. Laoa; Nuava Em . PnOR)· • Pllluquin. Piddi g. Pinili. Son N icolll! . Sarrat •. SOlaOIlIl ••. Vintnr.

113 1.lIonro Raruna Filomeno Figuraeion J llcinlo Te~on Aleinndro del RDIIllrio . • .. J ose Anclli~a CCIlRr i,arrobis Vicouto Gndor Godorredo L. MendOla PaseulI l Patali"ju g Patricio "risioo . ..• f.·ilomeno :.r. Torre. Geunro Nemen ... Felix Soacano U onom t o Villllion Gre&or; o Teves JU lin Llallto Lucio ArQuillnno Felipe Cab8~e Loreto Mllr;gomcn Mnximo V. nure r,,· Ro<]uo Mend ez Mnrcclo V. ,\Ibao Cotnlino n. Romft~o. I,naeio Cabrera •• Angel f.ibre COII..do "Iullom Emilinno S. 0)":.0 ILOCO S NORTE . ... ToreuHo Ver Ladi! lao Torrnlbll "Illnud G~"'ida :.ranuel Pitp;t Leon Q. \'"ro1lo )[ a roinl Calnl)in; G regorio Duml:lO Cc\u Pnrad o Tarnal PlIs;on "ran.ano D. Calilloreo Conunndo Diu Tirnoteo J o.uP M{urricio A. Hernnco Delfin Pnl:dilao Adriano M~ {h,mbn )lodCllto A. Viloria 1'lIlr;oio Fornndn IlOCOS

Hllllnyo),o. BIlugu"n •. Banby .. Burgos .. Cabugao .. Can don. Clloaynn. Ca.vn ntC'!. Galimuyod . . Lopog •. f.idlid dn .. MapiD,a\ Nalbukel •. Nnrvncnn .• . S"n Esteb"n. Sn u IId,,[o",o .. San Viun l e. Santa Salltn Cntation •. Snu ~ .. Cru~ ..

sun

Lui! Ga'I'''' C:r"diuo It. O.. nd"SR " Ilridio n.~rro::g JUR" D. Sison Celestino Soller Conmdo Liquetc Frllnoi~co PimenLel .. Benito ,\gui rro F.ul"lio Dngoi Cirineo Aquino Elm on Manuga" :>' IRCllriO T olentino Poneill no SupDet Andr es F. Cordero Fidcll oio I'. Vergora Unlbino Somern Cirilo U. LnlO Pedro Dueno Miltuc! RaheM ;\[IIDue! J<»ue

THE COMMERCIAL

114

Ped. o Festojo J OBquin It. Eseobar Gregorio 'fBgui"m J ou J. TOlIoro Norberto D Ryoan R Rlnel Lnrdiubul Perpedo FRypon

Santa Lucia. Santa MIlTi •. SnDliRIO ..•

Santo D omingo. Si nnit .. Tnsudio .• Villll n .•

ILO ILO JUlln DigoAdice .. J ose G. Alvior Cri ~pino Melooololl DAniel Orti z MAnucl Bakab,,1,: Rnmon Jua rez Bernnrdino Causing Laur eano Tonnolla WenceslllO S. Grio Geronimo Cclo Enrico il anllR Rmrnon Eu!,.]" Julio D. Mu yeo J ose Cn""l .. n

Ajuy .. Alimodian ..

Arevalo. Balaun .. Dannie .. Buotao Nuevo. Barotae Viejo... Buen&\' ilItl\.

CabBtuno ... Caliooll.

Cn rl e!5 ..• Conoepcioll. Dingle .•. Duell u ...

Dum aogu ... Estancia .. Guimbal ... I!;blra •... Jauiuay .. Jaro •••. Jordan .

Lambunao ... La PBI .•.

Leon. Man! i ll.,

7I l il1gllo . • . 0101>.

Pnui .. Pa,-; .. ... PotO!I\II ,

S.." Dionisio. Sao Joaqui n ..

.sar.. .

'fisbau"n .. Sn o Mi,uel. SlInta liMb"ra . Potaton . AUllodnnRII.

C"bugan .. CI\""),"", . Echague.. ,

Ga,m•. i1aean . Jon~.

Naluilian • Plllan. " , . Reina )l l'rCOOIlS .. Sao ~h..iDno .

S.. " " ablo . .. Sanltl l\In.in.

8"01;"80 . . 'rufIllluini . .

Al .. mino~.

mho.

Cnbuyao. Cal.mba.

Crescncinno Gntiesles J ... to E. Estrella Pedro T . 'SarrDIICO Pablo Bioo HUllo de Chnvu Runno Gonlales Nume.i"no S. H ollero a Bmon C. Tnbinnn . .... F~erieo Fabrigns .. J ose U. Orbe

...... . . . .

~l:\re~o 1~~::::1 l'aei~co Jllbonillo Jo'erlllllldo P"reoo Cipriono n. JlI~n~u . .. J,,!m' P. Dicz Ceeilio D. Tlldy Gil Riv QS Rllfael Sllncbez Antonino Solinnp Fernllnd o Pnreon

ISADELA COlli'll! tle )a C r ut Froylfin GU"II Felipe BneRg .. JOle Cnrabb"~lIn Zo.imo CRuilllo l\ l uimo Tnes Bernabe Alejandro Antolin DnyabOll Ipbelo C. Salnzll' Lucio CnmRddu . .. Eliu Gabriel Manuel l\hoillang Penlilo Masiaan llelipc PlLdua Lorc.uo l'n~c" rnn LACUNA Silvestre V. Silva Lcondo A. Leon Mariano ViJlnnlleva Alberto U. Carpena Eduardo A. UllneUo

INDUSTRIAL MANUAL C alouan .. Cavinli. Fnmy ..................... . Lilio. Longoa ... L oa llullo~ •. Lu isinnn I.umbnn .. . Mnbitne .. . Mngd"lena . Mnjllyjny .. Nagurlnn. Pllete ... PnllSPnjnn .. Pakit .... Panli!.. Pil .... Ri~Al .. SAil Pablo .. S"n Pedro Sa nto. Cruz .. Sonh MArim. Snntn ROI R Siniloan. .'~g oo ..

Ariolay. BRcllotan. a ..laonn. 'SallgBr ... 'Souan, •. Cmbm. Luna ... , . NnIlU ilio.n ... R Olnrio. Snn Fcrnundo .. Sun JUAn .. SIIntO Tcm u. Tubno.

Abu),og. AII"'go.!nng . . Albue"•. Anaho.wnn. llnblltnacn .. Darullo ... Bnlo .. D,,),bo.), . Bilirll8 . Dumunn ... C .. blllis". Caibirnn .. CAlubian .. CApooonll .. . CarigR.n .. . Oalomi . Dulng .. lIilongO$ .. Himlun g. Hinunan ,,,,, . lJi"undnyun . Inopoean. Jnro. Kawayall ... l oll. Pu .. Lcyte. Libaaon .

Lcollclo C. Oeiroaa J UII" B. Villll"";" J oae Jumilllo. Jr. VitRliono Dimapila Ju"n Cnblit J Ole H . 1$0" Mnrtin Bllio ClLyetano Jacobe Feliz lIrnrful Na reiso Orilla S. D. Ordollel NomOllio Eimillil Primitivo Ac-Ie Ped.o Lavnd ia Cirinoo M. Goonle. ellnuto GalvCB Le onelo Rebong F ortnnnt o Arban Inooencio F. Bnrltta. Cirinoo L;mpi"joy l\I,,( CO AlfonlO l>eouoio Renl E. de 101 Royc. GcminiAuo Ong

LA UNION Primitivo BOBdo Cornelio Nimuan Aquilino DaesnllY Vicente F. Zam brano Jnlion Lopu Remigio Sancbex Cntlos F. Mualll)'a Domingo NorA Leoendio S nbndo Antoro R ive.,. P,,,,lino Florea Druno do Leon Guillermo Garcill MlI,inno Viloria LEYTE mentdo Collnnte! Modesto V. Guteln A'I"mllo Cllntign 1l1" ~ T. Tero 0""",'0 Almacin J"li"n ,\. Alu ,\ IIi""o K"ilon Serll/ln Loreto I'r~"dsco Tonol~t e

Eu.ebio O. Mn"ro I,'iiomcno Gn rrido ":',l,,]io Mademlo l'-cli" I ~Iuen l e 1'o,i«IO pilllpil \'ieto r N. Nn r tCII Catlll;no R. Ciuco .""nlln.io lQllunxnd Inooenle.. F. VilJ"fior Leo" U"llcner llusilio U. Fernnndu Eu"ebio Avilu Ant onio K . B u.nnr Gu~lberto Ln_~ril1n

Simplicio J IlI/U rna Ruperto Avelino Nl!ltorio D ela otar mto M. Monle de Ramo.

li S

PHLLIPPINES Simeon i\lnllmo

r.I1011I1 .• M",..in ..•

I lIill<> Pnler J'ri~eo )1. Ililll!

~f"orohon

.\I1I"j",i,,,.> nid"l~ o

~1"litb"l ~lnTipipl

~ I"tnlom ~Icrid"

Tcofilo On";ol:! Florentino I'il LOOodoguriOo COonciliuuo Uesliluln O. CnPUA~n \' ietnrin L:.ure"to N~torio Omoll" UocetOo l'np~1 FidellciOo MerCAdOo )lnIOOo II. Pn.tOor FOortunutOo l,~j(hrdc • •• GO"'ucin Cnduves Fm"ci~rOo l(e)'elI Diu Nuu';o Du,,(\,," J",,,, T,"U1OoII Ihrtolome E"nnl .• Jun" PRellcto

.. ,

"''''',,1 ... Ottnot:.

P"lompoll . p~.trtlD n

Pintll)""" &'" hidro . San :>Oli.:",,!...

sorod ... Tadobnn T!lMUII.D .

TolO!1n.

ViUn!> .. , .. l'~lo.

:\I,\RIND UQUE L ... "iOo Lh'elo Viblinoo Sal,·.."ion

UM(l ••.

RUl'nBviatn. GMlI n .•.

i\lo,",oP; .• flADtn Cru",_

Torrij""

..•.. ....\ .....••.. : Anile! It. Sevilla Hermin Oo del PmdOo :\In.,,,,IOo Ri\"RmOonle ;\!anuel ItOolulu ;\IASBA E TOollll'1 :\l illlll'01 . . . . . .. Erllilin flnro :\lcMe. G. 1,"'OoIlI(

ATllro~· ..•.•

CM"ingnll. Dilnll.!lnlnlll; •

SO"~Oo Cn~ti !l o

:'obabnte ••. "'ilu~ro,lI .•.

l'cdr~

F.anoj,cn AliuuOII"n Fnrtunatn Ri\"er .. J o,c .\I,"onlc

51'" ~·"rnnndo ... Son PRac""l. !',n

J,,~iDto

\hm. dc nOli .• Rnnlnbon

lI~c;o

llul~ ll\o"o ..

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r,OO<' ..

1,111,11111( •••

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:\'''Ij"",. f'nlwtR . Pj"nmulnynn.

"<II"

P'IO'TtO Gnler.,

:'"blnynll .

$"" Joo.c. I>~"

' l'o;,QO l".n.

MINDORO ' <incOo COrlunn .. lJ rnuliOo Z"lucta Bri\liidn N. MnnnlOo J o.o GOon1Rl~ Dcrnetrio ,\boboto Pedro Alloro Domin\liO i\I. Vulbueou Fr"ncia~n Nicb res l'colimo P. CUli Por6.io S. Cnrnin .\rnnndOo SO li .\ gulli" Felipe \'cDturan211 ElCUI('rio Alil;:pnlu F.~tnlli~l"o C"bMr"bi", P.imili,·n Z"mon. l.in" lJ. ;\In'''''IIIlod Frnnr;'co ,\, .."illo ::i •. ~lIs,n ][s

."'nro" . Unlil"'I111".

CIII.;,. •. Jimenez .• I.ol'~' J n~nll ~I ;!n",la .. Oroquiotn l'lllridel , TAlIII;Ub .

T'''leb

D. ·Oll,·"

OCCIDENTAl. T;mn\eo G. :"0;~"1: Sixto S. Veleo ;\I"o"rio S"",(lI rR 1.1 . DOomi"II"U JII~" "I. 1'''111'''1 ' A"lIeI " ' ct!i nn . " cd rOo O~ i1"Oo •. Bernurdo A. Ned ••• T im Ooteo I~. En,r,,~in Ulpinno T . H"lnon

B~linI!Mnl; ..

Cllgn)" .. " . Cnt"r"''''' .. G; ugOOog ... Ini t"o .. KinnguilR" . :\frunbninOo. Sngn)·. S~ln)" . T:t.l;olonn. Tallsn}"n" • flR~nIOO . BngOo. Tli"nlbnl;on. C.~ui~.

Cnlal ... \"n. Cnua}"nn . E,cnl"nt".. Him"rnn}"ln" .•. Hinienrnn. Uog .. lubel:t. Knbankal~n.

La Cnrlotn. T,,. CuteUnM :.rnnapln. :\Iu rcin . l'oulo,·OO.,. P"lupand II •

~:~n~~'r!~i: :. ~:~~~:~:'\~~:: .. Silll~· .• TRllsny. VnU.doM .. .... ietOorina ..

,\yunIt Oon. Dllui" .• .\).... qllitnll. BReOlll· .. B:>.ls. Dumnguct c Ellriqu~ Vll1,,,,nc\"n O ll i" ululI"lI. .l imnlnluu .•• 1.11 Libcrl" .. Lnreoa. LII~i r.\I~uriRgD • :'lnnj\l)·OO. :. rnri" . San Junll .• SintOon •. Sibulnn .. Siquijo. Tnnjll)" . l'IIYII.un .. 1'0100111; . Vn1l0ilermoso . Zurnbo.",,"uita •..

Alilll:." .•.. UonltobOon .

MIS,\ :\rIS ORIENTA l, Rnmnn l.u<.1cnn JuliOo ". Puellno Feliei~imOo II. AIOo"1': J""n C. Snnc h ... . .... ,Io.c U. Cotlilln Ucnetli cto 1.0gb", Jorge Ebnrle FrnnclscOo ll. Ch",·es hlRnciOo BotardOo AntoniOo CO!Oin Fclielsirno E. ,\g"ilar ,,'ECROS OCC I DEXTAL PnblOo D. :\r"lcilan Al;luetlo A. Gonu~n S~gllndn :'IOouli1l. PedrOo B. \,i1lenR HormOllcn~ E. YonoOon HiGin Oo S. Peru Frunci.co Ferrer TimOot eo B. lI:t.moa Ricn rdo La~IRpo" R:t.ymundOo A. V:t.r;A ClaudiOo Mo"tiltll Rlcnrdo J. B,.nuelt Jaime :'Inrino Fnuuino Cllh""ndR Dnnid O. O".tilo . ......... Jo ... E. Mir.ndn ............ 1-:m;lio C. :'h,,,.i Frnnciuo :'1. E~tebnn Vicente T,. Knl:t.lbns F"usto A. Cnbnllero J o.c Sol" "Innud D. C""yeOo"~ Felix Ln«o" Simplicio 1,il~relt ",,,.imo n. Mu)'co Fe1i~ ;\fontinoln )l"EOROS OI!IE:-<TAI, •• Julinn Yillun"e\"~ O re,orio Tub,.! Lui! T.umonre l'edr o Q. So1i~ Prul-d~~ 1'. Villnnuc\"n P euro l'e,'e~ PU\ficio T'r~;RIl",e ~1'lrtin BulndOo E9wnilrlno "lartinco D~niel DiOo""luOo TimOotco K. Yoroll.o: 'l"dl'"lorOo L"makad QuileriOo \". :'lnTdOo . $RlllinlOo It. .\cnuomin .. Julio ,\ulno Seba.tiM' :\IOonern Fidel l'ayco ~li ~"cl Oiputndo ~'elicinn(t Mnrchnn Cri!I)'n'nllo LimbnGR AJ>olinb. C. Cnli;a" SO"cri"o i\1",lil>Ol Prirnili,"o Serion l,cnndrOo Flun, NUEVA EC IJ .\ J<>n<lllin ne'·n G ' eKOorio G. liOorjR

"m....

THE COMMERCIAL

116 Cabanatua n ..

Alejandro Qui",.on

Cabiao ...

J o.o T. Lapu. MaTeedanio L. Vcl ueo Telesforo Domingo Ju an N. E"""cc\iata

Carra"g1"n. Cuyapo. Gnp~n.

11.1101110 C. Faigal

Guimba. Jaca. LauT ..

Patricio Yombao 1'imoloo de Guzman N I1"uel T. CUItO "'arcelo Ner; l .eocndio bin Jo~e G. BRgll;"; Ventu,a D n.!".ung l'I l clQuindcs It. RnnquiJlo Cna illoo ill. A "<). JQae V. C ruz negin" Agnrun E I)ifani" C. "lese" 'reodoTo Talen ! Apolonio 'Pase""l hid." S. Sl<nohez

Licllb. Lupno .... ;\Iudoz. Nnmpieu:m .

Pant"bnngnn ... PapnYIl . .

PeLl n.n "dn . Quezon .. RiuL. SlIn Antoni o .. San hidro ...

San J oso . . Sn., Lconnrdo .. Salli n R oslI . Santo D omingo ...... \.

ell.im;.o lIlurcelo Doroteo Nor icl

~:::;:::: .. '::::::::::\:'

P io T ulcn t o Jul io T. Mnsi bny

Coron Cuyo. Dumaratl .. Puerto Princes... Taytay ..

Francisco R<l)'o:;, ..... J OlI<l J. Abld ~a:undo Blanco \Icente M. Pulun e.. Vltente Daculi

Angeles. Apnlit ... Araya t. 'Bo.color. Candaba. Flotldablnncn . Gungun. Lubao .. )Inbnbcut . . . )'1"e"l.>ol.>e . ),[nll.olnn&. M,,~o n tol. . )lc1ico .. Min"lin. Pomc .. ;;;"n Fernando ... San J,UI5. ::;an Simon. Santn Ann. Santa Rita. Seltmoan.

PA;\Il'A NG,\ .. lj'ra neisco L. Lu"tin Cor nelio M . Sir;;u" D umingo i:l<lnson )I""uc\ Galu.,. Zatnria. Arn.yo Cu m ilo Oumpo Jose N. L~yua: ,\ngel Momlcs J o~e T . Gurcia M"rcelino Dusto! Znbnl.~ Sc n'illnno Ayuyno i\1"nelo L. Mullnri Migucl S:uouko Cel\\.\'l in o )'locnpinlne SOI'crino ue los Reyes Urbano D. Dizon Apolonio S. Sa les Cntalino l bole. Arsenio D. D izon Vietor "lir~nd", JOlIe Ln c""mnnn

"1: Aguilar 10 0 ..

,\Iaminos A\cnla .. Anda. A.ingan ... . l )alungao .. . Unni. B"utistn ...

P,\NG,\SI NAN I.igorio NanD Narciso C. Abalos Leopoldo S~on Jncinto E. Frondn Eli:u Celeste Gregorio E. "clueo .\[uimo Minglan" Juan Castdo Sol.>... C",,, uch o

INDUSTRI AL MANUAL Dayambanll .... Binohmon. Dinmalcy Dolinao. DugnUon . Dul'llos ............ . C"lasino . Dnaol. lofnn t" .. 1.abrndor . Lingayen ................ . i'IInbini . i'II nluIqu!. M onn""g. Mongoldnn. i\rnngalnrcm. l\ l apandan .. Natividad .. Pozorrubio .. ltosn lCII .. SUII Carloe. San FI,bian. San Jadnto ... Sao Mannel . San Nicolall . Sao Quintin ...... .... ..... . Sn nt" Dnrbnrn. Santa M"d". Sn nto Tom ... Siaon ..... .

S,.I..I __

Tnyul . Um;ng&n. UrI.>IU\lndo. Urdaottn .. Villui1 . ..

A nti polo ... Unrus . Dinongonan .. C"Int". Calooc"n. Cardona .. Jnlnjnln. J,a , Pilla a. M",knti .. Mnbl.>on. Mnndnluyong . MarikinD .. .i\lont-nlboll .. ~rorong.

i'IIunlinlups. N",·otu. P orallaque .. Pua)' ... I'nsig. PalerO!J ... l'iliUa. San Junn del Monte. San Mateo. Tngig. T aony. Tnyeay .. Teresa . B"t1aj o • . Cajidiocnn. Concepeion.

Enrique M. Roldan Protlle!o Gnlina to AndrCl! G. Ferrcr Alon~o C. P once I'er/ecto Abod Lorenzo Bonodo Joel'. P. Colimliru Fln"inno D. Cristobal Filo rolUo ~Iirodor CiTilo A. A"atria Siaenond o Jim enez Pedro RodriGnCl P eilro i'II,,,,,,,ril i\["r;8tJo M. Arma ~ Dalmndo V;el' eru Jo,e ;\1. Ferrer i'IInrlininno S. Znbol ll Dernnrdo ZnrDGou Domingo M. Mngo o Fortunnto It. Alberto Emilio Padlan Quintin T. Cneapil Jo on Solcedo Primilh'o S. Perez J Ole Ccndafla T eodulo D. GalligoCl Hoqoe P . SHan Claudio Dog8 yo ng bidro Arcnlnfi Pedro Gouyan Amando V. Diu Fln" iaoo V. MngpaU F ederico Rod riguez Firemon i\fcndou Wilfredo G. Ambr.wo Es tebDo i'II. Corpu~ RIZAL Marceli no S" nto~ AndTc. de la Torr~ Julio A. Anl iporoo Jc. ... Ampil Pnbl o Poblo )[u,iono C. Son Ju" n D omi nGO 1Il'19ikJp Eugenio Trinidad J ose D. Villena Teelo C. Sonlos bone Lopez Wcncc.lao C. de I" P02 J acinto D. nontist" lticnruo D . Ungrio i'II"rcintJo E. Arciag" Denja".,;n Alonso Fmncisco O"bricl ;\loisCII SO il J uan Sixto Antonio .\Ioiscs R. Flofc. lIdcfonso Al ea.ntnta Engracio E. S"nto. CCII8r M. SnntOI A,tomio E. Nlllh-idad Pnltor MDlilang Elndio T. A\zmnt"'r" lo'rnncisco 1'. Oonnl",

nO"IULON Jou Guti ~ rrcz Pedro Roo Ant onio S. Ft111"'lII~

PHUJPl'iNES Fllu.to F. Fnllari .. Enriquo Moreno Jo'c1ipo Fct~l"cro

Corello"" . D C!! Pujol . Janel! ••••

Looa .. :l lacdiwDlIg ..•. Odiongllll ..

Ramblnn. San Fernando ...

Baso)', Ilobon.

Hc,nani. La.o:>'1111 L .. vc .... rea . Llorente :>.Iondmgon. Oquendo. O~.

P"ilIpag Palllbujan Salcedo •• San Antonio ..

~ I i"do

Pedro A. l,jmb""Ru Irinco 1'. Or t iz (AClin,) I'erfcet o Hue!.>nng 1I"li" n. Or tigo

Calb8yog ..

Gnndnrn .. GuiUlIh •.

Victor C.

. Ja_e nllUte

110'01111110 •.•

Olim l>;o L. Mcrkh. DOlnotrio 'I'npin A. UlI,f\ Ccferillo Oligario Fermin Cay"ndnto A. Guimbnolibut . ... Jua" N"vid"d l1iJnrio D. Dulo~' All tonio Mnrtires Si;!;!o LDluja .•••• , •....•... .• ,. Filoleo Mont ... . ,.,. Joso\R.. Rollo " . C, M ... lar.., Elndio C. Opinion

Szr.1I Julian ... Santa Mn rgn rita. SBDtll Ritn.

So.nto Nitlo ........ ,.,.,. Suint,.,., • Tart. Tarangnnn ... TinnmbacBn. Villn re"I .. Wright. Zumnrr"ga ••

Pnterno Huco . .•. , Juan Carci" ViMOt E. Oorido Snntinlo Cnllnnon Severo P. SCO!bred"

J oa" Firmnl o .... Joo" Millnno

SAMAU Plncido V. Eulin B. U. Jnbin"l Pnlrido I!. "nldino. ~'olix D"QuiUn

AUen ••••

Almag." Balansis" .

Calblgn. Ca pul. .. C .. tmmn n , CMbnlogfl" C~lubig .. .. D.,lor<lil.

C rispin Crirnntia Luau ItD"lm

:'>1 .. lnog. I'i ].. r .•. P rieto-Oi .... S .. nta Magda]en" , Sor.!ogon.

117

Esteb~n

~"~i:n~Ia~~~:n Illiao I. n ea ul!a Moreiano C, C .. l;m Ramon n . Calagol M. L. Caber, .. Hereulano Awayan C irilo T, Dalnlopo Ruperto Abinea Jou n. AlctUnr Joall"in Y. Cuizoll Ann at"cio S"bnrre hid ro C. l ';zo" Rodrigo A. 1D".n

.IfUNI Cl l', ]L DI;:,TR I CTS COllo<ml •. •.... . ...•.•.•.•••••.• A. C. Delmonto HiDnbrtnlJ"n. Tomtit N. Ab"'gor Jip3p"d. Claro l'omll3; n ;\I M]Og Geronimo n. VnU e!! Mntu~"'nno. ., ........•... l'er reeto O. Din 3 S~" Joso (10 Bunn . Pedro Ribalo. SORSOCON Bncoo Rnfnel D omo DDrcelon" . llcr"'ellegildo C. Espern nUIDn Amlldo Colpc<> lluIUMn ..•. 1.eon G"]lIro.a CllIi,ur.. n ..•.....•...•...•. Gregorio H. de Je.,, " C .. ~tiUa. Donifneio L. Rebueno Don.ol ................. . Ma]"bo. Aquino Cuba! .. Dnvid E. I.eli. ItOIin. Felipe Santiago JUbDII. VieouI" G.afllldo :l11I".. lIanca. Dll rlolo.ne G. Leo

SURIGAO Juan Or,!"inn Ded .. B. Cutillo J Ole A"eu Cnrrn~cD1. Unrtolom c D. Urinrte Dnpa. T. D. Cervantes Din"gnt ... :-.I",co. Jnt.nyn" Gener .. 1 Luna. Aug"~to E. pcjon G'goquit. Cregorio Cond" Rinntunn. Nieomedes Villalu~ L nnu.n .. Canuto A. i'liontencgr9 Linnga. Cenon A. RO"Quillo T.ingiJ; .. Catnti"o T. Sil"o~a Loroto .. A. n. Ayo ~[ainit. G ..."dcnelo Deltm" Numoncin . N. M. VitaUOI Pla~er .. Callxto C . J",n)' Surigao .• JUlin Diu Tngo .. Neme.;o P. Gnrein Tnndng .....•..•.... , ...•. Snnto T. D on a~co D .. cu"g., Di! ]ig. Cnntil,," . .

Anno . DOomban .• Cnmiling C"pns Concepcion ••. Gcrona,. Ln Pu Mnyontoe .• :-.Ioneada Pa Diqui. PUtll . Ramo.! .

San C!elllente SaDta l"Mela Sa" i'lfanucl. Victorino Tntlnc .

,\I abat.. Alimonnn. Daler. Ca]aung. Candclnrin .• CMiR",on. Cntan"u"n .. Dolor"". Generol Luno. G"ina~·ang .. n . CumBen •• Infantn .. Infnntn .•. Lopez .. Lucbnn ... Lucena. :lfaen]clo" . :llB u!.>nn .......... , •• :llul"un~· .•.••.........•.•

T,\RLAC Cirinco Dcnn,·id"-! Abdardo C. Sibnl Ti moteo O. Aguslin Basilio T. Yalung Grelo. io Palma Mnnuel C. So]nno A.nndo D . Mnrt ,nu Tomn. M. A''' llcio'' Antonio E. Lopez '\I:"din d e] Valle :lloi~es Agono" E. teban !>1. l\[nnl("031> Ro~e ndo Elpiritu hidoro G. Dal"nn~' ,\urelio Agaed Rufino F",,~to bidoro i\len(lo1n 1'AYAllAS Fcli1 C. Albal' Cemrio V. Vllhltcul Juan C. Anla,a 1.' 010"8 n. Moralo Vi cento C. M ncn!Hlet Nicol,," Mornl Leon [blar;o Manricio l.uico Jou Cnrmona ..,. Antonio Mnrqun Vicente Mend Olll Fnbi"" P. Solle!1l Fabian I'. Sol1con Tomlll V. "'Iorido EII""lslno Csda\'u Meleeio CUltodio Ralod R. Caln"oj" I.orenlo Y. Eneomiend" Florentino LO"ui "

118

THE COMMERCIAL & INDUSTR IAL MANUAL

I>lldte OU.g05 1>:lgbilno

lIuminnuo A. Morqucz SC"crino n. ;\'a.lincz lIb,xi,"o RClCoclon Jo.\, [[ulnrn,,,o.s

Perez. p;\ogo .. Polillo.

Sari"y:J..,

Pedro S. Hur'''tuio SQf,onio N. Clinton FortUl""Q .\1. Oblen" Gregorio C. HOIIUm" Namlio A. En,i'I"C'

Tal'nbss ..

Sallliogo J. Iteyc_

Tinolll;.

Frnncilco IIcrnondcz Dioni.~io \'. Vnlerio

Quezon .. Snmjl,doc .. S~n

Nnrci!Q.

Unis"".

DOlOh," . Cnbnn~nn

Cundel".;",. CnslillcjoB ..

Ib" , /II n~inloc

ZAMBALES ...... Tomon AchntOBO ....... SO"crn E"lIogcHUn AnBclmo n ehro" JUIIU 0101100

Pll~lor

Ull CII,I'O

Alfredo

I~d"no

),orell~o

1',.I"uIII;. Sun Antonio .. Sail Feli pe .. SII" :'Ilnrcelino. Sn" :-IlorciaO.

/II. Monllto 18idro Mcudo.n

Saulo Cruz .. Subie.

Manuel AlonlO Numtriano F. Florea

l~cliJle

J,nbrndor

:'.Iclccio n. Lauro,,, Irinco de 10!! Reyes

MOUNTAIN PROVINCE UNDER THE COMMONWEALTH * N THE UPLaNDS of no\'them LUZon, in tht: heart of the Cordillera Mountains d well several thousand natives whose stlll dy build, husky legsall'<] powerful a r ms, bespeak generations of mountalll-climbing, orest-tramping, outdoor-living, h2adhunti ng ancestors. Lowlanders refer to them looscl~· as Igorotcs. The~e tribes have n'ever been problems of pacification in the way that the l\Iohammedans o~ the South hnve al ways presented themselves to be. Each native in the )Iountain Province no matter how poor has n piece of land or a rice-field whieh he cultivates for his livelihood.

AS A GENERAL RULE, the hig hlanders have great respect for the governm nt and its officials, but they also possess a sturdy inQ.ependence that does not brook undue interference with established custom ancl tradition. Sporadic killings will continue, but with few cxceptions, it will be among themselves only because of ancient feuds or the avenging of the death of a relative who may have been killed by an enemy several generations back. fl eadhunting, because of ci\'il izing influences t.hat have been at work now for some time among the :natives, may safely be COll;;idel·t'd a forgotten primi t ive pastime, Just bd'ore and right after the inauguration of the Commonwealth Government, apprehen'Sion ran high amon!! the mountain people, But theirs was a fear of entil'ely different color from that of hardened politicians and businessmen as to the futme for the P hilippines, Where those in the more advanced ~ections of t he country feared the collapse of the economi c !;\l'uctlll'C as a l'es\.lt of severance of free trade .'elations with the United States, the mountain tl'ibes wcre concerned about conditions of law and order within the country that might affect them advcrsely, They especially feared that many of them • IlII 1I' ...... v 1'.

c .... pp

would be forced out of government employment because of political or family tic considerations. But a s the administration of the Provincial a nd Municipal governments under the Commonwealth progresses, they find their fears unfouT1ded, that practically all the natives already employed in the government service are still safely holding their respectivc positions, they are quietly jubilant and regard the Commonwealth Government with confidenct' and glieat hope. They have observed the successful buryin:,! oJ old political feurls as a l'cslliL of Bontoc and an Hligao man were appointed deputy governor s, and a Benguet man appointed soon after the in au~u ration of tbe Commonwealth. The result of this ex periment in local autonomy for a time trembled and it was feared old enmities would be revived. But aftcr the final appointments wel'e made. the excitement among the tribes subsided. and t he new deputy gover nors were genernlly welcomed by the people. 'rhese three ~fO\lnl! depllLy !!overnors. products of the public schools, have had the necessary training and experience for the offices to which they have been appointed, and all have made u promising start. There have been difficulties to be sure, but these wer e met and dealt with succes9fully .. , .

PHiLiPPINES MOUNTAIN PROVINCE

The first Spaniard to visit Mountain Province is believed to have been Guillermo Gaivey, who in 1829, led an expedition into the Mountain Province and succccded in reaching the Trinidad Valley and the neighboring territory. Baguio proper, at the end of the Spanish rule, was still a small Igorot rancheria with a few scattercd Igorot dwellings, where also resided a Spanish Vacunador and an nocano directorcillo, and the important town of Benguet was then TI'inidad, and not Baguio. The Spaniards made attempts to establish a health resort in Baguio and to connect Bnguio with either Pangasinan, or La Union. With the organization of the Provincial Government in 1909, the Lieutenant-Governors of the different sub-divisions of the province were made responsible for the construction of trail s, ana in 1916 a district-engineer was appointed fOI' the sub-pl'ovince of Benguet with headquarters in Baguio, and other district-engineer appointed for the remaining portion of the province having been located in Baguio in 1900, anrl four years later the famous landscape architect, D. H. BUrnham, having laid out plans fol' its improvement.

119

Tod3짜. the principal routes through the Mountain Province. including the roads from Tagodin on the west coast to Bontoc, the mountain trial from Bagoio to Bontoc, the road leading from Bontee via Banaue and Kiangan to Nueva Vizcaya Province, and the road from Bontoc to Lubuagan are being steadily extended. Mountain Province is along the ridges of the Northern Luzon uplands. extending from the border of Pangasinan to within a few kilometers of Pata Point. on the extreme northern coast. The river system drains to the east and north-east, excepting in Benguet. and a part of Bontoc, whel'e the drainage is west and north. Isolation has intensified the religious cult. and the struggle for life among cold barren hills has bred in the people of this locality a stubbornness rigid against social change. There are several important tribe-division!; among these mountain people, all of whom are apparentl y closely inter-related. The tribe known as the Ibaloi are regal'ded as related to the Pangasinan and the Kankanai of the Jiocano. The Ihaloi considers ~abayan his home and fl'om here he has spread to Bokod, Tublay. Trinidad, Kapangan, and Atok. 'Ilhe tribe of Kankanai regards Suyoc il"l' old Lepanto his home, from whence he has spread to

120

THE COMMERCIAL

Amburayan, including the barrios of Tagudin, Buguins, Kibungan and parts of Atok and Kapangan in Benguet, all of old Lepanto, including t he part attached to n oeos SUI' and Sagada in Bontoc proper. Banaao and Sabangan have bad schools in their localities for many years, but these people are regarded a~ ver~' passive, and a problem to the educational plans of the Commonwealth, as t hey are easy victims of the exploiter. The tribe of Hugao claim direct descent f rom the gods, are more war· like, being somewhat larger in size than the Thaloi, but not as large as t he Bontoc. In intensive farming, the Hugao surpasses the Ibaloi and Ka nkanai, growing rice in terraces, a nd also ca motes, cabbages, tobacco and cotton . In temperament, the Hugao is regarded as between the negative Kunkanai and the positive Bontoc, without the later's stubbornness, but possessing similar courage and making good usually either as a laborer or a soldier. The Bontoc is a fine upstand ing individual possessing considerable native courage. Bontoc h ouses are principall y a roof, the peak of which contains storage space, the intel'iol' b [~i n 2 princi pa ll ~f a cooking place and a sleeping-box, 01' long oblong. lidded bed in which the parents sleep, aftel' shutting themselves in by dropping down the lid. The children sleep in a.to dormitories for boys and girls, rc,spectively, which are maintained by the community, a nd a lso serve as schools in which tribal religion and folklor e are handed down. HAGUIO

RAGU IO is the general nallle of a wide rolling plateau, surrounded by towel'ing pea ks of which the Cit~· of Bag uio is the center. It is covered with vi r gi n pine forests wilich impart to the air un invigorating and health-giving tonic quality.

Baguio is the entrance from the west to the !\fountain Province. This province covers an area of 5,669 square miles, containing hundreds of mountain peaks and deep valleys. The broken character of its topography provides scenery that is unequalled anywhere. The highest peak is Mt. Pulog (9,613 feet elevation) while the ordinary mountains range from 2,000 to 7,000 feet in height, with numerous br oad plateaus between them nt elevations of 2,00U to 5,000 feet. 1'he tribes inhabiting the fastnesses of the }''1ountain P rovince present interesting studies of primitive life, unique ceremonies and tribal cus· toms, but little touched by modern influence.. The

INDUSTRIAL MANUAL fierce head-hunting practices have been largely checked but the life in the scattered villages hidden in the hills goes on as it did in the time of their forefathers who were driven into the high hills by the fierce marnuders from over sens. The Benguets, Bontocs, !fugaos, Kalingas and Apayaos are a ll varieties of the hill people generally known as Igorots. 1'hey arc said to be direct descenda nts of the earliest Malay invaders of the Philippine Islands, who drove the aboriginal inha bitants, t he pigmy wooly headed Negritos-from t he seacoasts into the hills. They in turn were also driven by later conquerors up into the high mountains. According to the best authorities, these people have occupied this territory f or at least two thousand years. Each of these tribes has its own distinct dress, social and tribal customs, speech, ceremonies, modes of living and working. Each produces wares of different sorts according to its necessities. For this r eason the Mountain Province presents one of the world's most interesting vacation lands combining strange interesting primitive peoples with scenic masterpieces,-towering mountains, deep sequestered valleys, marvelous rice-terraces, thundering waterfalls and giant forest of pi,ne and beautiful native hardwood. Under the educational program of the Com· monwealth, t he present movement away from the village center is slowly increasing, and there are now conside rable sections of Bontoc which a rc given over to modern and Christian schools, churches, and modes of living. Kalinga is a sub· province which has an abundance of water in the highlands and eonsi(]el'able unoccupied land in the foot-hills, but mennced by locusts. The Kalingn holds three dist inct cultw;ral groups. On the Bontoc border, the people (Lubuagan'), resemble those of Tinglayan who are related to the Bontoos. I n the west, in the Snltan a nd Mabaca valleys, the people are Banao 0 1' Tingianes, and recent immigrants from Abra. In the eastern fo ot-hills are the Kalingas, a strange nomadic people, regarded as descended from the Samals from Jolo, who were deported from their southern home and settled in the Spanish semipenal colony of Tabak. Among these, the Banao are the most prosperous and the Lubuagan next, a nd the Kalingas the last. Rice is usuall'y abundant and these people are more independent than those in Benguet, Ifug ao, or Bontoc.

l2l

PHILIPPINES THE NOMADS

BATANGAS PnOVINCE

The nomadic tribes of eastern Kalinga an,I eastern Bontoc have been established in this province, often moving across into Isabela and eagayan. The Kaiinga, like the ancient American Indians, regards the deer as his cattle, and strongly defends his hunting grounds. North of Kalinga is ApayllO, the largest and potentially the richest of the subdivisions of Mountain Province, bordering the (,agayan Vancy. This country is rich in forests, and promises a wealth of agricultural soil, although at the present time agriculture is a discouraging task, as the jungle presses on every side, and locusts prey on the harvests. In the west and northwest, arc the Isnogs, who lived in the valley of the Apayao. These people seem to be regarded as a melting pot for H-:ndu, Japanese, Qhinese, Malay and other inter-racial mixtures. In ,he northwest, is the Negrito, a shy forest-dweller, wnose life is most elemental. The Isnogs and Tinguian are democratic but in constant struggle with the advancing jungle which surrounds them. Colonies ot Docanos are making bf!adway in different parts of Tauit, especially in Malunog and Cacatel, where extensive irrigation work is progressing.

BATANGAS PROVINCE borders on the China Sea, the most important ports bei ng Nasugbu, Calatagan, Balayan, Calaca, Lemery, Taal , San Luis, Bauan, Batangas, Lobo and San Juan. Maricaban and Verde are islands on the southwest coast. At Laiya off the coast between San Juan and Lobo are the famous lobo submarine gardens. During fair weather the water is a s clear as crystal with interesting submarine growth. The province is considered the most pictUresque in the Archipelago, particularlyon account of its wide perspective and of Lake Bombon, in the center of which is an island formed by the crater of Taal Volcano. Inside the crater there is also a lake where formerly there were three. Taal Volcano has experienced several destructive eruptions during historic times, the last one being in January, 1911. Lake Taa! (Bombon) is about ]0 meters deep and 2.5 meters above sea level. It is said that formerly sea water from Balayan Bay flowed through the Pan sipit River into Lake Taal, and boats could therefore pass into the interior of the province. The San Juan Sulphur Springs, the Bauan Hot Springs, and the Rosario fresh water springs are the most famous, and Batnngas is proud of her

GO'路SRNMSNT CBSTII);,

a. .OUIO,

B 81<o'OUBT Fouu);J,Y HOT-SBASON QUA~TBU Of hauL ... ); GO'路 HP.SMBNT O FFII:IAt.5

THE COMMERCiAL

122

caves and grotto:;. The two largest are found in the slopes of t he Mount Puiang Saya aud Camantigue of San Juan, one of which has an opening of 40 meters in circumference. Issuing therefrom is an underground r iver which connects with Lake Tan] and flows throug h the Batulao range. Along its source are cxtensi \"c galleries and chambers lined with fantastically shaped stalacti tes and stalagmites and at the approach of an eruption of Tan] Volcano, it emits a \Veil'(l sound, audible at gt'eat distances. The inhabitants of the province arc Tagalogs. At the time of the arrival of the Spaniards there were already, in what is now Batangas Province, large centers of population like Nasugbu, Balaynn, and Batangus. Nutive settlements also existed ~\lo ng the PUllsi pit River. These settlements are believed to have been in existence long before the Spaniards djscove~d the Philippines. According to tradition, the r egion now known as Batangas was visited by a certain duto in company with Dato Dumangsil, two of the tell datos who pU1'chased Panay Island from the Negritos. It is believed that these two datos founded the first Malay villages at the mouth of 'I;aal River. BATANGAS was esplored by Mat-tin de Goiti and Juan de Salcedo on their yay to Manila in 1570 and created a province in 1681. Throughout the seventeenth century the coast towns of Batangas suffered greatly from Moro attacks. During Acufia's rule, the Moro pirates committed depredations on the coast villages. Stone forts were erected at various points alOlrg the coast-in Lemery, Taal, Bauan, and Batangas-hut still the Moros came. In 1675, t hey captured the town of Balayan> anpin ]754 thirty-eight of their vessel s appeared orr the coast of Batangas. I n 1763, the 1101'thcrn part of Batangas was visited br the B)路jtish. An espedition under the command of Bankhouse was sen~ by the British autho)'ities then occupying Manila in search of the treasures of the galleon "Philippino." Bntangas was one of the first provinces to start the Revolution, two of the great leaders of this period being sons of Batangas, llamely, the great lawyer and statesman Apolinal'io Mabini and :\Iiguel MalvaI', the famous general. LIPA Thi~

town was once th{' center of a flou rishing coffee industry. Imposing buildings, well-laid out streets and its cultured inhabitants testify to the grandeur and glory that were Lipa's when , in the later part of the eighteenth century. it reached its

INDUSTR1AL MANUAL zenith of prosperity, In the center of the town is the stately cathedral and tower built of massive rocks and sand brought from the shore of Bombon Lake. It was said that even women participated in the building of the church. It was at this church that Colonel Navas with his brave Spaniards took his last despemte stand to uphold the sovereignty of Spain and surrendered only after he lost one of hi s arms and after his soldiers and women imprisoned in the church suffered indescribable hunger and exhaustion following two weeks of continuous battle against the Filipino revolutionists who attacked from aU sides. The ehul'rh convent became later the headquarters of General Malvat'. LAGUNA The Province of Laguna produces some of the largest hemp cables in the rope factory at Santa Cruz. Buntal hats and pandan mats v,l'e made in Maj ayjay and Lui siana, pandan hats in Cavinti, Sabutan hats in Mavitac. The Pagsanjan gOrge is considered one of the beauty spots of the world. Between Majayjay and Luisiana, the turbulent Botocan River tnkes a 200-feet plunge over a precipice, forming the largest w~terfall in the Islands. In the S~n Pablo Valley, there are nine beautifully set crater lakes. Banahao, a mountain having an elevatio.n of 7,382 feet, is covered with vegetation. In the crater of San Cristobal , nt an elevu~ion of about 5,000 feet, is a beautiful fresh W:lter lake, which promises to become the summer r esort of south central Luzon, with mineral springs in Pansol and Los Banos. Los Banos is the scat of the College of Agriculture, College of Veterina1'Y Science arM School of Forestry of the University of the Philippines, and nearhy is the Maldling National Botanical Gurden on i\Ialdling MO\lntain. The Ileople ure mostl}' Tagalogs, there being a considerable admixture of Chinese blood in certain localities. Santa Cruz is the capital, with 14,151 inhabitants. The region al'ound the Laguna de Ba~' was one of the earliest to be visited by the Spaniards in Luzon. In 157t, Juan de Salcedo, had forced the people to sun ender. The s ubmission of Cainta ha,'ing been accomplished, Salcedo next took the neighboring town of Taytay, Thence he led his victorious a1'my along the southern coast of the bay, exploring the neighborhood as he went and finally struck out for the gold mines of Paracale. Among the interior towns he vis ited in Laguna were Nagcarlang, Lilio and Majayjay. The town of Bay was the capital of

PHILIPPINES the province till 1688 when the seat of governlllcn'.; was moved to Pagsanjan. Santa CnlZ, the present capital, did not nchievc its prescnt position until 1858. In 1639, some of the towns along the southwestern coast of the bay became involved ill a large Chinese rebellion which spread as [a1' as Manila . The uprising began in Calumba and quickly spread to the neighboring towns. The revolt was suppressed aiter some 20,000 Chinese lost their lives and property amounting to seven million pesos. Disturbances again OCCUlTed in the western part of the province in 1763 when a British army under the command of Bunkhouse invaded this region in search of the t r easure of t he galleon "Philippino." Bankhouse plundered the towns but made no attempt to hold them. TAYABAS PROVINCE

T A YABAS is the second largest province of Luzon. Mineral resources \ are abundant, especially in the Bondoc Peninsula w'here gold, coal, and petroleum are found. The Botoenn Falls, where a stream of 40 feet wide makes a leup of 190 feet, has been harnessed for hydroelectrie power. The population of Tayabas is very spurse. Christian inhabitants are found alon~ the shore!:, chiefly on Lamon Bay.

123

Among them are found 11ocanos, Tagalogs, Bicolanos and Visnyans. The primitiVe tribes occupy thl! mountainous regions of the interior. Thi s region now known as Tayabas w~s explored by the Spaniards in 1571 and 1572. Another important event in the annals of Tayabas is the revolt of the Cofradia in 1841. This revolt was led by Apolinario de la Cruz, once a lay brother in the San Juan de Dios Hospital. The rebellion spread to a few towns in the neighboring Provinces of Laguna and Batangas. Apolinario was cz.l1ed by his foilowers "the King of Tagalogs." In 1789, a fleet of some twenty-five Moro Boats harassed the towns of Casiguran, Palanan, and Baler and took 450 captives. The towns along the southern coast of Bondoc Peni nsula were also at their mercy. These depredations continued almost to the end of the Spanish rule. Tayabas was among the first provinces to join the Revolution, and August 15, 1898, General Miguel !lhllvar took possession of Tayabas in the name of the Revolutionary govemment. CAVITE PP.QVINCE

When the Spaniards anived in IIoJanila, the region which was later organized into the politieo-

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124

THE COMMERCIAL & INDUSTRIAL MANUAL

military Province of Cavite was but sparsely populated. The centers of population in those early days were Kawit, Bacoar, Maragondon. As late as 1735, the population of the province was only 5,904. The town of Cavite, once a barrio of Kawit owes its growth to the navy yard which the government there established. Here the ships used in the Ma路 nila-Acapulco trade and in southern expeditions against the Mohammedan pirates were fitted out. The history of Cavite in the seventeenth century l'ccord s two events of importance, namely, the Dutch attack of 1647 and the foundation of the settlement of Tarnate. In 1647, a Dutch squadron suddenly made its appearance off the coast of Cavite and bombarded the fort firing more than 2,000 canTlon balls nt the fo r t and almost succeeded in capturing the place, but in the end, however, were forced to withdraw. The settlement of Tarnate was founded in 16GO~ as a result of the abandonment of the Moluccas by the Spanish government. "'''hen the Spaniards withdrew their forces from the Island of Tarnate the Jesuit missionaries took their converts with them back to Manila. To pl路ovide homes for these exiles the Jesuit\ later founded the town of Tarnate near the old town of Maragondon. Agrarian disputes arose, especially in the towns of Imus,

Malabon, Kawit, and Silang and drove such men as Luis Pamng and Juan Upay to the mountains where they preferred to live as outlaws. Later, about 1869, similar troubles broke out, the refractory element being headed by Eduardo Camerino. In 1872, a military mutiny led by Lamadrid took place in Cavite. This mutiny though insignificant in itself had important political results. The government made it an excuse for the execution of three leading native priests, Dr. Jose Burgos and Fathers Gomez and Zamora, and for the exile of many innocent Filipino leaders 011 the liberal movement of 1869-1871This was the first uprising in which the educated class was involved. From the beginning to the very end of the against America, Cuvite was more than once the scene of hard fighting. Many of the leaders of the Revolution, like Emilio Ag uinaldo, who was President of the Philippine Republic, his cousin Baldomero, Generals Noriel, Trias, and others are sons of Cavite. When the Revolutionary Government was established, Bacool' was really the first capital. For a time, the province was governed by Ladislao Diwa in the name of the Revolutionary Government. gbl'ug~le

MAIN BUILDING, PUIILlC M""l.:t-r-B"oU10 , MOUl<"TA1N P!l.OVIl<"CIl

PHILIPPINES BATAAN PnOVINCE

BATAAN Province occupies the whole of the peninsula lying between the China Sea and Manila Bay. I t fOl"ms the southern end of the Zamhales Range, which terminates in Mount Mariveles, a supposed extinct volcano. Baianga, the capital, lies north of this pass and the latter forms part of the typhoons which sweep through to the China Sea. There are various peculiar phenomena to be found in Botaan. Northwest of Dinalupihan is a small conical mountain, 250 meters high, which has a fresh water lake at the top. In t he neighborhood of Malasimbo arc a few shallow mal'shes, the shores and waters of which are tinted red by dust said to be formed from the remains of mlCl'oscopic animacul ae (Galionc!!a fCl'l'uginae) Ncar Grani is II be<1 of imn hyd)'idc whkh lhe people of the region used to make into paints fo r walls and carriages. There arc also deposits of clay of which pilone8 are made. Th~'e is also a large deposit of !=helll; which 3re used for !inl(' in the indigo and sugat' industries. On the shores of Ol'ani is a fresh water spring that rises from a spot covered daily by tides. Neal' the town of Orion is an impassable quaking bog. Another, s mal~r one, is found in Ogon, Balanga. Most of the people who live along

125

Manila Bay al'e Tagalogs and Pampangos, while those along the western coast are chiefly Docanos and Zambals. Among the early Spaniards who entered this region were the Dominican friars. During the first t.wo decades of the seventeenth century the coast of Bataan was more than once the scene of battles against the Dutch. The first of these encounters took place in 1600 off the coast of l\fariveles. The Dutch were commanded by Admiral Van Noort, while the Spanish-Filipino army was led by the historian, Antonio de Morga, then an oidol' (justice) of the Mar.ila Real Audience. The Spanish-Filipino squadron suffered heavy losses, bu t the Dutch were forced to retreat. Nine Years later , the Dutch again appeared off the Mariveles coast, this time led by Admiral Wittcrt, against whom Governor Silva sent a hastil y fitted out squadron of six small vessels manned by Spaniards and Filipinos. The Dutch were defeated, but continued their hostile visits to the P hilippines. In ]646, they bombarded Zamboanga, unsuccessfully attacked and finally effected a landing in Abucay, Rataan. ZAMBALES The\pl'o\'ince of Zamba les, with an area of 3,680 square kilometers, lies in the westel'n part of Luzon.

126

THE COMMERCIAL & INDUSTRIAL MANUAL

Iba is the capital of the province, located in the western pUI路t with 5,.151 inhabitants. Subic, on the Bay of the same name, is an important port. Olongapo is a naval SULtion which boasts of one of the largest floating dry docks in the world. Deposits (>f copper, Zinc, and Coal, are found as well as mineral watet's in the vicinity of Iba, Subic and Palauig. The exploration of Zambales began in 1572. The name of the new province was taken from that of the Zambals who inhabited this locality. These people befol'e the al'l'ival of the Spaniards had established several villages, among the earliest organized in Zambales were Masinloc (1607), Iba (1611), and Santa Cruz (H112). Like Bataan and several other provinces of the Philippines, Zambales was visited by the Dutch during the early part of the .ieventeenth century. 'It was in 1617 that Admiral Spielbergen, 路w ith a powerful fleet, appeared off the coast of Playa Ho da. The Government forces, under the command o~Juan Ronquillo, sailed out and engaged the Dutch squadron, which was defeated. RIZAL PR VINCE The Province of Rizal was created in 1901 out of the Spanish military district of MOl"Ong and se\'-

eral towns which up to that time belonged to the PI'ovince of Manila. It was named after Jose Rizal, the most beloved of Filipino patriots. Rizal Province includes some of the oldest towns in the Philippines, some of which, like Parai'iaque, Pasig, Taytay, and Cainta, were thriving native settlements before the arrival of the Spaniards, and are regarded as among the earliest Tagalog settlements in Luzon particularJ.y those traversed by the Pasig River. The first Spaninl'd to visit the region was Juan de Salcedo. In 1571, he travelled up the Pasig to dominate the people of Taytay and Cainta which two places were at that time large centers of population, sUl"I'ounded by well-cultivated fields and t l'ading with the neighboring settlements and with the Chinese. The Chinese uprising in 1639 was the occasion of serious disturbances in variolLs places of the province. The Chinese burned the churches at Pa~jg, San Mateo and Taytay. BULACAN

The Province of Buiacan, named from the Tagalog word "bulac," mean ing cotton, which was once a principal product of the region, was one of the ehrliest provinces founded by the Spanish gOY路

LOO"INO DoWN ON LAGUNA De BAY BeTWBI!.N PILILLA AND MABITAC--RIZAL PROVIWCB

PHILIPPINES ernment, dating as far baek as 1578. Before the arrival of the Spaniards there were already in existence, in what is now Bulacan, thriving native settlements, on which were founded the towns which the first missionaries el'ected in the early yeal'S of the conquest. Among these were Calumpit, founded in 1572, Meycauayan, in 1576, Bulacan, in 1578, Malolos, in 1580, Hagonoy, in 1581, and Bocaue, in 1582. Following the arrival of the British in 1762, Bulaean served as a center of resistance doring the British occupation of Manila. Captain General Anda escaped to this province where he organized hostilities against the British. Captain Slay of the British army, in the COUI'se of his expedition to Bulacan in January, 1763, undel'tnking to destroy Anda's force there, encountered the Spaniards and their Filipino allies. Bulacan was early prepared for the Revolution. Some of the best known figure s, including l\f. H. del Pilar and Mariano Ponce, whose names are connected with the period of propaganda, are sons of this province, which was one of the first to raise the standard of revolt. Late~. when the Revolutiontlry government was established, Bulacan came under its control and Isidoro T'1ll'l'es was appointed to act a s governor. It was at Biac-na-bato, in

127

the mou ntains of Bulaean, where in December of 1897 the famous Pact of Biac-nn-bato was conclud-

ed, and the town of Malolos was for some time the capital of the Archipelngo, and here, in 189f1 the Philippine Independence was proclaimed. Here also, in the historic Church of Ba1'3soain, the Congress which drnfted the Constitution of the Republic held its sessions. PAMPANGA PAl'l'IPANGA is the lowest and most level of aU the provinces of the Philippines, with the exception of the western portion which embraces the low hills of the Zambales range, and of Mount Am_y at. There were then several prosperous early settlements, nmong the most important of which were Lubao, Betis, Macabebe, Bacolor, Candaba, and Arayat. Soon after Legaspi had occupied l\'1anila, a delegation of prominent natives hom Macabebe and Hagonoy went to Tondo to persuade Rajah Lncandola to l!xpel the Spaniards. Legdspi leal'ned of the arrival of the delegation and sent two Spaniards to receive them. But the native delegates refused the fl'iendly overtures of Legaspi's envoys. To overcome the resistance of the

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THE COMMERCIAL

Pampangans, Legaspi scnt Martin de Gait; with an army to effect the submission of the region north of Manila Bay. At Luhao and Betis, the Spaniards met great opposition. The Pampangans entrenched themselves in strong forts and at first successfully resisted the Spanish attacks. Goiti succeeded in advancing and early in 1572 had the g l"eater part of Wh3t is now Pampanga under control, and in the course of his exploration, he penetrated as far north as the shores of the Lingayen Gulf, and this region was formally created into a province with Bacolo!' as capital, the new province occupying a vast region, including parts of the present Pray路 inees of Bataan, TUl'inc, and Nueva Ecija. The fir st of two great rebellions broke out in the province in 1645 as a result of the injustices connected with the collection of tributes, and spread quickly extending to Zambales. The second revolt took place fifteen ears later as a result of the fordble employment ill the natives in the work of cutting timber and of the failure of the Government to pay for large amounts of rice collected in Pam~ panga for the usc of the rbyai officials. The leader of the rebellion was Franci~co Maniago. It spread rapidly among the inhabita~ts of the towns along the banks of the Pampanga River, but was su ppres~

INDUSTRIAL MANUAL sed after dra stic measures were taken by Governor~ General Manrique de Lara. The attempt of Andre~ Malong to annex Pampanga to his projected king. dom of northern and western Luzon occurred at this time. Malong sent an army of 6,000 men under Melchor de Vera to effect the conquest of Pampan. ga o Thi s army reached Magalang, but here it met the Spanish forces which forced it to retreat. Pam路 panga was one of the fil"st pI'ovinces to start the Hevolution. TAItL/'C PROVINCE 'l'ARLAC PROVJNCE is situated in the central plain of Luzon. Lake Pinac and Lal(e Victoria furnish good sport for wild duck hunters. Medicinal springs are also found in the .province, the two most notable of which are the spring of O'Donnell, in the municipalit~路 of Capas, and that of Sinait. The popula. tion is composed of Tagalogs, 1I0canos, Pangasinsnes, and Pampangos, emigrants from their respective regions where the struggle for existence is keen. The Province of Tarlac was one of the latest to be created dUring Spani!;h rule. Formerly the region was shared by the Provinces of Pampanga and Pan路 gasinan. Tarlac is a province of late development, with the possible exception of Tarlac, which was

LA UNION PROVISOAI

CAPITOL

PHILIPPINES founded in 1688, otherwise not one of the towns which belong to the Province of Tariae, was founded earlier than the beginning of the eighteenth century. Samban was created in 1710; Capas, in 1712; and Paniqui, in 1754. PANGA$INAN

Northwestern Pangasinan which occupies the peninsula bordering Lingayen Gulf on the east and the China Sea on the north and west, and the central and cllstern regions include the main portion of the Agno River delta and the drainage basin. Co· ral reefs, recent and living, fringe the shore lines. Harbors are found at several places along the coast, particularly, at Sua I where ther e is deep, well-pro-

tected water.

Except for coastwise trade, Sual is

not now utilized, although during the Spanish regime it was one of the centers of forei gn commerce. Minera l spr ings are found in l\[angatarem, Balungao, and Pozorrubio. The eastern portion is part of the central Luzon plain built of the flats and delta of the Agno, and makf's"Pangasinan one of the richest provinces of the Archipelago. Rice, tobacco, and coconuts al·e the principal products. The rice Illnds ;'Ire so extensive and \' fm'tile that dur-

129

ing hard times thousands of people throughout the Ar chipelago, especially from the 1I 0eos provinces, flock 00 Pangasinan either as settlers 01· as workers dul"ing the harvest. The province is called the g ranary of the Philippines. The famous Calnsino hat is made from the leaf of the buri palm. )langaldnn is famous for its indigo blue black dyes. A native kingdom existed in pre-Spanish times in the region which now belongs to P angasinan, which was called by the early chroniclers '·Layug na Cabolon n". At the time of the arrival of the first missiona.·ies in this region, the king was Kasikis. His capital was Sapan Pulapar in t.he neighborhood of the present town of San Clidos. The coast towns of Pangasina n, like those of 110cos, we re known to Chinese and J apanese traders long before the arrival of the Spaniards. Chao-Ju-Kua, a Chinese geographer of the thirteenth centul·Y, recorded the existence of a region called Li-King-Tung, w!th wh ich the Chinese traded, which is believed to be Lingayen. The exploration of Pangasinan began immediately after the occupation of Manila by Lf'ga'ipi. In 1585, Frar.ciscp.n missionaries SllCceeded in IJene.trating into the kingdom of "Layug J1a Caholoan" In 1574 Limnhong. after hi s r epulse at

1}0

THE COMMERCIAL & INDUSTRIAL MANUAL

Manila, appeared with his vasl army at the mouth of tho Agno River and tried unsliccessfully to found a ~ett.lement on its banks. LA UNION

LA UNrON is the most mountainous of the Ilacnno provinces, with exception of Abl'a. Potter~' clay is found pl'acticall~' in evcl'y municipality. Salt and lime ure products of all the coast towns. Dnriguyo, San Fernando, Pandan, Tahoe, and Santo Tomas al"e ports that offer fine ulwhoral"e; of these San Fernando, the capitul, has the best harbor. Steamers that ply between Aparri and l\lanila annually ~top here for tobacco. The region now belonging to La Union was explored by Juan de Salcedo in 1572. P. San Agustin records that the first lown touch('d by Salcedo wus "Atuley." No such town exists today, but undoubtedly it must have been in what is now La Llnion. Another town visited by Salcedo was that of ~urao, now Balaoan. In these to\\'n ~ S:tleedo met with vi!!,orons opposition on the part of the natives, espe Jall~' in the inland town of Purno. An important event in the carly hi story of La Union was the attemp~ of Malong in 1661 to make this region a part Of\~iS kingdom, Malong sent an al'my of 3,000 men,der the connnan'd of

Guma llos and l\1akasiag to subjugate the 1I0cano country, 'rhis arm,V encountered Lhe Government {ol'ces sellt to oppose it at the town .of Agoo, t r ium路 phuntly made its wa~' through La Union up to Vi. gan. ILOCUS SUR

ILOCOS SUR is the narrower of the 1Iocos prov. inc~s. Pall<l!m is the principal port. The land is es,ecinlly ndapted to the growth of maguey, a fiber whiC'h constitutes the principal export. Sugar is also exported in qt1antities. I ndigo was once :l great source of wealth, but production has greatly declined as a result of the manufacture of cheap aniline dycs in Germany. Most of the l)eople ?rc Jlocanos but there are also some T inguianes. Igo路 rots, and Negritos living on the slopes of the Cordilleras, The exploration of I1ocos Sur began in 1572, b~' Juan rle Salcedo, to whom !locos Sur as well as Tlocos Norte owe much of their early prosperity. He was the founder of the Rpani!=h city of Fel'nandina which he erected in the hea,路t of the ancient and Pl'osPfI'OUS I1ocano settlement of Vigan. In direct contrast to Salcedo's henef icent influence was the govt:]路hol's. The seat of government of Nueva Ecija

PHILIPPI NES was transferred at vurious times. Baler was the first capital, Bongabon the second, San Isidro the third, from whe re it was moved to Cabanatuan. NUEVA V,ZCAYA

The Province of Nueva Vizcay.; is in the north

central PUl't of Luzon.

With many hectares of fer-

tile public land, suitable fOl' rice, tobacco, sugar,

beans, potatoes, coffee, cacao, coconuts, and '.baen, as well li S virgin forests filled with all classes of valuable timber. Nueva Vizcaya fOl'nlS part of the Cagayan Valley and is the gateway to and g ranary of the tobacco-producing Provinces of Tsabela and Cngayan, whose valleys arc fertilized by the waters of t he Cagnyan and Mngnt Rivers, arising in the forest-clad hills nnd valleys on Nueva Vizcaya . 'lIhe cli matic conditions of Nueva Vizcaya arc unsurpass. ~d and in places the climate is similar to that of Bnguio. The appli('ation of modern methods of salt production at Salinas is ~ne of the activities of the provincial government in tne development of natural \'csotn"c~s. In lS39, Govern~· Luis Lardizubal, upon thc adVICe of the Alcalde Ma)lO\' of Cagayan, issued an (I)·del" creating Nueva Vizc.1.~'a into a politicomilitary province. The early hi.s,tory of what is now Nueva Vizcaya is the histol'Y of t e missions of Ituy

NIIWLY CoNnRuC"rBI) BATAAN-ZAMDALB$

131

and Paniqui. In 1609, the mi ssion of !tuy was or· ganized, and the early missionary centers established in this rcgion were the now defunct town of San l\'1iguel, founded in 1632, and the town of Aritao, founded in 1665. Bayombong was in the beginning a missionary center of ltuy, as was Bagabag. Gaspar de In Torre scn t in 1745 an expedition under the leadership of a native soldier by the name of Lorenzo Oipagang. Three yeal·S aftcr anothcr expedition was again dispatched undcr thc command of Vicente de Ibarra, a Spanish military officer, ably seconded by a native soldier by the name of CUal"to Maddela. In 1832, Guillermo Galvey led another expedition through these regions which traversed the towns of Bayombong, Lumbang (now Solano>. and Bagabag. The most famous of all the expeditions through this tenitory was the one led by D. 1\1ariano Oscal'l'iz in 1847 and 1848. H e explored the Tfugao countr y and visited Pals nan. ISABEI.A

This chicf tobacco pl·ovillce of the Philippines occupies the upper part of t he Cagnyan Valley. The province possf!sses vast rcsoul·ces. The forests of t he Carab~1I0 and Siel"l"3 Madre are SClll"cely touched because of the lack of transportation. The people

!"'TII ~ ·PRO\, IN CIAL R OAI) TIIROUGU

HAl\DWOOD FOl\B$T

132

THE COMMERCIAL & INDUSTRIAL MANUAL

arc principally Tbanngs, but on t he plains thl'l"c arc al so to be found many Ilocano settlers and traders. The Sierra Madre Mountains arc peopled by Catala ganes, lIonggotes, Bunganases, and Mayoyaos. Isabel a is much larger than Cag~yan but it has only one-half the population. The Province of l sabela was created, with IJagan as its capital, in May, '856, nut of territories belonging t o Gagayan and Nueva Vizcaya. When the missionaries arrived, they chose the town of Gabagan as a center, which later was called San Pablo, and was the headquarters of mi ssionary propaganda. Moreover, P. Pedro Jimenez, as early as 1567, carried his religious movement to t he r egions of Gamu, Ilagan and Itugud. In 1763, stined by the influence of the Silang Rebellion in 110cos, t he people of Isabela revolted and were led by Da bo and Juan Morayac. The centers of rebellion were Hagan and Gabagan. A historical spot of Isabela is the little town of Palanan near the Pacific Coast where General Emilio Aguinaldo maintained his headquarters until March , 1901. GAGAYAN

The Province of Cagayan occupies the lowel" basin of the Gagayan River, \vhere caves or gl'ottos, t h e largest of which, famou~ for the edible birds'

nests that are found at Mount Quira. The Cagayan River was for years its one commercial outlet. Rafts and ba-ncas are sent up the river for tobacco which is stored in the warehouses of Aparri where boats from Manila call once a week. The opening of the Cag-ayan Valley motor road with through connections to Manila has given another outld for tons of produce. The Abulug River is deep, but very swift and infested by crocodiles. The p eople are Jbanag and Ilocanos. There are a lso many Neg-ritos on the low hills of the marshes, Aetas on the Sierra Madre and Kulingas and Apayaos on the Cordillera. The narrow strip of t erritory a long the northern coast of Gag-ayan, ancl the northern pad of the Cagayan Valley, were among the regions of Luzon early visited by the Spaniards. In 1583, the political division of Cagayan was recognized. The exploration of Cagayan began during the administration of Guido de Lavezares (1572-1575). The first explorer was Juan de Salcedo, who in 1572 visited some of the northern coast towns like Pampi ona, Abulug, and Aparri. Another well known adventurer in this region wa~ Captain Juan P. Carreon, who led an expedition m 1581 for the purpose of driving away the Japanese corsn~'r Tayfusa who was then threatening th e coast

STANDARD PUBLI C MAIl!.:1IT Bl.lILD1NG-CALASIAO, P ANGASINAN PROVINce

PHILIPPINES towns of Caf!ayan. Carreon, after driving away Tay· fu sa, founded the town of Nueva Segovia (now Lalloc) on the banks of the Cagayan River and explored the neighboring regions. I n August. 1898, the revolutionists under the command of Colonel Daniel

133

Tirona took Aparri from the Steamer Luzon, formerly the Campania de Filipinas. and then proceeded to Lal-loc, and on the 31st of August the revolutionary army entered Tugucgarao. Civil government was established in Cagayan in September, 1901.

SOUTHERN MIN DANAO AND SULU HE SOUTHERN frontier of the Philippines embraces the region of South Mindanao, the Zamboanga Peninsula, the Basilan Group and the Sulu Arrhipelago, with an aggregate land al'en of 24,571 square miles. Virgin forests cover two·fifths of the entire area, while three· fifths is agricultural land, awaiting transportation facilities to awaken vast development and rich resources fol' the nation, At the present time only some ten·per cent of the agri. cultural lands are under cultivation, Traditional histories of Sulu, indicate that the set· t/ement of Suug, n0l'\ Jolo, on the island of Soolo'" now known as Jolo, was already well established OIlring the ei;hth centur,y of the Christian Era, In ~ncient Malay chronicles, the Sulu people have been leferred to as the "Orang Benjar", and the Bible in the Book of Kings mentions pI'ecious stones a s coming from the uttermost part of the eal'th, whi ch historians incline to believe refers to diamonds from Borneo, and pearls from Sulu,

THE ANCIENT CHINESE are reported as having made l'efel'ence to this region as their "Gold Neibhbol'u", The Bandjarmasin Sumatrans had established them3clves in Sulu long before the birth of the kinf"d(lffi-building Ken Arak, who built the Kingdom of Singossari out of the ruins of the em· pire of S r j.Vishaya in the Malaysian islands, out of which there developed in the thirteenth and (our· teenth centuries, the great empire of Madjapahit, but the Sulu people never willingly submitted to the rule of Madjapahit, and resisted even as they ai!;o resisted against Spain, Java took the place of Sumatra as the center of governmellt when Macljapahit grew to be the leading state in the Malnysian I slands, lind the Javanese uccame a powerful and active people, who migrated in large numbt'I'S dUring this period, establishing themscJv(!s in Cot9.bat", :lJong the banks of the y'reat Rio (jl'ande and in th(' region around Caraga on the Pacific Cnrst, attrActed by the nume!'ous placer mines, anri favorable agricultural lands, Mohammedanism sprcad throughout Malaysia during the fourtcenth century, In 1478, Raja BG-nang conquered the capital of the great empire of l\ladjnpnhit, and Java since that time ceased to be n center of power and the Mohammedan empire of Malacca became firmly established, Toward the end of the fourteenth century, Makdum, a noteri Ara-

bian scholar came from Malacca making numerous converts to the Islamic fait.h in the islands of Swu, particularly in the islands of Bevansa and T apul, and Mohammedanism spread to parts of the Islands of Mindanao, producing profound results in the lives of the -people of this l'egion, which has withstood the teachings of Occidental civilization to this day, The Mohammedan empire of Malacca was destroyed by Portugllcl'e coioniz('l's about 1511, Spanish influence in Mindanao is believed to clate back to 1526, when Garci:l Jofl'e de Laoisa, to· gethel' with FrRY Urdaneta, leading an expedition from Cortina, Spain, landed at the town of Polloc, Saavedt'a vi sited the island of Sarangani outside Davao Gulf on his way to i\'loluccas in 1528, and in 1543, Villalobos visited the towns of B:lg:lnga and Manay on the eastcrn coast of Davao, fl'Om whence he proceeded to the island of Sarangani, where he planted corn and l'~ared a good harvcst to feed his soldiers, which undoubtedly was the first farming ever dOll'e by an alien people ill Davao Province, Miguel Lopez de Legaspi also touched Dapitan in 15(ll), Tn 1596 Rodriguez de Mnguindanno occupied t he town of Tampacan in Maguindanao, and attempt_ ed to coloni'1.e and restrain the Moros from their pirntieal activities, The Moros put up n stiff I'esist· ;:Ince which fOl'ccd the Spaniards to abandon the place,

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'Ihc Snaniard!< by 1623, howev!!l', wert~ appurentI,v morc successful in their expeditions to Zamboanga, against the 1\\01'0, and in Hi31, Spanish missionaries al'e reported to have already stnrted conversions in the region around Dapitan in the northerl! territory of the Zamboanga Peninsula. In 1636, with

the town of Zamboanga as seat of Spanish control,

:t was reported that the

govcrnol' of Zamboanga had defeated the famous Datu Tagal, brothel' of the Sult;1I; of :'Iinguindnno off the coast of Punta Flecha, which victOfY gavE the Spaniards a firm hold in Southem !'.iindan:to, where fortifications were erected, known as Fort Pilar at Zamboanga. By 1640 these early colonizations by the Spanish, however, were abandoned, due to dangers which i.nreatened the Spanish government at Manila, and there followed some two hundred years when the Moros were free from Spanish inte~erence, and the Sultan of Maguindanao ruled ove' the gl'eat Rio Grande Valley. In 1851, the Spaniards reappeared and captured Polloc and converted t e town into a naval base, which became the center of Ollerations agai nst the Sui us, which was the real beginning of a more determined campaign against both the Maguindanao alrd the SUit1 Moros, Seven ye I'S after the capture of Polloc, however, Governor Figucnoa of Zamboanga

ilnd Agustin Bocallan, a Brigadier in the Spanish Army, J>l'essed the Sult.an of Magu indanao to cede the VlIst telTitory of Davao to the Spanish governm(:nt, Jose U~'anguren, upon whose inspiration this telTitol'Y had been IIcquil'cd, was cOlllmissioned to pacify the J'lIOI'O inhabitants and to organize there a province, So, in ]847, he converted Davao into the province of Nueva Guipuzcoll in honor of h is home province in Spain, But this province was aboli!!hcd to give way to two I)olitico-military coma11danciad of Bislig and Davao in 1858, anti which, in turn, were merged into one district ca lled Davao in 1860. The establishment of the Spanish au~hority in Davao having been completed, the Spaniards now tu\'ned to press with ",ven ~Tefl.ter rieterminution on the sultanate of Maguindanao, In ]861, th l'ee expeditiolll' wel'e sent successively against the Sultan, Th<' fin:t, led by General Salcedo, s ucceeded in forcing upon the Sultan and his father, Datu Arninli, t he recognition of Spanish authority in )Iaguindanao. Those who were irreeo1\'cilablc retired to the interior district of Pagaluflgan. ~rom this period, beginning in 1862 with the establishment of a naval base by the Spanish at Tamontaka, Spanish authority became firmly established, but their campaigns to subjugate t he Suiu

PH ILIPPINES ~bs('!nt(! su('('ess ant! it is still a legitimate pride of t~(: Su lus that of all the Moham路 medan tribes in the Philippines. thei rs alone was t he only onC' thnt was not wholly brought under the ab~oJutc I'u le of Spain. By the end of the t hird quarter of the nineteenth century. the Spanish conquest of Southel'1I Mindanao and Sulu, which had started at Tampacan in 1596, was vil'tuall)' completed but the MOl"os {cnlUl'C!; and modes o( liie suffered no challg~ bceuusc of their eont.1ct with Spain and Islamic influence dominated their spiritual and social life, and modes of Sumatran and Javanese chUl'acterisls dominated their matedal ways, and they steadfastly muintain<:d their own system of ]:1\\,5 llnd government. American contact with the M01'OS struted on F ubru3ry 5th, 1842, when the government of the United States, rcpl'~ented by Commander Charles Wilkes, obtained a IH'o'mise from the Sultan of Sulu to give protection to all'American vessels, their commanders and crew that ~ght be found within his dominion, Fifty-seven ye!\{s latel', in l\Iay 1899, Spuin evacuated this region a~d the American forces occupied the tel'l'itory, and taKing possession of this region, recognized, the sovereigq powers of the SuItU!l of Sul u as head of a state d~tinct from the rest

;\[oros was not 3 n

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of the Philippines. This was arparent from the context of a treaty signed between the Sultan of Sulu and Genel'al J. C. BATES on August 20, 1899, whereby the Sulu Arch ipelago was allowed to trade freely ,vith the rest of the Philippine Isla nds and the Sultall of Sulu was to retain t he power to try and punish iHoro offenders with the United States authoritil.'s agrceing to deliver such offenders who might come to their possession. In this treat.y the Sultan agreed to supprcss piracy, and he and a number of his infh1(~nti al datus and hadjis wel'e to receive monthly salaries from the Ameriean government. Ac..:ording to Al'tiele 11 of the Bates T reaty. "the United States will give full prote('tioll to the Sultan llJ1(1 his s ubjects in case any foreign llatioll should attempt to impose upon them." Thc Bates Treaty, which Will; said to be the resuit of an advice from the Schurman Commission, was, however, abrogated by the United Slates go\'I.'rnment on Murch 21, 1904, after it had been vigorously attacked by General \Vood and Major H. L. Scott in 1903, In the meanwhile, the government of the so-called l\[OI'O P r ovince was being organized undcr t~e provisions of Ac.t No, 787, a pprovcd by the PhiliJJpinc Commission on June 1, 1903. This

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T H E COMMERCiAL & INDUSTRIAL MANUAL

government was to look after the affairs of this region, where the inhabitants wel'C predominantly 11,'1 0hafl'!medan~. Zambonngn was made the capital of the i\lora Province, MOHO P IIOV!NCE

As soon as the Moro Province was established, a goal was set, which was the ullimate unificatlon of the Christian and Mohammedan Filipinos into onc body politic. There has been no deviation from this po!icy ever since. O l l Dcc<.mhcr 20, 1913, a new step was taken in the fUlthcl'ance of this policy by the 3!)Pl'OVU! of Act No. 2309 which changed the name Mil!(h~lI(lo «1ul Stth!. This Department, as a new [ol'm of government f or the Mohammedan prov inces, was finally established on Ju ly 23, 1914, when the Phili ppine Commission, by Act No. 240f:, extendt.d to this region the gen· end laws of the country and the form and proce· (lures of government followed in the regularly or· ganized provinces, witli eel'tain limitations in hal'· mon~' with the spec ial ~Hlitions found within the territol'Y embraced. But this was done with the understanding thnt the limitntions were temporary, t.he ~oal being the conversion of the department dis· tl'iets into regular pl·o\'inees.

l\·ro)'o Province to De}!C/l'flll el1t of

One day after the approVilI of Aet No. 2,108, which established the Deoartment of Mindamlll and Sulu, the Philippine Commission passed Act No, 2409, creating justice of the pence COUI'ts ill the )10hammedan provinces, This act was followed in its wake by a new problem, especially in Sulu, where the Sultan had established his own courts which he em· powered to try cases brought before them by his subjects, This difficulty was soon solved, howev€!". when Sultan Hadji Mohammad Jamalul Kiram agl'eed, on March 22. 1915, to relinquish the powers of his cOUlts to try cases, except those invol\'ing purely religious questions. The Sultan. furthermore, agreed to be I'ecognized only as the titu lar spiritual head of t he Mohammeda n church ill the Sulu Arch ipelago. This voluntary abdication of the Sultan in favor of the Philippine govel'nment removed that which could have been a serious obstacle to the rapid unification of the Ch ristian and Mohammedan Filipinos. With this act of the Su ltan, a new gain had been made. And still another step towards the goal of unification was taken when on February 5, 1920, the Phil iPll ine Legislature, under the Jones Law, passed Act No. 2878, abolishing- the Department of Mindanao and Sulu and plnring the supervision over the affairs of this rcgion under the Depart-.

PH[LlPPINES n1cnt of the Interior through the Bure/lu of NonChristinn Tribes which was cl'eated. This change brou$!;ht this region closer than ever before to the Philippine government at Manila. Zamboul1ga cC(Jsefi to be the ca,pitol of Millda1lC.lO alld Sulu. Wilh the appointment of Teopisto Guingona as first Filipino director of the BUl'cau of Non-Christian TribcÂˇs, for the first time this I'egion was brought under the direct influence of a Filipino administ ratol". LIMITED SUFFRAGE

On September 17, 1935, the 1\'Ioro provinces were allowed to choose their own delegates to the National Assembly in a modified form of election under the Constitution of the Philippine Islands, which they aho helped frame and accept. It is noteworthy that within a brief period of le;o.s than four decade;o. A medca has accomplished more than what Spain was able to do throughout the span of several centuries, The policy of at_ traction initiated by the Americans, which was made even more !'<o by a progressIve grant of pal'ticipation in the administration of local affairs to capable Mohammedan Filipinos and other nonChristians after the institution of civil government in this r!!gion, has produc!!d a 10\ of better understanding b!!tween th!!m and their Christian brothers, Where in th!! past hostility characterized the Moros'

1)7

conduct towards government institutions established in there and their attitude towards the Christian settler s was decisively unfriendly, today acceptance of such institutions and friendliness towards the settlers increasingly prevail. Even in the modes of dress and in the other features of life, the effects of the influence of the western culture as brought in by the Americans are rapidly becoming visible, In agriculture, the~' arc growing less nomadic now than before, having evidently developed a more concrete sense of appreciation of the value of permanent settlement on the farm, a new trait undoubtedly acquired by them through their contact with the Christian settlers, The years ahead promise a still closer understanding between the non-Christians and their Christian brothers, auguring a more prosperous period of peace in this region, Sultan Hacij i Mohammad Jamalul Kiram II, "the shadow of Allah upon earth," died on June 7, 1936, after over four dec.'ldes of fruitless rule, at his palace in Maim bung, the ancient capital of the once llowerfu! Kingdom of Sulu, on the Island of Jolo, Upon learning: of the death of the Sultan, the ~overnment at Manila announced , through Judge Teopisto Guingona, director of the bureau of non* Christian tribes, that it would not recognize the successor to Sultan Kiram, which means the end of the sultanate of Sulu.

MOHAMMEDAN FILIPINOS UNDER THE COMMONWEALTH* HE MOHAi\1MEOAN Filipinos ar!! so closely bonnd to their lund that to dissociate the two is to spell tragedy to the Filipino na tion, Until recently, l\'lindanao and Sulu had been neg_ lected by pa .. t legislatures, A plan to separate these southern i:;lands from the Philippine

Archipelago. caused some stir among the people, But it did not lead to anything, Today, talk of slicing off a minute part of the Mindanao group is liable to cnuse trouble, The 1\10hammed!ll1s, no less Filipino than their Christian brothers, will fOI'ever claim, "Strangel', this is ours." At last, und!!r the Commonwealth, Mil/danao and its Mohammedan inhabitants, al'e given f.1l audience, In the mind of the misinformed Filipi.1Q citi7:en, tales of mOI'o outlaws, juramentados, brutal murders and wanton thieveries are still fresh, THE DAILY PAPERS have been full of them for yea rs, conjuring up pictUres of bloody crimes â&#x20AC;˘

/j~ IhTU 0.""" A"'~D " sn~ " , .t.'M"/'/Unl'''' lor 8"/,,.

and blind fanaticism that make even the stoutest Christian shiver at the Illere mention of krises and barongs, But happily, the picture has changed for the l\1olUl.nlmedan Filipinos who are now given a new

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lease of life, as it were, under the congenial terms in the national scheme of the Commonwealth. For this desimble state of affairs the 1\'101'05 owe much to the Tydings-McDuffie Law, which allows them greater autonomy, granting them the right to elect their delegates to the Constitutional Conv(!ntion. Untrained in Politics, and without having Icumcd the use of the ballot, the Mohammedans like their Christian brothers exercise for the first time their right to vote. Feeling as never before, that they belong to a nation, common and indivisible, and as sllch should bp justly l'epl'csE'nted and considered, Mindanao delegules insisted that asscmLlymCJl of their regioll be cicct.e(! by the people instead of being appointed as they used to be under the J ones Act. Thereby. the question of national unity in which the Tslamic clement has been a bugaboo, is now definitely solved. ,-!'Iindanao solons, vested with the same rights and privileges as the legis~ latOJ>:.hom other districts, eel themselv(>s a useful and I'esllonsible unit of the national government. The people they represent, Wh, mule)' circumstances

less fortunate than their Christian brothel's have been l'eckoned as a liability. arc now an as!>et to the country. It takes proper understanding and b1'O:)(1 sympathies to change the common bewildered b!!\ief that the l\'lol'os are again!>t the Filipino aspiration for freedom , Theil' life !lu r suit involves a tendency to hate domination by another. Upon this cognizance, any attempt to absor b them as a vital part of the Filipino race ,'equires the utmost civil ity based on corrcct judgment and fairness. Thus did IorlnC'l' Governor-General Frank l\'fur~ phy t,mch the right chord when he IOl'lllUlated a "Moro New Deal P olicy" workable on a basis of goodwill and confidence, in a manne)' thnt prejudices should be minimized, personal property rights of the special provinces !'espected, I n this direction, much will depend on the disintel'estedncss of the govern~ ment authorities to administer the non-Christian affai!'S through a wel1-o~'ganized agency and with a ):t'l'adually adjusted policy of attmction and ('oncent!'ation of authority. 11hc effectiveness of the Murphy "New Deal Policy," which 6r. present admini stration has un-

M"YON VOLC"NO-ALBAY

PHILIPPINES failingl~' followed , deserves mention here, It has hccn felt during the first year of the Commonwealth, The politicol status of the Moroland has been raised to a highly satisfactory level and nowhere than in t his region ha ~ the government appropriated keener interest, despite its remoteness to the centers of adivities, It must be emphasized that some insignificant difier{,llces in local political features distinctive of the past form still prevail, due to the customs and traditions of the natives which cannot be effected radically, The gl'eat mass of the people however, are realizing their backwardness, caused hy their indolence and stubbornness, They are beginning to embrace readily any well-planned objective of the government in favor of il more local political autonomy, They concede that their complete wilJingne~!; , good faith, {'nd participation in the body politic, will largely secure their welfare, {Iltimately, they wil~ have to regenerate their cru\l<:: past and by rlO\VJl their belligerent ways ill profnence for national coojleration, They are now lookin(! forward, for instance, to !he nlOI'e efficil!llt C:1{ol'c'ement of law and order among the Moro people, wi't.h the employment of natives in cllITying out police work. This has been pl'oved most p.ffective, since oro policem('n aloe

139

closer to the people themselves, hence they are well suited to the task of handling local cases, With proper instruction and training, the native personnel can be relied upon to keep and promote peace as perhaps no other body of men can, Under the Commonwealth, l\.'1ohammedan FiJipin'os are an invaluable asset to the national economy, Measures projected to enhar.ce the economic, s.-.eial nnd political statuI'> of the Moro p(!()ple, should descl've <\dequate concern on the part of till' government, The pl'esent plans show a bright outlook, lind results are forthcoming, It is fortunate that all the legislators of the specially organizl'd provinces compose the Committee on Mindanao and Sulu, Measurl'S affecting that l'er:ion and its inhabitants are l'efelTed to and decided by thi s committee for I'ecommendation to the Assembly, What is more thankful i" the fact that most of the legi !<lative pl'oject s (or the development of Mindanao and Sulu ha vc been c(lllceived and sponsored by these repre!ient a tives , It should not be difficult to visualize that continued subjection to Christian authorities and officials ill breed 1\'101'0 ant ipathy, Enlightened members of the l'I'Ioro population however, feel and

THE COMMERCIAL & INDUSTRIAL MANUAL

140

understand and think like the educated Christian folks. This is a happy indication that they have the unity of thought, of love and homogeny with the rest of the elements of the Philippines .... Whatever steps the Commonweal th will adopt to Se(~llre the projected developments of the Moham-

merlan :!'cgions, as repeatedly promised, the Mora constituency today and forever will exalt the sense of justice and generosity of our new Government and will consider it a debt of gl'atitudc to those in whose hands the destiny of the people of Mindanao and Sulu shall have been shaped for po~tcrity.

A NEW PROBLEM SPRINGS UP IN SOUTH Commerce and Ind ustry in Mindanao Provinces in Flourishing state, but foreign elements in complete control of the situation. HE NEW problem of the South is not onc of development. Thi s problem is slowly but surely being solved A network of roads links the rich plains and plateaus of Mindanao with the

::~~::~tso:l~t::t s::;:;s:~e \:e~ef~:: o~t~~: ~:~:antd;;ro:::i::::'::~II:;a:~e:.:\:~:~et~: :~~ a;:u

South. The Filipinos ~He mere consumer s; the hulk of the trade in big center s of popu lation is not in their hands. In the newly inaugurated cities of Cebu, Zamboanga and Davao, the control of domestic t rade is in t he hands of foreign clements. The predominant business element in ~he city of Cebu is the C h in~se, the Japanese playin:.;: ohe second role with Americans, Syrians and Span,

inrds making up for the I'est. THE FILIPINO STO REKEEPER S a re struggling hard to compete with their foreign competitors. Even products manufactured by members of our associalions are retailed and sold in Chinese and in other stores belonging to foreign nationalities. The Japanese deal excl usively in Japanese-made products, J understand that F ilipino manufacturers arc fOl'ced to consign thei r goods to the Chinese prer.isely because there ~lI'C no Filipinos to handle their goods. 'rhe ol'ganization of Cebu as a city is bound to help local business. Unless the Filipinos from the stal-t carry an aggressi\'e campaign to share in t he business opportunity offered by the new city, the fore ign elements will be the ones specially bene fited, which means the continuation of the dominance of foreign elements in the business of t he eity, in~

A Japanese factory is at present manufactul'I'ubbe!' canvas shoes in Cebu and is supplying Â°8v EI.' u,:o Ql,lIRISO â&#x20AC;˘ .I10''''1Itr, Nol;"nol e'''n"m;c Prolw;oni' m

" ...... iali"".

not only the city but the sllrrounding regions as well. This factory is one of the most important mAnufacturing concerns in the City. The new ci ty of Zamboanga is dependent upon foreign clements, especially the Chinese who control from 80 to 85 o/c of the local trade. The Chinese also control t he manufacture of bl ack cOI'al jewelry, which is finding populal' demand, Outside of Zamho')p,nga the black coral jcwelries are being }l1llllicizcd as the products of Moro manufacturers, There are sever al factories in this city, but belonj!ing exclusively to foreign elements, One of th"'m is the Philippine Desiccated Coconut Company which is the biggest of its kind in the Philippine h:lands, This company c:.:ports exclusively its products to t he United Statcs. The Philippine Cutch C(.rporation, which is manufacturing leather tanning products and whi ch exports it whole output w the United States, is also situated in Zamboanga cit y. The Ishmd of Bas ila:l, included in the city of Zamboanga, contain::: two of the biggest rubber piantations in the Philippines. Thcy are the Ba;;ilan Hubbcr Plantation Company and the Amer-

PHILIPPINES iean Rubber Plantation Company. The Basilan Rubber Plantation Company is owned by a Swiss. Another rubber pianlation, org'anized recently and expected to produce rubber in five years, is owned by a Swiss of Filipino citizenship. On the island of Basilan is also located the Basilan Lumber Company, owned by Kuenzle & Streiff, I nc., a Swiss company. A few Filipinos in this island raise com and rice. By far the companies making the most money out of their investment in this island belong to foreign settlers. The city of Davuo is predominantly Japanese in bu siness. The Japanese in this l'cgion controls the retail trade, with the Chinese playing the second role. The city of Davao owes it importance to the abaca plantations, the most important of which being t hose of the Ohta Development Company, the Furukawa Abaca Plantation and the International Harvester Company. The first two companies are ru n by Japanese but employ about 70 to 80 per cent Pilipino labol" in their own plantations. The International Harvester Compa.py is an American corporation. It ship!l its produc'ts direct to its central office in Chicago. Anothel' important industry of Davao is the coconut industry.

141

ations belong for the most part to the Philippines, although the Japanese and American compan ies have also their own coconut plantations. In Davao I saw the Japanese imitations of Filipino textiles being sold in both Japanese a"d Chinese stores. Practically all the products sold in the local market are imported from abroad. There is a demand for Philippine manufactured products but lhe Filipinos in Davao have preference to agricultural activities and there are no Filipino businessmen of any importance in the region dealing in locally manufactured products. However, due to t he keen competit.ion existing between tbe Chinese, Fili pino and Japanese clements, there is an excellent chance of developing Filipino business in this region and of cl'eating local demand fo r Philippine manufa ctured products. In all these th ree ci ties the NEP A is popularly known. Filipino businessmen and government leaders are anxious to help the NE P A conduct an intensive drive. I found all the Filipino elements ready to support t he NEP A. They realize the precarious situation of Filipino business and await the help of those in a posi tion to extend it to them in the way of carrying out a campaign to place the control of the trade in Filipino hands. There.

TYPICAL SC ....~B.Y ON TIIB TII.ouo lI路RoAD ABING CoNSTII.UCTBD TO CoNNBCT MANILA AND TIIB BU;OL P.OVINO!S CAMARINU SUR PII.OVINCB

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THE COMMERCIAL & INDUSTRIAL MANUAL

is a wide-awake Filipino press in Ccbu, Zamboanga and Davao which could be used as a means of propagandizing the doctrines of the NEP A, In Davao the Japanese own thc only dail y press which puts out a morning and evening edition, There are 31)vera l weeklies in this city, however, which could be used as a medium of propagandizing the NEPA. The trade conditions of the cities visited reflect the same conditions existing in the provinces. Cebu. Zambonnga and Davao provinces are commercially dominal:ed by foreign businessmen, The principal occupation of the native inhabit.'mts in the provinces is farming; the principal products l·abed heing abaca, rice, corn, COpl"i\ and rubber. These product.<; aloe either sold directly to local wholesale buycrs or shipped to Manila for export abroad. In both instances the control of the sale and pm· chase of these products is in foreig n hands, It is a common knowlcdi\e that thc distributol·s or exporters of these products get more profits than the producers themselves. In Lanao I found a very unique situation. In t!!is province the Chinese sari-sari dealer is not only a distl"ibutor of foreign goods but is also the pl1l·cha~e of farm proc!uc~. The homesteaders and M01"o farnll"l"s get theil' , tlPPliCS usually from

the small Chinese tiendns and pay these in farm products, The Chinese usually buys at very cheap prices, They ship the corn and rice bought from the farmers in the province at nominal prices to a central agency in Cebu, or sell the same at the prices pl'evailing in the province 01' in the Ccbu market, Lanao is a rich agl'iculturaJ province proclucirrg cocomlt!', !'ice, corn and fruits, but the prices of these products offered by the Chinese are so low that agriculture naturally does not get the right encouragement thel'e, l\f«.>rchants interested in operating new markets for their products and build up new business would do well t.o look into the plan of ('stablishing cooperative stores in the provInce of Lanno. Th~ province of Cotabato is bound to be one of the dchest llgricultm·al regions of Mindanao. With the opening of the Davao-Cotabato road which will bl" finished in a year, there is sure to be a rush for settlement in this region. I had the privilege of being amon!! the first to go ovel' the new road from Davao to Cotabato and from Cotabato to Lanao and to witness the immense richness of the heart of }~indanao, The Chinese retail dealer is found eVHywhl!l"(, in t hi !'; province doing the same kind

PHILIPPINES of work and scrvicc that he is doing in Lanao, Hcnce, it is necessar~' abo to star t ill this region coopl'rat!ve stOl'es to prevent thl.' farmcl's from being cxploited, The situation in Davao is more 01' less similar to that found in Cotabato and Lanao, At present, howevcr, the p,'cdominant economic element in Davao is the Japanese wllo has cstablished even wholly JapaJl(!se communities in many of the farm sections of thf! provinces, The problem in Davao as I see it cor.'!ists in crcating in the Filipino farmers and settlerI'! a strong s~nse f)f econon'ic protectionism as a means ",f !lb'engthening economic solidarity among the Filipinos there, J()!o hns been commercially for a long time undel' Chinese control. The Chinese "un the prineip:l.1 business of the city of Jolo, haYing at the same time a lively community village which is the seat of much trade activity in import business as well as in the fishing trade, The Moros as a rule arc fishermen and agl'iculturists, which leaves the Chin~se practically without strong competition in the control of the local commerce, trade and industry, Prominent Moro however, and provincial and insular alive to the

143

significance of the economic protectionism movement, The trade and commel'ce in Palawan 1)I'ovince is in the hands of foreigners, especially the Ch inese, In this province the Chinese retail dealcr is the principal supplier of all daily necessities of the peop:", The teachers living in isokted places even entrust the collection of their salaries to the local Chinese deah~I' who buys for them all they need, retaining the portion of the sa lal'y not spent to be employed as capital in his business for which he pays nn interest to the teachers, The island of Palawan ir essentially an agdcultural region, The Chinese engage exclusively in trade, l\[inc\l))'o province has the same p,'evailing commercia[ and trade situation as that found in Pa[awan, The Chinese control the [ocal tmde and business. The island is now being vastly developed by homesteaders who derive their commercial needs from the Chinese. The Chinese do a whole lot of bllsine!.<s with the famlers and as a result the trade and commel'ce of this province are in their hands, On the whole I found conditions in the cities and provinces visited in a very floudshing state, r have n~ doubt that the establishment of the new citil's of Cebu, Zamboanga and Davao is a gl'cat

144

THE COMMERc[AL & INDUSTRIAL MANUAL

impetus to the dcveiollment of business ~nd trade in the South. A New South is developing rapidly, and in this deveiopmllnt we Filipinos should play the most active role as it is our duty so to do. EV<!l'ywhel'c have seen indications of growth. New lands arc being cleared. new communities springing \Ip. houses heing huilt, roads and bridges constructed and sC!t.tier s swampi ng into virgin fo rests and plains tUl'ninJ! them into ver itable f ields of productivity.

.<\.mcricans, Japanese, Chinese, Spanish , Swiss other nationalities arc just as busy as thl" Filipinos in these regions in making t he best of the opportunities offered by agriculture, commerce and indu5tl'Y. In Mindanao, J o!o, Palawan and Minrloro, there arc vast stretchcs of rich lands, fertile> forcsts and innumcrablc mineral and natural resou :'ces not foun d a"nywhere in the Philip p ines, Becausc fOl'l'ij!n capita~sts arc as a rule more enterlwising and more aggl'essi\'e, they have gone farther in the pioneering work of eXI)loiti ng the resources o~ tr.ese regions than have the Filipinos, Consequ~ntl y, today the best al-,.'lca, COCOllut and rubber plalltations in Mindanao an(1 Basilan I sland are ill f .... l'eign instead of Filipino ~ands, ~Ild

No~ only because it is to our national intercst to conserve for our nationals the resources of our cNmtry, but also because it is OU1' bounden duty to s hn!'e in their development, that it is imperative that more F:lipinos should invest more money ane attent.ion in the agriculture, trade and commer ce of the South,

JAPANESE PREPONDERANCE

In commerce, as well a s in agriculture, the Japanese a re holders of the controlling sha res in the province of Davao. Datu indicates t hat over threefifths of the foreign trade of the port of Davao passes through Japanese hands, In t he domestic retail trade, they a r e estimated as having the preponderance of from 50 to 60 pCll' cent. In agl'icultul'e, the pl'epoll'(lel'llnce of t he J apanese is even more decisive. According to the findings of an official investigating committee sent to Davao, there were up to 1936 57,350 h('ctul'es of lands in their hands, These Japanese land holdings constitute but a fraction less than one-half of the entire l\I'ea of the province of Davao under cultiva tion, Most of the cultivated lands in Davao have been planted to abaca. Thus Japanese

RUBRVOIR OP SORWOON WATIIR WORKS

PHLLIPPINES normally control from 70 to 80 per cent of the hemp output of the province. Jnpanese corporations engaged in agriculture lIumbered 45 at the beginning of 1935. They nre found holding lands mostly situated in the rich regions around Davao Gulf. The assessed value of their property, as I'ccorded in t he office of the provincial treasurer of Davao, amounted to P3.586,180.

tares, of which an area covering 1,322,687 H ectares is suitable for agricultural purposes, The total Japanese land holdings :lccol'ding to the Association's records is 1 % per cent of the total area of Davao, that is 25,586 H ectares, The percentage of hemp production by the Japanese residents is reported by the Association as follows: (n)

THE DAV,\Q JAPAN£SE ASSOCIATION

This ol'ganization was established in Davao in 1918 with 6,000 membcrs, 5,528 of which paid the annual membership fees [01' the year ]936. The Association publishes the Bulletin 111 the D(wao As8oci(llio1! which appeal'S th l'cc times monthly and is distri buted frec-of.charge among the membel's. The association also mantnins twelve primary schools with a total enrollment of 1,420 pupils, The Association u[so controls 25,085 hectares of land in Davao, divided into the foll ow! g classifications: (II) (b) (e)

\':\0,

Tht )'lri>'nte IlInd~ wit'l, title-I •• Q!'! ~I ec!~ r"~, Thl" pUblic ]011<18, BPI)li~d for under ~~11!5 IIpplic"tio"_ 1,71(1 E-lectu res, Tbe public bnd" "Pt'Li~d for und", l"n~" Bppli ellt ion_ 19,O'Z II ccln,"',

The total aren o f land in the Province of Daincludin~ the city of Dava is 1,929,724 Hec-

145

(b) (,,) (d) ( c) (I)

TotnE nurube, of hemp p'()IEuetd in the Philippine Iolan<l8 durinl! the na r of ]935-1.480,50(; bales,

TOm.~I';nt~,~~ ~~n3¥.~97.:u:i':I:~ :~~~rr.:'~~b:,o~ll{,ne";!~

Pt()llucoo in th" I'hilipl.in c ,"IDnd~, The hemp "rodueed b)' the J8pll"C!l C i• .,.ti","ted ~OZ 000 h"IC!l Or 70% of Ihe totnl pr()llu ctio n in the p,o ... in~c of Dn",,,... Total nu",her of hemp produced in the l'hili"I'incs hl~nd' during the yelL< of 1!l3(l- 1.332.8 n h"l.,. , Totnl ,number of hcrnl) I)rodu c~d in tho "rovil)C~ of D,w"o durn'l( the )'enr of ]!):HI-452,008 b"lcs, The ,hen,l l' p,?<luc ed by the Japnne,!!c durin!: the yea r of ](1.I(l I!.O-"t '.""'t ctl 31O,4(}S b"ll)ll Or 70% of tlo .. tOllll productIOn '1) the I" ov ,n ce of Da,·no.

The' llumbel' of the Jap<:nese residents ill Davao, 1935: '\Kri tult", ,,l .• Eml'loY"eI!" , .. ,' .. :'Ilall ufllctu ,in g <\: ind".tr;". Fi,h",i.,..... , , :'Ilcrchllnt .... , Lumber k Sn\\' ,\!ill.

~l:~t':ttl:: .

W ome n Qnd Childr"" , Tolal

THE COMMERCIAL & INDUSTRIAL MANUAL

146

~~~~~---------

The Association l'CpOl'ts amounts invested by the Japanese in Dnvao ns follows: ,\ gricuitu,"1 ... Commerce nnd Indu&tri c:o Lumb~r Blld SIl,.. Fisheri«.

:-.sill •.

!toads lind Other!.

1'33,000,000.00 12.500.000.00 2.000.000.00 300.000.00 1,000,000.00 "" 19.300,000.00

TOI,,!.

the me:ming of "Shokol.;,,;" ShO-CO"""CTCC 1,O-[nduBlry Klli -n~!oc i"tion

D~tp. of orgnniutiotl, ;\111."h 1(';, IIl:.!3. 1' he orRnnintion is for the town~ of 0,,,·,,,) :lUd :-.t". A"" only, lIl",nber~hip lec, "0.20 per

",on\h.

Date of reoro::,mi~ntion. J",\ Iii, Hl:H, The rcorl:,,"intiotl is fOT enti re pro,-inc" of Dn\'l1o. \ Dulletin publ ication, Begin"'",, "' Iny 1, 193-1. monthly. (8 hokok&iho), Thc Shokokuiho tantaius trlln~lnliollS of the PhHippim. l"ws, Tcgulntiolle. o rdinnnc~. nnd other art ide;: ne"usnry for bu!inusmen. Reg ;"tr",ion to the BurNlu of Comllll're c. :'Ilny \1. 1934. :'Ilomhly fcc. 1'1.00: Entrnncl' fee. ~IO.OO: PRlronn!;" f~e. 1'30.00 or mOTC per ~""'''''. ~ Number of "'cmbe .... at the time of reo ~niz(l(ion. about 35. Number of member! 01 pre." c nt. 121. PurpDlt': 1. Corrc,pondN,ee in ('onneClion with commerce ~nd ind uslry. 2.

A lISi~ l~n~c concernin!! co"lInNee nnd industr}·.

Arbilr~lion Or I."ace-mnkins: ;n controvcniC! concern,ng

commcrce "nd ;ndu"try. Inv e,lil(ntion and eomp;hll;On of ~latist;<l.'I e.. neernin:; commerCe "nd induat ry. Inlerpretation Or a'$;$t.~ncl' in any procedure or nny misun _ derstand,ng between the member! "",1 the Go"crnme nt Or in "ny iuturn"tio""! (tnc~tion. Study of the eonHn"r~i,,1 lind indu~lrllll 1 ,, 11'~ of the Philip pin"s lind their public"tion so nS to min,mi~e any pO~!lhle ";ob<lioll due 10 ignora nce.

'rmnsl"tioll businC!lS ;n gener"l.

Other ncce!snr~' "elivitie! in improl'elUent nnd progress In COlUme rce and 'ndu.try.

D irtcto" for t!JS7: Fl. Ihnnki. Prr.iden/. T. Tnku)''''''''. I'ict-Prui'/(nl. N. T nkeuchi. Trt(l. "r~r. S. iIIu\.I"o. Chicf Director. F. S"k"i. Direc/or. T. 'r"kekawn. DirtCIor 'r. IlI:u ehi. Director :'> 1. W"I",mClI'''' D,rrdor K. iIIo.i. D,'rfc/or S. Mcgnta. Dirtdo,. H . l';i)'o"'OIO, Dirt<lor.

!\likndo Studio. SlIn Pedro. City of DIlI'RO. (Photo Studio) , Dnvllo Photo Gnlle r~.. San Peuro. City of O,,"ao. (Photo Stu dio). 'rakeuchi. Shot en. San I'edro. City of Oavno. (Importcr. Go:n~ral 'nerclllwt). Kyuyo Bnur. 5"" Pedro. Cit~· or Oa,'ao. (ltcn. mcrchant). T. Aoki. San Pedro. C;~y of 0,,,,,,,,. (reir<);!hmcnt Parlor). lI nn1nki Shoten, GCllcrol mereh"nt ~nd importer. S"n Ped ro. Dn,'uo. :'Ilor~e 'railor Shop. tnilor ~hOI" !ion Pedro Dn,·"o. :'>Ior' Shot en. Gen. me.ehont. ~nn l 'ooro. Dava o. :'Ilo.isc Tnilor Shop. , ui lor , hop. San I'ooro. Do,·no. l"nn~endo. Condy rnclory. Sa n Pedro. 0""00. :'>Iori Sholan. Gen. mcrchnnt. SIIII Pe,lro, Dovoo. N. Tnkndn. wlllrh '''nker. S8n Pedro. Oll,·ao. Sun Drul,l Store. drug ~tore. i"".orlcr. i'ian Pedro. Oovao. Apo Fl ower G"rdell. f1owOlT la rden. TOIll"~ Cluudio. Oa,·no. K. K nwumnlo. gell. mord ","I. D,(n'lucrohnn. P 'WUO. N"kMol1e Hel el. H otel. "1"",,lInnl'.~ . O,,'·no. T,,;.iki Sbok"i. ''''I'Orl er. Iten. mer . :wu 1IllI,,,,rncturcr of Inru ri "nd ROY. M "",, l1 u "c~ . D 'lI'no. N. A~oi. rcfre~I"lIellt I'orlo •. :'IIIIlIlIllullu. 0,,1''' 0. S. Seo. "ar p'llI tr), shop. illllltllll""ClO. D"v"o. j\ ! nt~"o Shoten. 'mport,·r. Iton. me ... j\Ju gn llnn c,. Dnl·no. S. ~leg"llI. ",nnnger. j\liknu rut"u"",t. :'I l uiI"I"lIlc~. D nvno. H nk"ln~·n. I."... ,\ndn. PIIV"O. I" o bekn" 1I 0tel. hotc. hotcl. M(lKnUan()S. Dn"lIo. y. Wn",,,,,bl'. I"nor ehop. MIlK"lInnru.. DR,·no. llnrodn Bicycle Storc. bicycle slore. ~lnK"lInncs. Dn,·uo. Auhi Bieycil' etorc. hieyQlc elo r". :'>1"g"I1o",,,!. DIlvno. '·omino),u. bar. M"Knll"nea. Dnvno. Suzuki Bicycle Slore. bicyrJc BlorQ. Bailon. D Rvno. IC Shill\~d". cnrpentry sho p. Ilolton. Dnvao. Z. Ya",,,!!:iw n. till 6m'tlo ehop. Ri%tll. D"'·AO. K. N .. kn"unknrc. fucl ",crehnnl. Riznl. 0"V80. IC N"knndnk" re. fuct mcrchnnt. ]tin!. Onl'ao. ).r, 'Vo k"In"I~u. fuel nnd tnnbtlrk merchnnt. Hi."l. D,,,,no. i\I. Oy. IUlnber mcrehnnr. niul. D Ilvno. G. Ginon. gen. mer .• E.enrio. O~"no T . T odo. refre_"hmen~ I.nrlor. l'oncinno Rl'yt_~. O pl'ao. 1'a].[ekn",,, H "ruwnre. hnnl wArc merc)IIwt. importcr. Cl~'·cri". Dnl'IIo. A. }lin"",i. c"rpentr)' ~hOI). Cla,·crln. Do,'ao. O,,,,no Blpehmith nnd CurpClltr)' Shop. blnck$milh shop , Clnl'cri". Onvno. S. Kn","b"',,. I(en. mer .. public ",nrht. Onl'uo. K. IBobe. gcn. Iller .. pubtic mnrkl't. Dnl'~o. C. hobe. gen. IIlcr .• public <nnrket. D~"no, Ohta D e"clOI)!nenl Co .. importer alld "IT'orler. Talomo. D ~":lo. Yo,nc;do. C"ndy fneiory. Stn. Ann. 1)11""0. 1""""J:o~·". eil!!: mcrchnnt. S t ,.. All". 1)""110. B. Ohki. reire!lllncnt pnrh... !ittl. An". Dn\"l'o. Nnk"hn'"'' H otel. hOlcl. Stn. Ann. On'·no. Y. FlljilllITn. rcfre~hmcut p"rlor. Stn ..\"a. D"'·ao. F. SlIk"i Sholc", iml)nrler. lien. mer .• SIll ..\n 8. 1)"""0. 1\.urod" Tinsmith Shop. tins mith s hop. Stn. ,\ tl " . O,wno. F. I1I1 j;aawn. Rllcnl. !itn. Alll •• On"Ao. 'r. Ide!!:um i. ahip O:ITpenlcr. S t ll. An". D 'lI'no. 1(, Nnkllhntnn. lI,unch ow ncr. SIn. An". O"VIIO. S. },' u.ugen. Inunch owller. SI" . .An". D D'·80. 0'1\'''0 l'is hinK Co .. fi~hinK. Stn. ,\n A. Davno. ,'!.lit Bui Bu~s P" [(nisI",. importer nnd ,,~porler. Stu. Ana. On,'no. K. 'raknbntn. boarding hou~e. :'IliM"I. Dn,'no. i\I. TomohiTo. t;M,n ith ,hop. ~[illt~!. O",·~o . Y. Ogtsu. getl. mcr .• :'>lin t al. Dnvllo. Minlml Iron Work8. bl"ck>lmilh ohop. :'Ifillln!. D n"no. S. H onda. ca"d)' f"CIO ry, :'Ililllal. I)nvno. T. Bodo. r clr",h",cnt pllrlor. ;\lIntlll. On,·"o. Y. Osnwm. btack>lmilh ehop. lugbok. Guinn,a. Da,·~o. l' Nomi)·l\mn. le n. mcr .. lugbol;. (l"iungn. DOl'ao. S, Kuramoto. Ilen. 'nCr .. :'>lat;n8. Guinnllll. I)a,·ao. Y. Ynmllluehi. bl" c~ ,n'th shop, 'roril. DavDo, H . ](;yo"'oto Shotc II . importer. "ell . mer .. Toril. 1)"""0. Fukmmi Shoten. lien. ",er .. Tori!. D,,'·no. NakAllo Shoten and DIII,,,on Studio. gc n, mc r. lin d pboto studio Toril. 0111'1\0. Itayn Shotcn. bllr. Oalino. I)nvno. Ku,uyamll Iron Work ~. blaekSln;,h ~hop, O ~lillo. O,,',ao. S. Fuj;t~. grn. mer .. l)aHan. O)VII.o. S. Bnmn. Iranll'Orlation. D"li"o. I)nvno.

PHILIPPINES

147

TWO BIRDS - ON E STONE ' N PUSHING through with renewed VigOl' plans of long standing to s r eed up the economic development of Mindanao, the government is adopting the only effective means by which the two-fold problem of J apanese land-holding and of Mora indifference to progress may be met. I n no other instance nre such two vitall y important national problems so located that they may be confronted with but one vigorous gesture on the part of the state. F ol' it is clear that the fear of increased Ja panese penetl'a tio n into that rich island may be stopped only by encouraging Filipinos themselves to meet the challenge of their natural resources. Mr . Yasotal'o MOlTi, a Japanese editor who was a l'ccent Philippine visitor, is authority for the statement that if the Filipinos insist, the Japanese in and around Davao will be ready to pull out, lock, stock and barrel, and beat it for home, In that case, he says somewhat lugubriously, 1\lindanao will become a "Deser ted Village" and slowly revert to the jungle once morc, WE SEE, thel'efo re, that it is the duty of the As for U:.e perennial Moro problem, suffice it Fi lipino people to be prepared for some such dire to say that th~ OI,ly way of winning the Mor os over to the more peaceable pursuits of civilization conti ngency as 1'111', MotTi prophesies and for any other emergency that might arise, We must not is to make them realize the advantages of such pursuits, Difficult and uncertain livelihood inevitabl~ only seek to occupy and develop the lands as yet ltntilled by industrious J apanese hands, We must create a disposition against peace and progress, encourage a hazal'dous mode of life sustai ned by also be ready to step in any time the Japanese settlers decide to abandon Mi ndanao for eithel' fanatical hatreds and the instinct for cl'uelty and Ma nchukuo or Mongokuo anq thu s leave \IS the dif- plundcl'. ficult task of saving vast ab(tCa planhltion ~ from Co~versely. the increased ease with which tho:' embrace of the encrOaChin\jungIC, human needs may be satisfied breeds an insti nct for coopemtive and peaceful pursuits, disposes a person â&#x20AC;˘ "UI;RALD" .liard, 13111, t!}$7-Erlil~"'f'i

CoN ~RI!T R ST"NO'PIPR, MSTROPOloITM< \V"TI!R SUPN.Y SYSTRM-VIO"N, lLOCOS SUR PROVINCE

THE COMMERCIAL & INDUSTRIAL MANUAL

148

or a group of persons to acceptable civilization and to deserve through work the benefits of progress.

COTABATO PROVINCE

in the province. It is located 48 kilometers from Cotabato, peopled by 6,960 Christian Filipinos, 2,350 Mohammedans, 16 Chinese and a single Japanese, who are engaged pl'incipally in small farming, the main crops being corn and palay.

COTADATO

NURO

The principal commercial ccntt: r of the province is the town of Combalo, which was formerly, prior to the Spanish conquest, the seat of government of the Sultan Maguindanao, who retired to Dinas in the Province of Zamboanga. The town is located on the eastern side of the Cotabalo River, but owing to scndbars in the river lal'gc beats are forced to anchor outside the river. The population of Cot2.bato is conlposcd of 3,800 Christian Filipinos, 3,500 Mohammedans, 460 Chinese, 28 Japanese and 8 Americans. DULAQAN

This town is located on the eastern bank of the Rio Gmnde, 47.5 kilometers from Cotabato, with a population of 12,200 JI..lor~s, 82 Christian Filipinos, 70 Chinese and 2 Japan<!se\ and is principally a rice producing center. MIDSAYAP

This is a new settlement 6ftablished since 1927, but is regarded as one of the most progressive towns

Located 48 kilometers from Cotabato is Nuro, with a population of 630 Christian Filipinos, 2,850 Mohammedans, 7,220 P agan Tirurays, 4 Americans, 15 Chinese, 5 Japancse, engaged in agriculturalli]1es. PARANG

This is an ancient town called by t he Moros P adang-Padang where rice, corn, copra and cattle plantations a r c located. The harbol' of Parang is one of the best in this region, and the government has erected a wharf hcre. Parang is 29 kilometers from Cotabato in the direction of Lanuo. The population consists of 1,030 Christian Filipinos and 2,600 Moros, and is regarded as a town of considerable future importance. PIKIT This town is the center of the municipal district called Pikit-Pagalungan which was settled by the Moros in 1861. The town is 99.5 kilometers from Cotabato, and is devoted to the production of corn

JOLO WH.~RP-SUt.u PROVINCB

149

PHlLIPPINES and rice, and is on the Cotabato-Davao highway, ,vith a population of 6,500 Christian Filipinos and 4,030 Mohammedans.

SULU PROVINCE JOLO

Jolo is the capital of the Province of Sulu, and is onc of the most historic and picturesque cities of the Philippines. The populations is estimated at 8,668 people, including 3,000 Christian Filipinos, 400 Chinese, 48 Japanese, 11 Americans, 4 Europeans, 5 Malays. There are some fifty concerns operating in this town chiefly in retail lines. MAlMBUNG

This town is 17 kilometers from J olo and is chiefly a fishing village of some 150 families and 15,000 Mohammedans..and 510 Pagan, 6 Christian Filipinos and 20 Chinese. PANG

This town stands on stilts of bamboo and hardwood by the sen, some 23 kilometers from the capita! of the province, southwest of Joll,I, with a population of 1,000 lleople, surrounded by: a distl'ict composing 25,000 Mohammcdans, 40 Christian Filillinos, and 10 Chint:!se, engaged principally in fishing nlHI farming.

TAGLlBl

This village is 14 kilometers from Jolo and is the center of the municipal district of Patikul , consisti ng of 1::. Chinese stores catering to hemp and cop ra shippers. The di str ict produces copra, hemp, rice, and frui ts and when the southern monsoons blow, beginning in May, large quantities of fi sh are caught ncar Taglibi. The district of Patikul has a Mohammedan population of 20,000, with 40 Christian Fililipinos, 25 Pagan Baiaws and] 5 Chinese merchants. ZAMBOANGA

PROVINCE

ZAM80ANGA

The City of Zamboanga is located at the southern extremity of Zamboanga Peninsula and is the capital of the Province. Zamboanga City is the center of government in Mindanao, and also the center of trade with an excellent million-peso T -shaped wharf. The population includes 35,575 Christian Filipinos, 3,229 Mohammedans, 1,700 Pagans, 138 Americans, 1,743 Chinese, 137 Japanese and 63 foreigners of other nationalities. BOLONG

This is a town, center of the municipality of the same name, situated 35 kilometers going southeast

150

THE COMMERCIAL

from the provir.ciai cap ital of Z:lmboanga. Within the confines of this municipality are substantial barrio communities, like Manicahan, CUI'unn and Sangali with an appreciable volume of rural trading. In the region around the barl"io of CUrllnn, there occur several gold mining areas. American capital has been

invested in the enterprise. There are also the cattle ranches of Gonzales and Karagdag. Fishing is an important industry in Sangali and i\1anicahan. A large coconut plantation, owned by an American concern, is found in the sitio of Bucnavista neul' Curuan . The population of Bolong consists of 12,217 Christian Filipinos, 2,910 Moros, 564 pagans and 3 Americans, 87 'chinese and 4 J apan~se . ISABELA DE BASILAN

This town occupics the nOl,thwestern portion of Basilan I sland, I ts JloJlulation in 1935 numbcred 6,200 Christian Filipinos, 5,000 Mohammedans and 167 pagans, togethcr with :3 Americans, 65 Chinese 5 Japanese and 60 othc\, foreign s ubjects, Basilan Island became the first objective of Spanish expedi, tions during the first hal! of the seventeenth celltur~', After th~ subjugatiob of t he Moros who inhabited the lowlands neal' tb.e river mouth at Isnbela, a Spanish mwal base ,,)as established at this

INDUSTRIAL MANUAL place, which subsequently became the center of opel'8tions carried on by the Spaniards against the Sulu pil'8tes. Isabela has a deep well sheltered h~rbol路. Motor launches from Zamboanga maintain dail y service to this place. Inter-island and foreign boats frequently make side trips to this port to pick up loads of logs and lumber a nd sometimes copra. Two rubber plantations are found within the confines of this municipRlity. There are exten sive coconut plantations found in this municipality. A great majority of the standing coconut trees are not as .y et on the full bea l:ing stage, LAMITAN

This district is situated in the northeastern portion of Basilan Island. It is accessible by motor boat after a cruise of two hours from the port of Zamboanga. The district O)ccupies 350 square miles of the most fertile section of Basilan, eminently fitted for the cultivution O)f coconut and corn. It has, besides, several smull valleys, found hel'e and there between areas of rolling tenain, where lowland rice can be cultivated quite intensively. Coco路 nut, however, is its most important crop, production of which is now reaching six million nuts annually. Lamitan will be one of the most important sources

POBl:AClON AT l\{.o.MJlAJAO-o. MUAM I S

P HILI PPINES of the su pply of nu ts and copra in the province of Zamboangu, judged from the fact that only about one-fourth of the standi ng coconut trees in this district hnve so flu' reach<>d the full bea ring stage. The agricultural dcvdopment o[ L:lmit.:m has beeD carried on along R demOCl'utic plan. The lands here are dis tributed in s mall parcels.

DAPITAN

This municipality of 22,500 inhabitants is situated at the northern extl'cmity of the Zamboanga P ~n i n suJa. This was the first town within the province of Zemboa ngn visited by the Adelantado l\'iiguel Lopez de Leguspi in 1565. Dr. Jose RizuJ, greatest

genius, patriot, hero ancl mal路t~' I路 of the Filipino Nation, lived in this town as an exile fol' fOUl' years prior to his execution in 1896, and Dapitan is a town of great historical interest. The present Rizal Park, which was the woods where the hero wrote "My Retreat," is the main tourist attraction of the town. The r elief map of Min anao which Rizal made in the plaza in front of the town church is s till intact. The main crops of Dapita~ are coconut, rice and corn. A little abaca is prod~ced from the hills.

151

The products arc !slipped mostly to Ccbu, with which port Dapitan has direct comme rcial intercourse. The opening of the Zamboanga-Misamis inter-provincial road, will accelerate the economic development. Most of the people who settled in Dapita n. as found by Legaspi in 1565, were the Visayans from Bohol and Cebu. The Christian !)opula tion of Dapitan was given at 20,648 and paJ;an at 1.845. No Moros Jive in this municipality. There are 15 Chinese and 8 other foreigners res iding hel路e. DI POLOG

'l'his town is the center of commerce and trade in the northern region of the province of Zamboanga, It is the assembling point for the products of the municipalities of Katij)unan, Sindaii gan and Dapitan. With Dipolog as the center, the merchandise imported from outside SOUl'ces is distributed over a region inhabited by 85,000 people, Originally, Dipolog was a s mall village standi ng on a beach of fine sand. But today the municipality's population numbers 25,000 and Dipolog has a larger volume of business than mos t other town s in the Philippines of its s ize. I t has numerous big stores, selling a great variety or bnzal' goods.

SALBANO RIVBR BRIDOB-BAT ,\NGA$

152 ---------

THE COMMERCIAL

Dipolog is a non-ent.ry pOI·t of call. Inte r-island boats from l\"lanil a and Cebu call regularly at this IJOrt. The harbor is s hallow and faces an open sea, affol·ding no natural protection to vessels riding at anchor . When the sea is rough, the boats have to stop at Pulaua n, 10 kilometers from tow n, where there is a good wha d. The population of Dipoiog, which number ed 21,819 Chri stian Filipinos and 3,535 pagan Subanos at the end of 193<1 , is IJl·i ncipally eng<lged in fnrming, producing copl·a, ricc and corn. A f ew of the peOI)le are en gaged in fishing, of which industl·Y Dipolog is a center , There are some who m·e cngaged in business, Hnd theil' numbel' is gTowing.

DAVAO PROVI NCE

INDUSTR IAL MANUAL sels . Together with the port of Davao, there a l·e the sub-ports of Talomo and Dalino. Davao has a pop ulation of 27,700, I t has several thriving business districts, besides Duvao proper, such as those of Santa Ana, Talomo, T ori l and Da liao. Ovc)" two hundrcd retail s tores arc operating in this munici· IUl litr. The :\Ileicn~ town site was on the bank of the n(:;u· by Davao River. The presen t town is growing on a modern plan. The busy business t hor oughfares of Davilo arc well paved. The sequencc of progress that hns taken place in thc :;own ;)f Davao has been incr edibly swift. The five-day distance between Davao and Manila by regular steamships has already been reduced to n little over six h OUI'S of actual f1)'ing since the inaurgurution of the air express service.

DAVAO

DAVAO, capital I the province, s nugly nestles in a pietu r esqu2 valley. Fifty kilometers away to the west are seen the tow ring peaks of Mount Apo. The port of Dp.vao is strategicall y situa ted at the head of the big, cblong-sha'Ped Davao Gulf. It is f ronted by the two islands ~ Samnl and Talieud. The waters 2.l"Ounn the port Davao are naturally deep ancl na"igablc by all kinds of commer cial ves-

GUIANGA

This district is the most extensively developed in the province, More than one-half of t he Japanese population, numbering 7,000 are found in this district, where t hey a]'e engaged in farming. Of the 10,900 Filipino population of Gia ng!'., over one-half are native Bag-obo!>. Th e distl"ict of Cuiunga is over 174 squ are kilometers larger than t he province

CoMMERCIAl. STRBBT-B "COI.OD, N EGRO~ OcCI DBNTAI. P RO VIN C!!

153

PHILIPPINES of Cavite. It vccupics the rich territory which Idopes ea stward from Mount Apo. Here t he abaca plantations arc pushing the forests to higher elevations in the Apo mountain range. So well developed is Guiangn that the revenue collections in t his district, exclusive of insular aids, arc now ncaring 1'160,000 a nnuall:y. TUGBOK, about 17 kilometers from the capita! of Davao, is the seat of the local government in this district, but the principal centers of commerce arc Minta1 and Cnlinan. Mintal is a Japanese-style village, 14 kilometers away from the capital of Davao. Here are fou nd a Japanese hospital, a Japanese school and a golf course. The village is beautiful sct out near the bank of a thinly fl owing riveL' t ha t rages in angry torrents after a night of good rain in Upper Guianga, Cali nan, 30 kilometer s from Davno, is a largC!r vil)age than Mintal, and tho most important business contei' in this district. SANTA CRUZ The town of Santa Cruz is situated on the gulf coast, 41 kilometers from Da ao going westward, The north, looms up Mount Apo, providing the town of Santa Cruz with a picturesquE!,. background, The ag riculturc development in Santa Cruz is being extended upward on the Apo mountain slopes, T he municipality of Santa Cruz occupies a land territory of 132,000 hectares and it has a population of 25,800 nne-half of which are non-Christians,

SANTA CRUZ IS the gateway to one of t he Ilchcst regions in SOllthern Mindanao, The great area that slopes westward and southwestward from the Apo mountain range are still undeveloped lands, f(ll'ming a rich territory. Santa Cruz opens the way to Uppel' Digos, P adada and the rich area uround :\blalag Bay. The barrio of Digos, which is situated 20 ki lometers away from Santa Cruz, at which point the Davao-Cotabato road under construct ion starts to wind toward the latter province, has good ]>1'OS pects for the futUre. MATI

Steamers from Manila call twice mont hly at the port in Pujada Bay known as Mati, The present Mati was founded in 186<1 , and was made the capital. Mati is a hemp and copra producing municip3lity of Davao Province, The production of copra in Mati nmounts to 300 tons und that of hcmp to 1,000 piculs monthly, The recent purchase by the Furulmwa Pla ntation Company of a large tract of land at

Stai-Tanuguna, situated within this municipality, should accelerate the econom ic development of Mati. The population of i\lati consists of 10,500 Christians and 3,000 pagan i\hmdayas and Mohammedans, The Mati Mohammedans are classified into t wo groups, namely, Islams and Moros. The !slams a r e t he native Mohammedans, wh!le the Moros are the :'oIohammcdan settlers, or just transient seafarer s, who came from Cotabato, Zamboanga or Sulu,

THE / oJ.A?>iD 0 1" (' EBl; CEBU, the capital of the Island of Cebu, was the landing place of Magellan, who discovered the Island in 1521. In 1565, undel' Miguel Lopez de Legaspi, Cehu becRllle the first Spanish settlement. Since the begi nning of the Spanish contr ol, Cebu has been both 11 com mcrcial and educational center for stu dent.<:; of the immediate locality, as well as for those of the neighbol'inj! provinces, with its aristocratic cduclltionnl centers and Spanish colleges which include the famous Semina rio de San Carlos and the Colep;io de la Imuaculada Concepcion. Cehu contuins many points of historical in te l'est including the ancient San Agustin church containing the treasured image in the Islands, known as "Santo Nino de Cebu," 01' the " Holy Child of Cebu," JI,'Iany theories have been advanced about this image, Authorities say Magellan presented it to the wif(' of a CebuRn chief upon her conversion to Christianity, in 1521, and then it was recovered about forty years later after the landing of Legaspi. Others say it was found hy a Bal>que soldier on the sho res of Cehu Isla!ld, in 1565, An authentic story about the l'c('overy of thil> image was related by an Agu stinian (I'Jar in a prayer book foJ' the " Holy Child," It is said thab wben L :3!gaspi la ndecl at Ccbu, the natives, fo\' f('al' that the Spl\l'.iards mig:h t aveng(' the der,th of l\Ia:!ellan, blU'!lCd their houses and fled to the mountains. A soldiel' hy the- nallle of Juan Camus, while patrolJinj!' abont t he burned area, saw with wonder , a small n:pa house spared by the :'Iu'nes, H '" entered the house li nd on the floor he saw a he-autiful woodf'n box bound with a strong I'ope. UPOIl openin!!: th i<:; hox hf' saw in it another hox in wnich the illlu!!'e of the " Holy Child" was ca !'efull y placed, In 1601, thirty-six years after the discovery of the image, the present St. Augustin church was built. Dllring the c<:!lebrutioll of its fiesta thousands of pile:l'ims from distant towns and provinces come th ronging to Cebu to pay their homage to the image of the- " Hol~' Child"

154

THE COMMERCIAL & INDUSTRIAL MANUAL

A lal'ge ho!low CI'OSS standing in the center of the main plaza of Gcbu, protects anothel' smaUcl' cross which is called the "CI'OSS of Magellan." It was placed there when l\Iagellnn and his follo wers celcbl'nlcd theil' first mass on GchulIl\ tel'l'itol'Y. The old "Fo}'t San Pedro" is a fine example of Spanish architecture and was the site of l'rlageJian's fortifications.

Colon Street, or "Parian," is the oldest street in the Philippines. On one side of this street, for a shori distAnce, the sidewalk is covered with an ancient Spanish red tile roof sUPPol'tcd by natur.d logs which have become petrified by age and the clc1l1(mts. 011 a certain spot

011

the ShOl'CS of Madan

Island, which is separated from Ccou by a narrow strait, stands Magellan's illonument. This marks the place wherc Magellan fell in battle with the ]'1a('tan Chief name\ Lapulapu: The beach at Liloan, or the "Palm \Beach," l!; very popular at certain sea:;ons. i\Iany\ Europeans and America~s livi ng in Cebu spend rl1!Jight,{ul weekends at thiS bathing resort, in the ~Ilall coUal!cs they have buill there for that p\lI"])O One of the loveliest drives near Cebu is the 41'ive inland ove l- the mo\wtain :; to Tolerlo. The cr"ive on n01,th road to

Consolacion and Bogo is colorful. The Eversley Child Leprosarium at. Consolacion and the Medellin Sugar Central at Bogo are of particular intel'est. Cur car, about thirty-nine kilometers south from Ccbn, is the most beautiful und progl'essive town ill the province, with the exception of the city of Cebu, Its plnzn and church nre good models for those who al'e intcl'este(i in art, On the other side of the Plaza a swimming pool is situated, On one side of this public bath, is the imagc of Virgin Lourdes. St, Catherinc Coliege, which is dirccted by Belgian :;istcl's, is located on the top of the hill neal' the church, A few kilometcrs west of Cal'car lies Mainit, a bal'l'io of Carc.H, noted for its sulphuric hot springs, The drive from Ca rcar to Barili is picturcsque as there are numel'OUS zig-zag roads. From DUlllnnjug a beautiful view of Negros, l'Inother island, can be seen with its towering "KanIa-on" volcano painted on a blue sky, The province of Cebu has many good roads. The road from Dumanjug runs along the western coast of the Islands; it winds eastward on the southern end and cxtends along the enstern coast, passing through Oslob, Dalaguete, A I'gao and Sibonga, and ba ck to Cal'CUl',

PHILIPPlN ES

1LOII.O ILOILO is olle of the pl'in~ipal ports in the Southern Tslands and as a shipping center, ranks second to Manila. It is situated on the southeast coast of the Island of Panay, just at the mouth of the Iloilo rivel', cOllsistin~ of Iloilo proper and its suburbs Molo and lHanduriao, is estimated to cover 14.25 squa re Idlometers. IHost of the inhabitants are literates; a J!ood number of them having at least a highschool education. The most important local products of Iloilo arc: si nnmny cloth, patadiongs, buri hats, snwali mats, potteries, shellcrafts, cutleries and cigars. The suburb, iHall'duriao, is devoted to the weaving indutltry. Weaving was taught to t he natives by a Spanish priest, about the year 1595, a nd now, neady every home has its loom. Acconling to tradition, the first Malay settl ers of Iloilo came from Borneo. The Bornean immigrants found the place inhabited by Negritos, living under the rule of a brave chief, by the name of Marikudo. F I'om this chief the Bomean immigrants bought the entire Is~and of P anay for one gold necklace and one "sadok" of gold. The or igin of the name Iloilo is very interesting. The Negritos called it lI-ong-irong, which means "like a nose," because the southwest coast of Panay Island is

TWoIPOIIIIIIY WOODIlN BIIIDGB ON TUB

155

shaped like a nose and chin. Later 011, when the Malays settled in the place they changed its name to Dong-Hong, for the simple reason that the Malays can pronounce the letter "L" better than they can t he letter "R". And still later, when the Spaniards came to the place, they changed the name to Iloilo, to suit the convenience of the Spanish tongue. The Spaniards settled in Iloilo ;\s eady as the time of Legaspi and Iloilo became the capital of the province in 1688, and opened to the commerce of the wodel in 1855. On April 11, 1901, civil government undel路 the American flag was esta.blishcd in the PI路ovinee of Iloilo , the Americans having adopted that namc. The nea rb y towns of JUI路O and l\fiagao contain points of historica l interest to the visitor. At Jaro, the Bishop's Palace, the Cathedral and the oldest watch-towel路 on this Island are particularly noteworthy. At Miagao one finds an old Spanish church in good preservation. A drive to Oton is recommended because of the beautiful beach ~nd tropical scenery. In Capiz, which is three or four hours from Iloi lo, one of the most impressive churches ip the Phili l>pine Islands is to be found. The silveIJ carvin!;" in this church is particularly beautiful.

SOIlSOGo~'-ALBII\'

INTBRPROVINCIAL ROIlD-SOR'OOON PR.OVINCE

AG RI C UL T U R E Merchant and Farmer Linked Together- Economics An Indispensable Ally of Agri cu lture' CONOl\HC PHOHLEMS a s they nre und col"stood today under the present conditions were never a part of the conside l'ation of agricultural ventures in the pioneer days. Land was abundant, people were few. There was little trade and the problem of the individual was centered on food and how to grow it. The farmer during the early days took to the forest and cleared the virgin lanel, cultivated it to have a place to live in and to raise enough food. H e wa s not bothered with market, nor tar i ff, nor limitation. He bar tered his excess pro(Iuds with his neig h ors to supply his necessities, wl,ich were simple and few, but as communities grew a nd the population iflcreased, with the concomitallt augmentation of h:.lman wants and commodities, ~co n o m i c problems apPâ&#x201A;Ź\d,

THE BEG I NNINGS of Philippine agriculture hnd been a pioneering work of this kind, Conditions were favorable particularly a\ong the coasts and the blinks of rivers, where he pian\(!d corn 01' rice, hunted game, or fished, He raised a few animals to PI'Ovide part of his food and planted coconut, abaca, and fl"tlit trees for his pel manent c,"ops, The well-to-do land owners began buying adjacent parcels and la l'gcr units of holdings were developed, and so o!xtensive coconut and abaca indu stries of the pre:'lent t ime were created, and the rice-growing regions developed, Small units were loaned undor Royal Land GI'ants to indi viduals who cleared the virgin lols and brought the land undc!l' cultiVation, and rents were not exacted from the users until the IHnd ha d been fully cleared and cultivated, It is o nl ~' within the la st decade and a half that agricullund development has been undertaken a s a p:.!!"E'ly commer cial enterpri se , Today these indus tries and the impl'o vement on land represent a tremendous investmer.t which could never have been built if actua l ca sh had been required for their development. They r epresent an accumuiated labor income of sev<'> l'a l generations, Although pioneering methods still prevail agriculture is already facing economic pro~ blem s of such magnitude and extent that now any agl"icultul'al venture is no longer just a mere problem

of seeds, soil, clImate, pests, diseases, and typhoons, but principally of economics. It was the moneyed Filipinos who were first to feel discontent against the social order during thE" Spanish domination, DUring the Spanish time "colleges and universities were founded in Manila which principally gave courses In grammatical, philosophical, theological and juridical studies," the result of which was the strengthening of a wrong mental attitude toward manual labor, holding it in contempt. In the College of Agriculture courses were started in 1918 principally to teach elementary principles of economics and farm ~ ccounting. No facilities bave been given or developed for conducting research and survey in agricultural economics in the same manner that laboratories and field stations are provided at present for the studies of chemistry, agronomy, horlicullul'e, and animal husbandry. The University of the Philippines started giving courses on economic subjects in 1910 in the Colleg2 of Liberal Arts, and with the establishment of the School of Business Administration in 1929, permanently gave due l'ecognition to t he economic aspect of national life, The establishment of vocational schools began with the American regime when demand for skillful artisans in different enter prises began to be felt. Vice Governor-General Gilmore, Secr etary of Public Instruction pioneered "to change the emphasis in education from non1;6

IS7

PHrLIPPINES productive academic training to vocational training in order that those who are educa~ed at the ex~ pense of the Government may be economically efficient." The Philippine Legislature in 1927 gave specific recognition to vocational training and provided funds for the promotion of agricultural and vocational schools. The economic interest of the government and the measures established to promote economic development partook of the characteristic of the people of the government of the governing power. The Spanish regime in the Philippines and the present American domination had widely divergent policies and methods of economic devcloprnent. History tells us that during the Spanish time the social order and laws were inimical to the proper development of economic independence of the individual native. The education given in schools and the !>ocial institutions established developed a wr ong attitude towards manual labor. Under the Amc,ican regime, however, greater emphasis has been IlJ"id on economic development and the Filipinos, alert to thc advantages of the more liberal governmen t, acquired a great degree of economic development and consequently came

C~"~II~O MANOO-DASMA"I~A~,

CAV'TII. AT TIIB H AC IB NDA

OF DBAN BBNITBZ

to enjoy the advantages of acquired wealth. The Bureau of Agriculture in 1915 started a Rural Credit Section under the Demonstration and Extension Division for the endorsement of the rural credit law, Act No, 2508, passed by the Philippine Legislature in 1915. In 1919, this Section was organized into the Rural C redit Division with activities as follows: 1.

Org''''i&;nli[. bupen Âˇil!;nl':. nnd C'l<Imin;Dg rur" asao,iMion â&#x20AC;˘. Helping fnrmtNl to obtnitl 10llM Iroa. blink.. 3. FightiD; II!",),. ~, Propngll"dll work on cooperutive IIct;vities

t rcdi~

The Division later included in its activity the enforcement of Aet 2818, passed March 4, 1919, entitled the Rice and Corn Fund, designed to enable the farmers to extend areas planted to rice and corn, to buy work animals, implements, seeds, and to meet all other necessary expenses in producing these two staple crops. This Division in 1930 was named Rural Economics Division and later in 1931 labelled Agricultul'al Economics Division but remained fundamentally the same in the function of supervising rural cl'edit cooperative associations and administering the Rice and Corn Fund. In 1932, this Division under the Bureau of Plant Industry

POMBlO (ACTAS VUIRTy)-SA N PAMPANOA

FRRNANDO

IS8

THE COMMERCIAL

wns tl'llllsfelTcd to the Bureau of Commerce. The Bureau of Plant I ndustl'Y R!l ol'gnnized at the prelicnt time has no section of AgriC\dtUl'al Economics, yet the greatest pl'ohlem of ag:;'icultul'c today is whether it can prosper under the prevailing conditions affecting cost of production, tuxation, present market prices, current J'ates of interest, present rural unJ'est, international relations, in ('thcr word:;, undel' the present 1)I'CSSUI'(, of ecoromic conditions. There is no govcl'nment institution which CRITics on well organized research activities on the economic factOl'S which detennine the present economic conditions of agTiculture ex('cpt the College of Agriculture and other Colleges of the U niversity of the Philippines, which undertake this worl, as part of the cUlTiculn. We are indeb~d to thc late Trinidad Pal'do de Tavera for the vel':( i1lulllillalin~ analysis of the results of ec::onomic d~velopment UPOIl the Filipino people during the Spanish soverei gnty. How a misguided education produced a wrong attitude toward mallual labor, ~md how such a delusion l'etarded the Fitipino individually and as a rmtion in acquir. in" economic:: independence should serve as a lesson.

INDUSTRIAL MANUAL Under the American regime we have become morC' enlightened towards the dignity of productive work. We have learned to appreciate the success of a man who has added wealth to the nation's stock, Spurred by the new attitude we have produced successful Filipino bankers, manufactuJ'(!l'S, bU!:iiness men, financiers, and insurance execlltives, who furnish strong aSSU1'ance of the ability of the Filipinos to face the economic problems of the new order with the advent of an independent Filipino government_ So completely have our economic ideas changed; so t horoughly has our obsolete attitude toward labor been overhauled; so firmly has our conviction been establi shed of the need of economic independence during the last decade that leaders of thou~ht and i\ction from the President to the chiefs of offices, from university presidents to school teachers, fl'om city editors to feature writers, hold the economic development of the country to be the keynote of thought, planning, and action. The Philippine Eco, nomic Association organized in 1933, and the National Research Council in 1934, will be the great fadol's in directing our national economic thought, The y nitcd States and the rest of the world watch-

Snt"M CoPII" DIlVIlIl DesiGNED "NO )1.,,011 BV TIIII BUIIII"U Of AGIUCUt.TUIIB

PHILIPPINES with critical eyes OU l' abili ty to carryon an independent c;cistence not by the religious fervor of our people, not by t he diplomacy of OUI' politieians, not by literary production, not by the intensity of sentimental feeling, bu t by ou r ability and statcs-

159

manship of hig h ol'(icl' to promote a symmetrical economic structure which wiJI make

the

t.asks

t he

world's

OUI'

people equal

intense

economic

struggle.

PHILIPPINE FOOD SUPPLY THE CONS PI CUOUS PROGRESS in education in acqu iring wealth and in standards of living which huve been enjoyed in the Philippines has not reached t he farmel's who SUp ]}]r the food, but has been confined among t he merchants, the finaneiel's und ~hc l)roduccl's of eXJlort ero])s, such as SUi!,'ar and copra, RICE

Rice consLitutes the pl'incipai sta])le f cod of the Philipl)i n e~, Corn ranks second; camole, camoteng kahoy and other l'oot crops following, Wheat is also an imllortAn source of f ood, but very little of it is ~Town and can be grown in the Philippines so that furthel' usc of it lllUst depend upon importation, Practically, all the people of the Philippine Islands cat rice, even those who are eating corn, but due to the fact that corll is more easily Pl'ot!uced than rice, it is the sta l)ie food among the pe<lple of Ccbu, Bohol, Isabcla, Oriental Negros, and a large portion of Northerll i\findanao, Camotc and other root crops become the staple food only in time of emergency when, due to failure of crops, rice and COl'll a l'e not aVAilable, Among the Qthel' crops thab arc grown find ma~' be depended upon to supply part of the needs for staple food should emergency ari se are the following : gabe, ut i, tugui, and the starch f l'Olll bUl'i Jllllm, Fish is also a source of the g)'eat bulk of P hilippine food, Because of the almost endless seacoasts, the sea constitutes un inexhaustible source of an abundant supply of cheap food that helps maintain a nutritio~s diet for the people. Fish cultUre is a very ex tensi ve industry now all over the Philippines and a great deal of the regular supply of fish for t he big cities like Manila comes from t he commercialized fish ponds, The. area at present cul tivated undel' rice amou nting to appro;.:imateiy close to 2 million hectllres represen't 4f1 ~{ of the urea planted to leading crops, Other crops fire as follows: c01"n-15 % coconut-15';, flbaca_ 12 r/~, sugal' ca ne-7 pel' cent, tObllcc0-2';, and maguey- l ';~, Rice i!'; grown in

ever y province of t he Philippines, but principally in Nueva Eeija, Pangasinan, Iloilo, Tal"iac, Bu}acan, Pampanga, Capiz, l locos Norte, Lanao, La Union, Cngayan, Camarines SUI', Rizal, in the or der of their importancc, Each of the above mentioned provinces produces annually not less than a million cavanes of palay, It may be mentioned t hat there are public lands which promise to be great potential areas COL' rice production and which can easily be made rice producing areas should necessity demand, such as those in Agllsan, Cotabato, Davao, Occidental Misa mis and SUI'igao, With these reserves of land resources located in regions free fl'om typhoons ami drought, a steady and adequate supply of food produced within the confines of our Commonwealth in the f uture is a ssu red, provided that the country adopts and follows a national policy of land use, Sinc,e 1920, the sudden and ver~' wild fluctuationli in annual production of palay, characteristics of prodUction during ~'ears previous to 1920, have been very li ttle experienced, Previous to the establishment of irrigation systems, both private and government owned, the success of rice crop was entirely dependen't upon rains, Becausc of the vagari es of weathel', production was uncertain, The failures of crOllS of ]{:12 and 1915 are significant examples. Each of th ese years of slump production had been followed by g reat hardship among the people, T he 1935-1936 l'iee shortage was a result of a series of force maj eur e, na mely, drought, storms, flood s, insect pest.'> and diseases, which lowered the 1935 production, but this is a very exceptional casc, With the r eturn of sugal' lands to rice culture due to the Sugar Limitation Act, with the increase in rice lands due to nc-wly opened areas in Northern Luzon as well as in Mindanao with the increased nl.tes of production in t he rice producing areas due to the u se of better varieties, the prRctice of better culture, effective con trol of pests and diseases r esulting from the spr ead of information and the adjustment of the fa rmi ni!,' calendar of operations to

THE COMMERCIA L

160

avoid the ravages of storms, the food supply for the Philippine Commonwealth is assured, With a decided program of giving due government attention to the needs of industry. and of providing facilities for orderly distribution of the c rop, the industry of supplyi ng food, namely, the production of rice, will not be behind other agricultural industries of the countt'Y. The rate of production per hectare increased from an average of 15 cavnncs in 1910 to an average of 28 in 1930. This average is far too low. The nnnual need of lhe Philippines bnsed on the past ten yea r s' consumption of native g l'own and imported rice is approximately fifty million cavanes of palay. Accordingly, if the average production can be increa sed to t hirty ca vanes pCI' hecta rc it will enable the present rice lands consisting of approximately 2 million hecta res, without putting additional public l a ~ s into rice culture, to produce approximately 60 million cavan es of Imlay, an amount adequate to suppl y the a.nnual needs of t he country ... . O,'er

half a

CORN million hectares are annually

INDUSTRIAL MANUAL cultiva.ted to the productions of corn. Corn con_ stitutes the staple food of a large portion of the population of Cebu, Bohol, Isnbela, Oriental Negros, Western L eyte, and Northern Mindanao. If an effective channel of di stribu tion could be established and cheaper transportation is available, corn production in Mindanao will constitute a sure supply of cheap food for other parts of the Philippines. CAMOTE Camote (sweet potato) is not listed a s a leading crop, but it is one of the most important C ("OPS for the farmers' welfare, Al t hough not grown for commercial purposes it is invariably grown on every fa rm to supply the fU!'lllcrs' need, The camote tubers arc the principal product, but the tender shoot is perhaps t he most widely used green vegetable in the Philippines. It supplies the gl'een vegetable that e nriches the diet of the farmers' fam ily. Camote is t he safety valve for the people. In times when the supply of rice and corn is short, camote furnishes the staple t hat keeps the population from starvation.

DUIUT OIlANoe CITRUS M AXI~lA-HoRT I CVLT URAJ. ST ATION. LI~IA'I', B '.T ...... N

PHILIPPINES CAMOTENG KAHOY

Allhough fam ili ar to farmel's ns the camote, camotcng kahoy, source of cassava flour, tapioca stat'eh and other products, has not been considered importn.nt. unti l l'ccently when the Bureau of Plant lndustry undertook studies to improve the prod. uction and to develop the manufacture of starch and flour from t he cassava roots. Up to 1933 less than twenty thousand hedares have been cultivated to eamotcng kahoy annually. At present there are about fifty thousand heclnres under cultivation. There arc many unfilled requests for planting matel'ill ls in the Bureau of Plant Industr y. The interest to grow camoteng kahoy is so widespread that ill no time the area cultivated to this crop will reach over 100,000 hectares. The universal r eRponse of farmel's to the campaign of the Bureau of Plant Industry to increase the production oC this crop is gl路atifying. The interest is due to the fact that the product can be easily commercialized. In connection with camoteng ka hoy, mention should be made oC wheat. The Philippine impor tation of wheat flour fl'om 1 89~ to 1935 rcpresents a tremendous drain of money "cry year with the

COCONUT

161

trend oC importation on the increase, so that during the last five years t he re has been an im portation of a pproximately seventy million kilograms of wheat flolll' annually. Now, the pertinent question may be :t~ked : I s it possible to diminish the bulk of this impor ta tion? Two possibilities may be cited, namely, hy employing an indirect and a dircct method of attacking the problem. The indirect method is to increase the hectarage to he planted to cassava for flour manufacture which is capable of immediate expansion considering the availability of land and sui tability of soil and climatic factors. The direct method is to grow wheat in this country. It has been proven by experimentation covering a number of t rial s t ha t wheat couid be Sllccessfully grown in the Cagayan Valley and in the highlands of Batangas and Cavit2. The usefulness of cassava or c8moteng kahoy is almost proverbial. It call be gt'own anywhere in the Phil ippines. It can be grown in the home lot and in the field on commercial sca le. It can be used to substitute rice or corn in case of emergency. It can be made into starch and utilized later in many industrial purposes. It can be made into

GROvl!-M ...GO... LBS .... L...Gus...

THE COMMERCIAL

162

gapiek and exported to foreign countries. It can be m~de into flour and us<!d with wheat flour for baking purposes. In this last use t.here is g!'cat possibility. Since 1930, the Philippines has been importing wheat flour as follows: 19)0 .. 19}1 •• 1911 1911 .. 19\• .• 19n

. .. 1'8.9Sl.)29 6.119.2J9 ~.9 ~1.S;8

~.~)S.091 ~.lH.l!18 ~.711.1S~

It has been found by experiments conducted in t he

Bureau of Plant Industry that the use of cassava flour to thc cxtent of 25 % for bread making with wheat flour is possible. This, thereiN'e, brings easily a saving of 25 '"" in the annual importation of wheat rc}wcsenting a million-peso industry for the Filipino farmers. As a matter of fact there are countries which have compulsory laws, requiring the usc of not less than 20"10 cassava flou!' to be mixed with whea ~lour for bread making. VEGETABLES

Importations of veg\ tables amoun~s to around two million pesos annually. This represents the consumption of city dweIIe't as rural folk usc locally grown vegetables. Tho. bulk of this importation could be l'Ui sed in the ~hiIippines, as the I slands are actually producing practically all of these importcd commodities but on a very small scale. Recent trials proved that onions could easily be raised to thc tune of around 14,000,000 kilos, principally to cover importation from Japan, Ch,na and Egypt. Up to 1936, the annual production of onions due to the recently establi shcd Ollion growing industry is onc million kilos. Gal'lic could be raised without difficulty and it would require only about '100 hectares to produce locally the amount of importation. Thcre is also a large importation of Irish potat oes . The MOUlltain Province, Nueva Vizcaya, Oriental Negros, the highlands of Cavite, and Lanno and c.ther places having an altitude of about 2,000 feet above sea level would I~TOW profitably this crop to supply the local demand. The annual importation is wort.h around half a million pesos. Many places of C",ntJ.·al LtlzOll' could be easily grown to peas and beans. Both cabbages and tomatoes could be grown to produce maximum yields after the closE' of the rainy season. Therc are favonl.blc regions fOI" the I!rowing of these vegetables in I\-lindanao. the Mariquina Valley and the littoral lands along Laguna Bay, the Candaba swamps of Pampanga, the highlands of Cavite, Nuevn Vizcnya, Negros

INDUSTRIAL MANUAL Oriental and Occident{ll and the Mountain Province which could be farmed to cover the bulk of vegetable imports. TREND OF CONSUMPT19N

According to available statistics, the populat;on of the Philippines is increasing constantly and consistently. According to the 1903 Census the popu:ation of the Phili ppine Islands was 7,721,270. The 1918 Census placed the population at 10,314,310. The most recent estimates place the popula_ tion of the Philippine Islands at about 13 millions. The trend of consumption of food supply is directly proportional with the increase or population . Basing the consumption from imported rice and local 11I'oduction t.he IltllOunt of consul\ll)tion in the Ph il ippines with the present population may be placed at approximately 22% million cavanes of clean r ice, or in terms of palay, approximately 45 million o.:avunes. Besides rice, corll which is produced in great quantities in Northel'n Mindanao, Cebu, Leyte, in most parts of the Visayas, as well as in Northern Luzon will be consumed in greatel' quantities with the increase of population and when the people I'eali~e its relatively cxcellent food value. During recent years there is a lso a marked increase in the consumption of wheal f lour due mainly to the increasing ratio of bread which enters into the breakfa st food of wealthier people as well as the wo!'king class in the large cities like Manila, Cebu, iloilo and other towns whcre the facilities of bakery are. quite developed. ADULT I NSTRUCT ION IN FAR~IING

Vel'Y few Philippine farmers have technical and scientific t.raining in agl·iculture. Most of them cling to haphazard methods of farming. There is, thel'efore, a great neces:sity of adult instruction in t.his field, to obtain the following object: (1) To give the adult farmers systematic instruction in the general and fundamental principles of agriculture; (2) To help them solve their problems on the farm j (3) To promote impr oved and scientific methods of farmi ng. The kinds of crops and types of farming prevalent in a given community include annual and permanent crops, such as r ice, sugar cane and tobacco as annuals, abaca, coconut, coffee, cacao, etc. as permanent field crops. There are two types of farming accor ding to diversity, namely, diversified and specialized farming. For instance, t he Cagayan Valley raises tobacco; Negros, sugar cane; t he

PHILIPpINES Bical Region, abaca; the Ilacos Region, maguey. Taking the country ns a whole there is a diversified type of farming as compared, say with Cuba . In certain rice localities where only one crop is raised a year on account of the limitin'! factors of production . the farmers have little work to do aftel'

163

the harvesting season. In the sugar cane localities, the furmers do not have much work to do aiter the milling season. In the abaca and coconut pinnta. tions, the farmers simply wait fOl' their crops to bear produce. Cash crops 01' intercrops may be planted for the time being.

CREDIT FACILITIES INADEQUATE TO MEET NEEDS OF FARMERS' NDER THE PRESENT economic system there is no other human instilution that can surpass the influcnt!o of capital on a country's eco1omic and indl...strial development and progress, This is especially t ruc in the case of our growing country. rich in natural resources, strategically situated on the crossroad of Asia~ic commel'ce. enjoying the blessings of a mild tropical climate f~\'orable to the growth and cul t i ation of all kind.; of commercial vegetation, There is un~ubtedlY, a dearth of capital in the Philippines. but far more evident and acute than this is the lack 0\ adequate credit facilities to ameliorate this unfavorable situation,

CREDIT is the most efficient and economical substitute for money and capita\. Us most important iunction is to facilitate domestic and foreign COlllmercial and financial exchange and to promote effe('tivel~' the expioitat.icltl and development of the countl'Y's natlll'al r e!'lources, thereby accelerating the production of wealth and raising living st:lndard, Credit, thel'cfol'e, mu st bc systemized to make it more effectivc, elnstic, and better adollted to present conditions so as to be (l'uit.rul only of dcsimble results, Such a credit );.ystem should be well balanced and all .embracing to minister to the legitimate credit needs of all strata of society, OREDIT NEEDS O~, Tm: FAUMERS Generally speaki ng, there are th r ee kinds of agricultural needs which, for lack of better terms, nrc designated as "short-term c)'edit," "intcrmediate credit" and " Iong-tcrm credit," The first is extended to farme r s for thc PU)'POSC of f;lcilitating the production and marketinp; of fnrm products, which l'un from six months to one )'car. The second *8}1 ~I, v, Br.RSo\IIDO, I'n , D" ,1.. ,路1I"~1 I'ro!tuor 0/ 8011 /:;"'1 and P,noMC' , U";<ffljlu (1/ M~ I'~ili"pin r~,

is granted to e.ffect semi-permanent investments which run from one year to five years, a period too long for commcrcial and too short for investment banking; while the third, for financin g permanent improvement and purchase o{ land, machinery, and the like, All these and other allied iillancing activities are necessary in all sound and profitable fa rlll nlllllugement, The farmer is lik ~ uny other business man, and und!!)' the present condition, is in a more precarious position than either the merchant, the industrialist, 01' t he banker. The vCl'y nature of his calling nccessitates an entirely different cconom:c orienl.'l.tion. He often needs credit to tide over emergencies, bad seasons, sudden Ill'ice slumps, and various crises, Indeed, no other member of OUI' econolnie society is mo)'e subjectcd to the unccl'(.ninty of natu)'e than the farme r, This fact shows that no cl'edit system <'ould ignore the credit needs of the farmer, which are the most productivc of all forms of credit, for t hey further the production of prime nccessities of life which, at thc same time, provide for a solid foundation of thriving commerce and trnde-a neCC);.l;;I1'Y cOlHlition for 1'. llIore prosperous b:Ulking

164

THE COMMERCIAL & INDUSTRIAL MANUAL

lind credit business and for a happier, more contented people. OUR SYSTEM OF ACR I CULTURAL FINANCING

Since the inception of the American Administl'ation in the Philippines, the need for an effective and economical system of agricult.ul'al financing was felt by the responsible Government officials. NUlllerous acts were, therefore, passed to deal with the wide ~nd val'ied credit lind marketing needs of the farmers. Thus we have at present the Agri. cultural Credit Cooperative Association, otherwise known as Rural Credit, the Rice and Corn Fund, the Cooperative Marketing Associations, Bonded 'Varehou scs, banks and private firlTIS and individuals as important clements compl'ising our system of agl'ieultural financing, The main purpose of th,e Agricultural Credit Cooperative Association is to create a system of )'ural credit to encorn'age and foster the accumulation of funds by means of cooperation "in order to cxtend to its members redit on reasonable terms for exclusively agricultu 'al operations; and to encourage thrift, activity I\f\d punctuality ill meeting obligations among the mem)Jers," The purpose of

the Rice and Corn Fund is to promote and encourage the production and marketing of rice and corn, This Fund gives material help to the Rural Credit Associations for, under its rules and regulations, only said Rural Credit Associations are eligible to bon'ow from this Fund, The Cooperative M:u'keting Association aims to promote, to foster and to encoUl'age thc intelligent and orderly mal'keting of agl'icultural products in the most foreign and domestic importers and exporters. The significance of bank credit cannot, therefore, be ignored especially when one considers the fact that the Philippines, because of its peculiar gcographical, political and economic circumstances, are necessarily engrossed in foreign commerce. LOCAL CREDIT FACILITIES

GENF.,tAL

To have a thorough understanding of the credit fac ilities in any country is to know, first of all, the existing credit and financial institutions actually engaged in g l'nnting credit and loans to all classes of the borrowing public, 'I'hese institutions are the components and, under ordinary ci r cumstances, constitute the important elements in

MAIZE P IIO~IIRLY CULTIVATBD-AR()"o. CB8V

PHILIPPINES the local money market. They are the vcr y factors that influence the flow of loa nable funds from onc place t.o another, the factors responsible for the casing or tightening of credit, the factors innuencing the flow of lonnable funds from one chan路 nel of investment to another and, consequently, the ones directing the exploitation and development of our nat ural resources, guiding the course of our country's financial and credit policy and inffuencin!!" to a g rcater extent, OUI' ('(ltmtr~"s destiny.

165

Among the impor tant local institu tions and firms dedicated to the business of granting credit and other financial helps may be mentioned the following: (1) banks and trust companies; (2) building and loan associations; (3) insurance companies, such as fire, accident, marine, life, etc.; (4) miscellaneous cI'edit-granting institutions, such as rural banks, postal savings banks, pension boards, stock exchan~e brokers, etc., granting credit to farmers a nd other customers; and (6) loan sharks.

COMMERCE HON. QUINTIN PAREDES ADVOCATES FREE TRADE Sugar Industry is Backbone of Philippine Econom ic Life HE ESTABIiTSHMENT of free trade between the Philippines gave the former country monopoly of the Philippine market and paved t he way for the latter country to develop educa-

tionally, politically, and economically. Discontinuance of free trade would mean to the Filipinos chnos an.d poverty and to the Americans the loss of the best market in the Far East fol' numel'ous product.s, principally steelmiU products, iron and steel advanced manufactures, ('otton cloths. galvanized steel sheets, dai ry products, cigarettes, and truck and bus tire cas-

ings. That the mutually a dva ntageous economic re'ationship between the two countries could be main wined without impai ring the interests of either pea} le is the thesis of the Hon. Quil:'tin P aredes, Resiuent Commissioner of the Philip~ine Islands to th ~ United States, discussi ng the S\lgar industry, which is the backbone of the economic li~e of the Filipinos, His discussion in the United States Congress follows: THE SUGAR INDUSTRY in the Philippine Islands dates back many cen turies prior to t~e American occupation in 1898. Historical records show that the native Filipinos were already producing sugar cuna when Magellan discovered the Islands in 1521. E XllOl'ts of suga r f!'Om the Philip pines increased from 63,000 ShOl路t tons in 1855 to more than 200,000 short tons 25 years later. The highest export peak dllring the Spanish regime was reached in 1895, whcm the Philippines exported 376,401 !':hol't tons of Sligar. As a matter o f fact, the sugar industry was developed on a competitive level du ring the Spanish regime and Philippine sugar then was able to compete in the world's mar'kets. It is interesting a nd significant t (l note that lor the lO-year period from 1880 to 1889 before the enforcement of the restrictive Spanish commel'cial laws in the Philippines, of the 200,000 short tons of SUgal' exported annually, more than 50 per cent found its way into the United States. As a r esul t. however, of the restl'ictive Span ish commercial laws,

the su gar exports from the Philippines to the United States, following the year 1890 decreased to 33 per cent. FREE TRADE REVIVES I NDUSTRY

The six years of revolution which started in l896, fil;st, the revol t against Spanish domination from 1896 to 1898; and second, the Philippine insurr ection against American occupa tion. w hich lasted until 1901, compl ete l~' paralyZed the basic industl'ies of the I sla nds, including the sugar industl路y, and not until )0 years thereafter , or until the establishment of the free-trade relations between the United States and the Phili ppines did the industry begin to revive. The Phili ppi nes increased its sugar production less than other a reas. It h as been elToneously claimed that the P hi lippines incr eased its sugar production tremendously and out of proportion in comparison with other sugar-producing areas. The fact is that the Philippine increase in sugar production was relatively much less than that of other sugar-producing countries.

166

THE COMMERCIAL & INDUSTRIAL MANUAL

The Philippines reached its prewar peak production in 1895 prior to A mericnn occupation when it had a production of 431,000 short tons. Its recent peak of production wns in the crop year 1933-34 when approximately 1,5S0,OOO short tons were produced. 1n other words, for a period of 40 years the Philippines increased sugar pl'oduction 367 PCI'

cent. INDUSTRY MODERNIZED

Fol' about the same period Cuba inel'cased its production 489 pcr cent; Puerto Rico, 662 per cent; Hawaii, 412 pCI' cent; United States beet, 1,988 per cent; Java, 546 pcr cent. The recent increase ill sugar production in the PhiliPIJinc Islan ds was the result of two factors: First. Replacement of thousands of primitive mills by modern factories, which resulted in the increase in the sU~'lr recovery from the cane from 60 to 95 pel' cent, 'thi s improvement having been si milady accomplishe~ in Cuba, Puerto Rico, and other sugar-producing areas when those areas changed their inefficient, antiquated methods of manufacture to modeI'll practice amI j Second, 1J1crease in t~Lunit yield pel' acre as a result of the planting of ~h e same higher y:i~ld-

ing varieties that have beel) utilized in Louisiana, Java, Puerto Rico, Hawaii, and other sugar-producing areas, and the use of fertilizers, Unlike in Cuba, where there was a tremendou!; expansion of the sugar indust.ry as a result of the American-Cuban Convention of 1902 and the World War, there has been no extensive expansion of the sugar industry in the Philippinc Islands, Practically the same area of lands devoted to sugal' cane during the Spanish regime 01' prior to Amcrican occupation is now utilized for the cultivation of suga)' cane, due to the restriction in the land laws enacted by Congress in 1902 limiting the land holdings to not more than 2,500 acres, THOUSAND S OWN SUGAR LANDS Unlike the case in Cuba and other t ropical countries, where ownership of sugar-p roducing lands is confined to a few large proprietorl, in the Philippines sugar lands al'e owncd by thollc;ands of farmers, with small holdings of a few acl'Cs. In calTying O\lt its policy of helping the F i路 lipino l)eople in thcir development, Congl'css enacted all August 1, 190D, 27 yCaJ'S ago, the Payne-Al drich Bill, which es4\plished frce trade bctween the United

PHILIPPINES St.lltes nnd the Ph ilippi nes, under which a ll articles exported to t he Phil ippines from the United Stutes were admitted free of duty, and conversely all products fl'om Ph ilippine Islands coming into the United Stutes, except in anyone year sugar in' excess of 300,000 tons, and other limitations on rice find tobacco. The limitations on sugar and tobacco were later removed by t he Undel'\vood-Simmons T al'iff Act of 1913. The Filipino people opposed the establishment of this free trade on the g round that it "wou ld in the future become highly prejudicial to the economic interests of the P hilippine people a nd would bring ilbout 1\ situation which might h inder the attainmen t of the independence of said Ileople." But Congress saw fit to establish ~his relationship, and the Filipino people had to acocpt their status and planned and worked acconlingly their economic development. By virtue of the free trade thus established, sugar from the Philippines l'eceived H llreferentialtariff position in the American market Hgainst Cuban and foreign-grown sugar,,- ther eby placing the su~ar industry of the Philippines within the hi~hly American protective tariff wall's.

167

A MERI CAN CAPITAL I NVE STED T he immediate effect was the investment of American capital in t he Islands for the development of the sugar industry. I n 1910 a g r oup of American investors established the first modern sugar facto r y in the island of Mindoro, and two years later two othe r American companies erected sugar cen tra ls a t Calamba, on the islan d of Lur.on, and at San Carlos, on the island of Negr os. Thus t he modcl'n development of the sugar industry was initiated by pioneering American business men lind American capital, for it took a decade to convince the Philippine farmers of the advantages (,f improvill'g theil' sugar productioll and manufacture :lnd take advantag-e of the protedion of the American tal"iff and not until 1918-21 did the Filipino sugar producers go into the modernization of t.heir methods of manufacture and establish six cooperative sugal' centrals with the financial aid of the Government-owned PhiliPI)ine National Bank. This development of the sugar indust.ry has elevated the living standards of the Fili l)ino people and helped them to carl'Y out. improvements in educatioll, sanitation, and public works.

THE COMMERCIAL

168

INDUSTRIAL MANUAL

I NVESTMENTS ENOII~IOUS

The investmen t in the Philippine Isl ands in the sugar industry runs over $250,000,000, IUI'gely in the control of Americans and Filipinos. Like other industries this bu siness hus an 1ISsoeiation. The President of the tlssociution is the Honorable Rafael R. Alunan, known throughout the Philippine Isla~lds and in the United States to be a man of wide experience, g iven to aCCUl'acy of expression and conservative st...'l.tements. The tolal aggregate investments in the Philippine sugar industry amount to $251 ,512,535, as follows: In,,"'Don. in «n,ub." Invcs"".n. in I",,<is. Crop lo.nj ••

.$ k,OU,H5

1-10,000.000 12,SOO,OOO

"'iK<II.""o~.:'

~,ooo,roo SlSl,~ ll ,Sl}

Of the total of $84,012,535 invested in centrals, 40 per cent is American investments, 37 pel' cent Filipinos. 22 per cent S~anish , and 1 per cent cos~ mopolitan, as shown in the following table:

<I.".".~"""'r".'. ,."

, N •••"

N~'i'~.'''J

,,",....'

.J ,.,.1 '0"11,,,,0"

-------:--- ---ll,SI},6X1 Am.fiCin

Fillp,no Sp. nl1h Oeb,,,,

Toul .

}I , n 7,89~

-10 n

191.~ 1 7

12 I

Sk.on,Sn

100

I '1.8,11~,}74

----+----~s

Of the 45 centrals in the Philippine Islands, ap' proximately 24, or more than one-half of them, are small mill s, with capacities ranging from 150 to 750 tOilS of cane per day, l\'Iost of these mills al'e finan~ed by a group of Filipinos, while a few others were established by cosmopol itan investors, including Filipinos, Americans, and others, No Chinese al'e financially interested in the mills. Practically ail the land!l devoteJ to the cultivation of $lIga l' cane in t he Philippines are tilled by Filipinos. Filipinos engaged in sugar cultivation in the Philippines, including their families, number 2,000,000. FII.IPINO STANDARD 300 PER CENT HIGHER Unnke other sugar-producing countries, which must rely on foreign labor to grow sugar, the Philippines depends solely upon native labor for its production of sugar, Of the 48 provinces, 17 with a population of over 7,000,000 people or more than half of the total

population of the Islands, are directly or indirectly dependent upon the sugar industry. At lenst 2,000,000 farmers , laborers, and their families depend for their livelihood upon the grow~ ing of sugar cane. 'rhc sugal' industry, mOl'e than any othcr in~ dustry in the Islands, has been reSIJOnsible for up~ lifting the s trl.lldard of living of the Filipino people, Recognized authorities place the standard of livinp; of the Filipino people 300 per cent above that of the peoples of their neighboring countries, The money spent by the centrals and the plantel's fOl' the purchase of sUJlPlies and materials required by the sugar industry amounts annilalJ? to approximately $30,000,000, or over 60 IJer cent oj) the total money in circulation in the Islands. The sugar industry is the main support of the Philippine Government. For every dollar of value of sugal' produced in the Philippines, the Philippine Government derives in sales tax and other taxes appro~imately 20 cents, In 1932 the value of sugar expor ted from the Philippine Islands constituted 63 per cent of the total value of all their exports. The success of the cooperative system which has characterized the production of sugar in the Philippines has made the people realize the advantages of cooperatiVe efforts amonp; small producers and farmers. In othel' words, the s ugar industry of the Philippines has become a model for a modern scientific development of their other agricultural indush·ies. AMERI CAN INTERESTS IN THE PUILIPPINES

It is obvious from an examinnlioll of the records that the free-trade relationship not only has been beneficial to the Philippine Islands but has also been advantageous to t he United States. To the Philippines it meant development of their economic resources, particularly their sugar industry, improvement in their standards of Jiving, successful financing of their Government. in C~UTy ing out its manifold activities; in 40thel' words, it meant prosperity for the Filipino pcople. It opened to the United States II great Philippine market for American agricultul'al and industrial products, American shipping, bankil.lg, insurance, mining, and other financial enterprises. DUring Spanish sovereignty, Philippine commerce was diversified throughout the world. The

PHILLPPINES United States sold little to the Philippines-only approximately $3,000,000, or 3 pCl' cent of the Philippine purchases abroad, amounting to $ lll,OOO,OOO, for the IO-yesl' period, 1885路94, prior to American occupation. U. S. OBTAINS MONOPOLY

With the establishment of free trade, the United SUites has obtained a monopoly of the Philippine market, whel'C it has enjoyed tariff pl'Cferenee for 97 pel' cent of its products going into the Philippine Islands. FOI' the hlst dccude, 1924-33, the Philippines purchased {I'om the United States over $680,000,000 worth of goods, or (l1 per cent of its total imports from abroad. The Philippines today is the best mal'kct for American cotton cloths, galvanized steel sheets, dair)' product!;, cign\'c~s, nnd truck and bus tire casings, i\loreovel', the Philippine market is the best in the far eastern markets, f~r American steel-mill products and iron nnd steel advanced manufactures. The Chamber of Commerce of the United Stntt:'!;. in its bulletin entitled, 'Our World Trade"

169

in 1935, reported that the value of Jlurchases of American merchandi se by the Philippines for the calendar year 1935 increased 11.6 pel' cent, while imports of the United States from the Islands increased 11.5 pcr cent, For the same period purchase of American merch;lndise by Cuba inCl'eased 32.7 per cent, while American imports from Cuba increased 41.9 per cent. In this connection the chamber of commerce also rcported that while the value of purchase of American merchandise by Japan decreased 3.4 pel' cent, the value of Amel'ican imports fl'om Japan inCl'eascd 28.3 pel' ccnt. p, I. !',IARKET

STABL~:

These figures show that the United States, despite the dumping of Japanese goods into the Philippines, has maintained its monopoly of the Philippine market ;lnd indicate the stability and potentiality of the Philippine market for American products, It is to be bornc in mind, howcver, that the continuation of the American monopoly of the economic development of the countr y depend upon the ability of. the Filipino people to market ill the United States their ba!;ic exportable products, and

H ,\RROWI"G RII;Il. FlIl.LO-ALo\8/1l"O, RtlO\L

170

THE COMMERCIAL

the continuation, in an equivalent and reciprocal manner, of the mutuall y advantageous economic relationship between the two countries. As already pointed out, our tmgal' industry has been developed on the basis of free trade with the United States, imposed upon u s in the face of our

protest. Being the backbone of our economic life, its ruin and destruction would mean chaos and poverty to our people. 'Vo cannot conceive nor .believe that this gl'cat Republic would want to destroy the very foundation of our ecollomic existence ancl' it hlls f ostered its development and encouraged us to take ;Hlvantage of the fl'ee -tmde relationshil) it sa w fit to give us, I NJ USTICE DEl>10N!:iTRATED U nde l' t he Independence Act the duty-free sugar the Ph ilippine Islanas allowC!d to come into the United States dUring ~be 10-ycar t.ransition period was limited to 850,000 I,\,n g tons, equivalent to approximately 973,000 sho rl~' tons, raw value, The injustice of this pl-'ovision of the Independence Act h,II, al\'eady beel\\ l'eCognized in five instanccs s ince its enactment by COIl gress, First. The President, in his message to Congress rC!commcnding the enactment of the Independence bill , suggested changes in this legislation, and stated that "where imperfections or inequalities exist, I am confident that they can be corrected <tfte\' propel' hC!al'ing und in fairne ss to both peoples," Second, The sugar producers of continental United Stules, Hawaii, and Puerto Rico, after three months of conference and hearings, signed in Sep. tember, ][133, under which t hey conceded to the Philippines an annual quota of export to the United States of 1,000,000 short tons and l'cserve of 100,000 short tons, 01' a total of 1,200,000 Short tons available for export to the United States, 'I' hird , In his message to Cong...css on February 8, J !)34, recommending the enactment of legislation st:lbilizing the sugar industry, the President proposed that the Philippines be given ;\ quota of ] ,037,000 short tons, Fourth, In response to the! rcqucst of the President, Congl'css enacted the so-cn!!ed Jones-Costigan Act under which. the Secretary of Agricult.ure f ixed the basic quota for the Philippine I slands at 1,049,000 sh ort tons, Fifth, Hcccnt!y, the Secretary of AJ;I'iculture,

INDUSTRIAL MANUAL in revising the quota for 193e, aHotted the Philip_ pines a quota this yea r of 1,068,057 short tons. FAIR TnBATMENT INTENDF.D

It wi!! thus be seen that in every Pl'oposal for a suga l' s tabilization program, the Philippine I slands has been conceded a basic quota of from 1,037,000 to 1,200,000 short t.ons, and it is undoubt路 edly the intention, in granting this concession to g ive the Philippines fair and cquitable treatment with othcr areas. But t.his intcntion will be defeated, unless the Philippines will be permitted to bl'ing duty-free into the United States its quota under the Jones-Costigan Act, for wh ile the Philippines received this year an increase in its quota by 69,!)47 tons, it will have to pay the full duty of 1,875 cents per pound on 63,000 tons of this increase, by reason of the operation of the duty-free limitation in the Independence Act, effective upon the establishment of the Philippine Commonwealth, November 15, 1935. COSTIGAN ACT CAUSES Loss Prior to the coming into effect of the duty-free limit~tion of the Indepen dence Act, on November ]5, lp35, the Philippines was entitlcd to send to the United States all the sugar it could have available for eXpol't during the years 1934- and 1935, but because of the enactment of t.hc Jones-Costigan Act, after the Philippines had accepted the Independence Act, the Philippines was compelled to reduce its annual exports to the United States 101' 1934 and 1935 by 500,000 tons, or a tot.'L1 reduction of 1,000,000 tons for the two years, since its normal exports fOl' these years, had there been no quota system, would have averaged 1,500,000 tons annually, Thu s the Jones-Costigan Act, in effect, cau~ell the Philippine producers a loss of $70,000,000 which loss was reflected in revenues to the Phili llpine Government and the curtailment of the pur chases by the Philippines of American products, This loss, however, was partly compensated by the payment of benefits of thousands of small growers in the Islands from the processing tax, but these benefits did not apply to the Philippine sugal' factories, as in other tenitories and possessions of the United States, and did not compensate the Fil i路 llino laborers for the loss t hey inculTcd in thc reduced sugar production.

FILIPINO PRODUCE I:S COOPERATE

Dcspite the f:let that the Philippine sugar producers ha\'c shouldel'ed the ma;n burden of the issue

PH[LTPPLNES under the Jon~s-Costigan Act, they have fully cooperated and Dssisted iii accomplishing its objectives. No sel'ious opposition was encountered, considering the complicated cooperative system of suga r pl'oduction, involving many thousands of ~ mall gl"owcrs, nnd no disorders of any kind occur red. On the contrnry, the Philippine r ,(!gisiatul"c, in rt.03lJonsc to the recommendation of the GovernorGe~cl'al, enacted a limit",tion law, restricting the production of sugar in confol-mity with the quotas esl.abJishcd by the Jones-Costil1:'an Act. I n view of the foregoing consideration it seems, therefore, only fair that the Philippines should be permitted to benefit in t he same proportionate de",.,.ce as the other arcas from any increase in quotas consequent to any improvement in consumption, by allowing it to bring into the United States all duty

free whatever quo!."l it is allotted under the J onesCostigan Act or a substitute bill , a s long as this quota system is in effect, The' Philippines cannot derive the fuiJ benefit of incr eased quotas because of the operation of the Independence Act, and the equity to us can be given without prejudicing the interests of the producer::; of continental United States, nor any of the offshor e areas, The Fil ipino people will do their utmost to follow the course which Congress chartered for them toward theil' eventual freedom, It is our sincere desire and hope to be able not only to maintain but to improve the peaceful, prospel'OUS, a nd happy condition in which this great Republic has placed us during the past 35 years,

PHILIPPIr-{E INDEPENDENCE TO SUCCEED WITHOUT FREE TRADE' EN YEARS to live! Such is the prognosis declared by many who have diagnosed the maladies afflicting the Philippine Commonweal h, In it they discard possible violent political changes, the obliterati'on of Philippine natio lhood through subjection by a foreign power,

after American withdrawal. What they rea ly mean is that the economic futUre of the countl'Y upon the lapse of a decade is not on , ~' most uncertain, but extremely dark and discouragi ng,

FREE TRADE IN THE NATIONAL ECONOi\1楼 THE SITl.!A'l'ION IS THIS: OUl' wh')le economy is sust.'\inecl by our fl'ee trade rela~ionship with the United States, The larger portion of our basic industl'ies dC'pemls on the continu ance of such relationship, Sugar, COCOllut oil , cigars, cordage, anr! embroider;e~, l'eprcs<'nting two thirds of the totai vaJllc of our eXllol'ts and giving' employment and pu rch:lsing power to sr.veral millions of our popul. anons belong to this category, What would happen if, say tomorrow, Congress should place the Phil. ippines outside the tariff wnlls of the United States? It would be a death-blow to these industr ies, and many bC!lieve that OUl' nationnl eeonomy would later be swept away by a rising tide of business and bank fni lures, unemplo)'lTIent, fnlling- revenues, monntin~ deficit...<;, and popular di!>content and up路 "cnval. A gloomy picture indeed, but anyone who

has given t hought to the subject must admit that there is cogency in the logic of this portrayal. This sam2 pictUre. though in darker colors is painted by the pl'ophets of disastel' to reflect conditions at the end of the t l'unsition period of ten years when, in accordance with the Independence Act, the Philippines shall have become a sovereign nation, I chullc!Uge the aC'cul'acy of this picture, This eCOIlC'J1nic dcbaC'le may hRppen, but not necessarily, Specific conditions bring precise effects, While the logic of events may not be changed nOl' the operation of cconomic laws altered, conditions may be so modified as to pr oduce radically different rcsuits, J ust as u patient may by judicious living, propel' l'egimentation and sheer will-power extricate hi msclf fl'om the ti~htening grip of illness, so a nation by statesmanship, discipline, and will to sUI'vive, mny free itself from dangel'S that threaten it to extinction,

172

THE COMMERCIAL & INDUSTRIAL MANUAL

There is really no uncertainty as to 0\11' economic future, in so far ag this may he determined by political factors. In truth, it could be said that we now have .3 clearer perspective of the immediau future than many other countries, for we know that for ten years we shall continue under American sovereignty and that during that time we shall maintain with the United States t r ade l'clations as prescribed by the Independence Act. After that period the Philippines will become independent of and foreign to the United States. We know all this, and we also know the economic implications that will arise from these changes in our political status . ECONOMIC PI,ANNING

Wha t is there then to prevent the Philippines fl'um planning its economic life and growth to enable it to obtain the greatest benefits during the interim p~riod of ten years, while free trade with the United States exists, and at the same time gradually to pl'epal'e the national economy so that it may maintain itself stable and strong after the termination of that relationship? I can see no obstacle except the deep-seated skepticism that warps the thought or many our economists and leaders in industry and agriculture who, seeing the country secure under the existing free trade, are unable to visualize any other means of salvation except through the perpetuation of that al'l"angement. They are weighcd down by unreasoning fear and a sort of fatalism which permit them to see life and progress only in the Jighl of free trade with the United States. They see too small an al'ch of the great circle comprising the economic intel'ests of the whole nation. To them it is eithel' J"l'ee trade or chaos. But the question is not at issu,e, at least it is not for the Filipinos to determine it. By accepting indc pendence under th(' terms of the lndependence Act we have agreed to the termination of free t mde with the United States upon the emergence of the Philippines as a free nation. It is well to argue 011 the desirabilit.y of continuing free trade with the United States. I think we shou ld leave no :itone unturned to obtain the conclusion of an agreement with the United States looking to that end. But that is a different matter. We are merel y concerned with it in the same manner as a foreign nation looks upon the convenience of adopt. ing a trade convention with anothe)' countl'y for theil' reciprocal benefit. Presently we cannot as-

sume the continuation of our free trade relationship with America after independence, either in its present or in a modified form, and use it as a basis fOI' the foundation of our economic policies. Prudent and far-sceing statesmanship requires that our economic plans be predicated on an entirely contrary hypothesis; namely, that at t he end of the ten-year period we will trad~ with the United States on t he same footing as any other foreign nation. ECONOMIC REA DJ USTMENTS

Having established this premise, wc should next inquire what can be done to avoid serious injury to our national economy upon problems and losses which it should be the aim of the Government to minimize, if not completely to avoid. No substantial ga in in the way of balancing the national economy can be achieved through this means. MorC<lver, this plan would meet the determined opposition of the particular industries affeeted, for the transition period was pl'ovided so in case they can not adjust themselves to meet competitive conditions after independence, that investn~ents therein might be gradually liquidated without loss and workers in such industl'ies might have a fai r opportunity to shift to other guin~nl employments. REDU C1'ION m' PRODUCTION COSTS

The second alternative proposed, namely, to plaee (1111' protected industries on a competitive basis through a dl'astic reduction of production costs, should be attempted and systematically pursued. However, as this task involves a lon~ process of eX llerimenlatioll and adjustment, it is difficult to forecast definite results. Reductions of pl'oduction costs do not offer an effective cure to our unbalanced econom~', although by this means a few of our industries now de路 pendent on free trade may adjust themselves. When costs arc redueed by slashing wages there often arise social and economic problems of greater gravity than those sought to be remedied. The need of maintaining the standard of living of the masses cannot bc overlooked. This is pal,ticularly true in the Philippines where in many industries wages are already below what may be considered sufficient to supply the minimum living requirements of the workingman and his family, PROMOTION Of" NEW INOUSTn[ES ,\ND CROPS

for

The third course suggested opens a large field productive enterpl路ise. It does not require

PHILIPPINES lowering of wages nor restriction of output, much less the scrapping of existing industries. It responds to the urge of progress. It means development and growth, the utilization of our vast natural resources, the creation of opportunities for profitable toi l. The plan contemplates the establishment of new cr ops, chiefly to supply local demand in l'IulJstitution for articles now imported. While our exports should always be maintained large enough to provide for our fOl'eign payments,including debt and service charges and for trade and their balances :l.gainst us, it is not conducive to stability to allow that t.he production should reach a point where any adverse nction by foreign countries against our exportable surpluses may result in the collapse of our econnmic structure, EverlY nation of the wol'ld is devoting its energies to develop the home-market as the basis for the national economy and it will be to our lasting adval\tage that we commence early and now, The present administration of President Quezon realizes the importance of effor ts looking to this end. The creation of the National Economic Council and through it the coordination of all the activities of the Government dealing with economic activities are steps calculated to give impetus to the promotion of new industlties,. the provident utiliwtion of ou r natural resources, and the diversification of agricultural production, President Quezon made it plain in a message to the National Assembly that the Government would give direction and the necessary leadership to this undertaking, If no private capital is willing to enter this field, the GovCl'nment itself would provide the l'equired capital. This i~ at once a rational and courageous

173

policy. It should receive the indorsement and hearty coopcl'atian of all elements. It should merit the SUppOl'ts of capitalists and workingmen. It should serve to reassure -business that the Government is not going to adopt wildcat schemes to solve it:; fiscal pl'abIems, but will rely on the increase of taxable wealth for its needed revenues. Everyone realizes that there are many industries which could be developed in the Ph ilippines both f01' our social and economic advantage. We have potential power and raw materials in abundance, We have a ready and g l'owing market.. , INDUCEMENTS TO PRIVATE CAPITAL It is essential that sooner or later private capit."\l should assume this task of economic developmcnt. As a permanent poHcy, except as to importa nt public utilities, state socialism has as yet not provcn its virtue, and it is doubtful whether it can he extended to the whole field of productive enterprise without destroying the institutions of private pr operty, capitali~m, and representative democracy, Rutl private capital is shy and wary, always opposed to government interference in the field of pl'ivatc enterprise. And a large number of subtle influellc~s react on the ps,Ychology of investors, With pl'ivnte capit."\J and industry cooperating with toe Government in effecting a better balance in our national economy, our task of economic reconstruction could proceed rapidly and with g l'eatel' chances of success , In such case we may hope that by the enrl of the transition period, the Philippines wi!! u(' better able to stand economic separat ion hom Amel'ica than it is at present,

---

HISTORY OF PHILIPPINE FOREIGN COMMERCE' UR FIRST knowledge of the Philippines ;,nd Philippine foreign h'ade is from stray wlitings of ancient Chinese who were wont to refer to t he south sea regions wherein the Phil~ ippines is situnted a s the " Gold Neighbors" by reason perhaps of the wealth theil' trade which those islands brought to them. When the Chinese came to the P hilippines they im-

mediately realized that the development of commercial relations would bring them untold wealth. For this purpose they overran th:! Archipelago as traders and earned from the natives the name of "sungleys" 01' t raveling man(ul'ins, Through its contact with China, the PhilippillCS had regl1lll\' intercollrse wit.h the neighboring countries-with Borneo, Malacca, India. Cambodia and others ns far north liS Jllplln. Philippine foreign trnde was nt the time said to be prospe1'OUS, 路BI/ S, R.

"ICNDIl<OCTO.

Chi./, Commer"Ql l nld/j~",ce Diril1'on.

8 .. ,<(>"

0/ Comm ....~~

174

THE COMMERCIAL & INDUSTRIAL MANUA L

THE PEACEFULNESS and probity of the Filipinos attracted the attention of the oriental merchants who proceeded to establi sh in the archipelago international marts. Vessels from India, Ja'Pan and intermed iate points came to Luzon, Sulu. Mindanao and other islands in the archipelago, bringing foreign goods, whence, after mutual exchange, they returned home laden with domestic products. This trade cont.inued even aftcr the arrival of Magellan in the P hilippines in 1521. The Spaniards did not commence trading with the islands until after the fir st Spanish settlement.<; in the year 1565. Even then it was scanty and of very little weight. 'I'he real trade between the Philippines and Spain started in 1576, during the government of Guido de Lavezares. TI'ade with China was also resumed. Prosperity reigned again. "All these thi ngs'/ wr ote Pedro Chirino when he was referring to \he prosperity of trade in t.he Philippines, "madc life in that region pleasant a nd an ohject of desil'e of m erchant mcn. ..... And Manila was "t.he capital of their colony and the emporiulll of wealth which., by its commercial activity, gained in tho-"e -,,-ens t e title of 'Pearl of the Orient' ".

The period of commerciul prosperity did not last long, as shortly after Spain established herself in the countr y she instituted res trictions on Philippine trade. The gnlleon trade which limited the trade between Mexico and the Philippines to only two ships not to exceed threc hundred tons burden a year, was introduced in 1595. It was not abolished until a few years before the ports of the Philippines were opened to the commerce of the world in 183l. Our trade during the whole period was restricted to these two carrying vessels (reduced to one vessel only in 1605) which plied between Mexico and t he Philippines only once 1\ year. Philippine trade was thus almost cripplerl and only those who were privileged to load merchandise on the galleons enjoye1 j'cJlItively hig h prosperity. Spain herself suffered :IS thc Philippine treasuI'y was depleted for laek of revenue and had been compell ed to ask for succor from Madrid. At one time Spain contributed more than P25,000,OOO to help f inance the Civil GovornI,lent in the Philippines, The burden opened the el'es ','1' Spnin and nfter over 200 years, abolished the ~alleon trade, freedom of t rade by foreigners how~vE'r was restricted.

PHlLlPPTNES Aiter much agitation the ports of the Philip,in拢's were nt last opened to the commerce of the w,:,rld in 1831. Philippine commerce progressed rapidly, with China taking a fairly large share. 'l'hE opening of the country to t he commerce of the world stimu lated trade and increased the produd"ity of the Islands. In 1831, the total trade of the Philippines amounted to only P4,710,582. Twenty year s later, or in 1850, this trade increased to P13,961,620. In 1860, the value of Philippine total trade was P38,782,680; in 1870, PI07,480,500; in 1880, P88,078,808; in 1890, " 75,660,178; and in 1900, P95,708,304. Since 1831 up to the end of t he

Spanish regime, the overseas commer ce of the Philippine Islands had increased progt'cssively. DUl'4 ing the early yeurs of this peri od of competitive commerce in the Philippines, othe l' pOl路ts were opcned, like Zambounli\a, Cebu , 1I0ilo, Sulu, Legaspi, nnd Tnclobun, in uddition to Manila. The openi ng of the Sucz Canal in 1867 highly favored the foreign trade of the Philippines which reached its highest mark du r ing thc enb\:e Spanish period. The Philippine revolution of 1896-1890 which ended Spanish sover eignty in the country also marked the declinc of Spanish trade ill the ,untry.

China occupied the second position in ~he Philippine fore ign tmde during the last days of the Spanish r egime, surpassed only by the United Kingdom. Even aiter the United States had planted its Sovereignty in the country. China eontir:ued to hold a big share in the Philippine trade, especially in the export trade of the country. ChinaP hilippine trade began to decline in 1903 when shipments to China decl ined to less than a million. Imports from China, however, continued a t a high level altho much lower than under the Spanish regi me. Chi na's position has rcceded to fourth place since t hen . Since the early occupation days the United States has been predominant in Philippine fore ign t rade as well as in other lines of activity. T he rapid growth of Philil>pine American trade was enhanced by the free trade arrangement made in 1909 where by Philipp ine products with some restrictions were admitted hcc of duty in tht! United States, and vice versa. The almost complete monopoly of the Philippine market. by American products drive out as a consequence, Philippine products in the European markets . In 1936 the total share of

176

THE COMMERCIAL & INDUSTRIAL MANUAL

Europe in the Philippine exports was only 10 per cent.

Many new items have been added to the Jist of importa nt exports from the Philippines since 1897. Besides coconut oil and other (:oconut products, such as desiccated and shredded coconut, copra cake and copra meal, thcl'e are other important items of export at present which were almost unknown in OU I" export trade of thirty year.:' ago. Among these may be mentioned embroideries, exports of which were valued at Pll,528,691 in 1929 and P8,794,125 in 1936, Philippine timber and lumber, maguey, cordage, knotted hemp, fine vegetable fiber hats an f] innumerable shell products. On the whole, there has been a fairly broad development of the export trade of the country. While the basic agricultural crops which have always supplied the bulk of the country's exports have witnessed a t r emendous growth during the I st forty years, development has not been confined to them. The tendency of late has been strongly toward greater diversification of industry; and tliis tendency is likely to prove most significant in the :fiurther expansion of Philippine export trade in tile future. . The country abounds in other and new cr~ps and new lines of industries which have excellent latent possibilities of being exports on a larg'c scale not only to the United States but to other countries as well. Rubber, kapok, coffee, cacao, tropical fruits, and many others will likely receive greater attention in the course of the coming years, and will thus contribute to a very great extent in the future expansion of the export trade of the Phihppines.

No less l'emarkable has ~een the development in the import trade. Increased exports have natUl'ally meant larger purchasing pov'.' er for the Filipinos as well as a development of new tastes and wants for a greater diversity of articles, many of which are not produced locally. Hence, the value of total imports into the I slands has increased frOJ'il only about P38,000,000 in 1899 to approximately 1'294,300,000 in 1929, and to 1'202,252,349 in 1936. The long list of articles imported into the Philippines include the following principal items, with values for 1936 as follows: cotton goods 1'31,242,920; ir.on and steel and manufactures of, 1'30,535,257 mineral oils, PI5,376,158; meat and dairy products Pll,024,354; automobiles and t.rucks and accessories, P8,543,887; paper and manufactures of including books, P6,442,647; electrical machinery and ap-

paratus, 1'5,830,861; and tobacco and products of P7,130,860. The geographical distribution of the country's foreign trade during that period has undergone a matel'ial change. A market tendency of t he trade has been to concentrate most of its growth in one particular direction, with the result that the development along the old avenues has been comparatively small if it did not decline. In 1899, China had the largest shal'e of the foreign trade of the Philippines. The United Kingdom was second, the United States third, Spain fourth and Japan fifth. In 1936, these five leading: countries occupied the following relative positions with reference to total import and export trade with the Philippines; first, the United States; second, Japan; third, United Kingdom; sixth, China surpassed by Germany and the Netherlands; and tenth, Spain surpassed by Australia, Bl1itish East Indies and France. Following is the comparative value of total import and export trade of these five ieading countries with the Philippine Islands anel their relative positions for the years of 1899 and 1934; also, the annual average trade of these countries during the five year period of 1927 to 1931 inclusive: .) Uoird Sf......... . ,)

1'l"°'

Uoi«d Kin~dcm .• .) G"m.nr' .. 5) N.,b"t.nd •. ' ) Cbin>'

1J16 1'360.499,388

1t9J m7·19l1 1'191.194.000 1'10,600,000 19.no.ooo 2,400.000 1),600,000 1l,6Ol.405 H,Oi.l.a:o 10,72j,506 22.9B9,340 1.894,4011 l,438,98-1 317,0~8 9,1l7.J.Ol 24,7CO,COJ 7,14O.40l 14,1:16.000 4}.)1~.801

This trade between the United States and the Philippines to which the Philippines owes largely its development in all fields social, educational, political, lately received a jolt in the restrictions on Philippine exports into the United States market embodied in various laws and acts imposed by the American Congress. The Independence law of 1934 imposed so many restrictions that our statesmen slightly believe, progress under independence would hardly be expected, in fact the restrictions are regarded as detrimental to the economic st.'\bilitr of an independent Philippine Republic. The Philippine Independence law as it is, will no doubt curtail Philippine trade with the United States and for that matter its entire Trade. The Philippines must therefore resume its trade with other countries. China offers the best fip.id for such a move not only because of its proxi~ity, but

PHILIPPINES because of our histol'ical association with it and because many of our minor articles of export are actually imported by her from other countries. As

177

the Philippines continue buying from China in big quantities it is hoped China will open her door once more to Philippine export products.

DOMESTIC AND FOREIGN TRADE 1936-1937 REVIEW ' HE YEAR 193G mnrked the most active and successful year the Philippines has had in the

past six years. A notable improvement in bus iness conditions took place with practically all bl'anchcs of commerce and trade sharing in t he upward swi ng. Fin~ncial reports of leading companies showed substantial gains for the first time ill recent years with but a few exceptions. The psychology of improvement has become noticeabl e to a marked extent, Opti m istic about the future, more and more bu sinc~s men a r c now preparing their organi-

zations to t.'1ke care of the increased tempo of bUSiness. The total value of the ovel'seas commer ce during the first eleven m'onths of 1936, excluding gold, was P425,473,257, an incr ease of 30.87 per cent, as compared with the \.alue for the same per iod of 1935 with was P325,103,150. EXPORT TRADE RETURNS for the first cleven months showed substantial increase as compared with the cOITesponding I\edod of 1935. Total export during the firs t ele\'6fl months of 1936 valued at P244,870,365, show an increase of P75,678,871 or 44.73 I)el' cent from the cOl'l'esponding period of 1935, when exports totalled 1'169,191.491. The increase was due greatly to sugar of which the value amounted to P112,992,542, or an increase of P52,743,829 ovel' the 1935 total. Of all other exports, the value in 1936 was 33 pel' cent over the previous year, clue chiefly to increased value of ex-ports of coconut products and abaca. lmports also increased in value by 15.84 pel' cent over those in the previous per iod of 1935, or to P180,602 j 892 from PI55,911,659. LUrger purchases of iron a nd steel goods, whcat flou r , dairy products among others accounted for the ga in. The market for stnple products in the dome~tic trade as well as abroad took a stronger position during the year. With the exception of tobacco products, all of the principal export products enjo~'ed an excellent ye;\!'. A firm undcrtone developed in the market with sellers more optimistic thun at any time dUring the past ycars. A marked improvement in gcneral price levels for practically all staple crOllS was noted. Retail trade improvcd substantially during the year with the sales turnover filling e}.,"])ectations.

The total sales and l'esales l'eported by merchants and peddlers in Manila and in the provinces during the year amounting to 1>812,658,000 was the h ighest recorded 'since 193 1, am! 29 pel' cent over 1935 figures whiqh amounted to P63 1,614,OOO. The average monthly monetary cir~ulation likewise increased. From PI08,009,S75 during 1935 it went up to P125,791,520 during 1936. Mining continued to be the brightest spot in ÂŁhe Philippine picture during 1936 which proved to be a recol'd-breaking year in the history of the mining- industry in the Philippines. The spectacular advance of the industr y is indicatcd by the following facts; (I) gold p roduction moved into new high levels, comparative figurcs being 1'44,402,_ 653 for 1,936 and 31, 979,030 for the previous year, and increase of P12,423,623 01' 38,84 pel' cent: (2) dividends paid by produci ng mining companies rose from P12,489,109 in 1935 to P17,358,488 in 1936, an increase of 38.98 per cent; (3) sales of shares of mining companies was stepped up to P388,916,526 dUring the year, which amount is approximately nine times the aggregate sales last year totalling around P40,000,000. Real cstate sales in Manila in 1936 were the best since 1919. T otal sales for the year amounted to PI8,557,530 as compared to PI5,403,079 during 1935, an inCl'ease of 1>3,154 ,451 or 20 per cent. New construction activities thl'Oughout the Islands added substa ntially to the improvcment during the year.

178

THE COMMERCiAL

Building constructions in l\'lanila during 1936 totalled 1'6,153,440 or an average of P512,787 while those for 1935 totalled P3,289,B30 or an average of P274.153, Government finances were in excellent shape. Preliminary figures show a total collectIOn for the year totalling P84,275,885.41 as against P68,764,362.07 in 1935, an e,xcess of P15,493,523.34 or 23 per cent. Expenditures from the General Fund amounted to P72,212,374.37 against 1'66,099,358.67 in 1935. The total current surplus in the national treasury at the closing of the year amounteci to around P51,661,006.63. The satisfactory state of government finances is attributed to increased trade activity and to t he more aggressive campaign waged in revenue collections. Such was 19B6-a highly satisfactor y year when viewed from the standpoint of commerce a nd industry. What of 1938? There are numerous indications to show that 1937 will prove to be anethe)' good business year for the Philippines. A continuation of last year's favorable condi tions can be looked forward to and in some li!les furthel' streng h is expected to develop. The sugar industry, th mainstay of Philip-

sw 路

INDUSTRIAL MANUAL pine econom ic life, wiII witness a better year than the preceding. The 1937 initial export sugar quota amounting to 1,035,742 short tons I'eprcsent an increase of 37,632 short tons ovcr the initial 1936 quota. The gold industry, nerve center of prosperity, is expected to I'each the highest level of activity in its history during this year. Gold production will go up to 1)55,000,000 as compared with a r ound P44,400,OOO last year. Prospects of other export industries like tobacco, lumber, and a baca are also good. With building construction on the upgrade in the United fjtates the demand for Philippine lumber is surely to increase. Should the present Civil War in Spain come to an end t his yeal', which is not unlikely, a decided improvement in our leaf tobacco exports may be experienced. For copra and coconut oil, which a r e seriously being threatened by cheaper oils and fats in the United States, the prospects appeal' to be only fail'. The present active trading in these products is expected to continue during the early part of t his year but towards the second half of the year, weakness might possil;)!y develop if by that time Amel'ica's supplies of oils and fats will be adequate. The prevailing high tl'iCeS of 0\11' export l)lOducts will f luctuate but

PHILIPPINES it is safe to assume that they will still be maintained at profitable levels. It is to be hoped that typhoon and flood damages during this year will not be as extensive as the previous year, in which case better

crops and better yields may be expected. These are among the principal factors which,

barring unforeseen events that no onc can fore路 shadow, will contribute to making business in the Philippines in 1937 better than in the preceding

year. The only cloud r emaining in a rapidly clearing

179

This balance in favor of the country which amounted to around 1'92,000,000 offset the balance of trade in favor of foreign countries in their trade with the Philippines. Japan come next in the foreign trade of the Islands with a total of P43,314,802 of which P16,786,272 were in exports to that country and P26,528,630 imports of the Islands. In 1935, trade with Japan amounted to 1'35,061,678, exports totaling 1'10,718,729 and imports P24,342,949.

SIBLE FOR FAVORABLE BALANCE FOR ISLANDS

Trade with Great Britain increased to P1 3,364,249 from 1'9,223,750 in 1935. Exports to that country in 1936 ran to 1)8,317,520 a s against imports amounted to 1'5,046,729. Exports in 1935, totaled P5,767,726 while impol'ts amounted to " 3,456,024. Gel'many is thil'd in the foreign trade of the Philippines with a total of PIO,725,506, exports amounting to 1)3,791,573 and impol'ts to P6,933,933 in 1935, total trade amounted to P6,978,728, exports amounting to Pl,848,972, and imports P5,129,756.

Business recovery throughout the world in 1936, was reflected in the foreign trade of the Philippine Islands with a total amount of P475,148,455 as compared with the foreign trade in 1935 totaling P359,539,059, according to figures released by the Bureau of Customs last month, Exports of the Philippines amounted to 1>'.!72,896,~06 in 1936 as against the figures in t'ite previous year amounting to 1'1 88,491,360, while iF.lpol'ts totaled r 202,25:::,349 as compared with 1'171,047,699 in 1935.

The Netherlands runs fourth with total trade jumpingl to PY,1 37,301 in 1936 from P3,211,432 in 1935. Philippines exports amounted to P4,620,895 in 1936 against P595,849 in 1935, while imports totalled 1)3,516,406 as compared with P2,625,583. China is sixth in Philippine foreign trade, the total amounting to P7,340,402 in 1936, as compared with P7,395,343, exports totaling only 1'1 ,973,838 and imports P5,365,564 in 1936. Exports in 1935, amounted to 1)1 ,792,106 and imports P5,603,237.

These figures do not include the gold ore and bullion exported during the year under l'eview, which amounted to around 1'42,000,000.

Among other important countl'ies which traded with the Philippines in 1936 are Austmlia with a total of 1'5,571,694, exports amounting to " 854,550, imports 1'4,717,144; France total trade 1)5,321,990, exports P3,226,022, impol路ts P2,095,968; British East Indies total 1'4,867,890, exports 111,200,975, imports P3,656,016; Spain with a total trade of P4,692,745, exports P4,191,551, imports 1)501,194,

sky is the economic uncertainty arising from the application of the trade provisions of the Tydings-

McDuffie Act.

The trade inequalities growing out

of those provisions have served as a deterring in-

fluence to the smooth flow towards economic stability and progress now being witnessed in the country. COMMERCE WITH

UNITED ~TATES MAINLY RESPOK-

The United States, as usual, tops the list of importers of Philippine products with a total of 1'215,060,654 as against 1'149,871,073 in 1935, Tmports from the United totaled "122,994,525 as compared with 1'108,733,000 in 1935. Total trade with the United States in 1936 amounted to 1'338,045,179 as against 1'258,604,073 in 1935, excluding trade done with Hawaii, Guam, Porto Rico and Virgin Island, which amounted to approximately 1'1,730,000 in 1936, The favorable balance of trade of the Philippine Islands against the United States was the principal reason for the favorable balance of trade of the Islands in her trade with foreign countries.

French East Indies had a tot.'!.l trade with the Islands amounting to 1'4,287,469, with exports totaling P35,009, and imports 1'4,252,460 ; Dutch East Indies total P4,857,890, exports Pl,200,975, imports 1'3,378,743; Canada, total 1'3,689,556, exports Pl.286,785, imports P2,402,771; Belgium total 1'3,492,720, exports 1'1,500,748, imports Pl,991 ,972; Italy total 1'2,499,157, exports 1'2,357,303, imports 1'141 ,854.

180

THE COMMERCIAL & INDUSTRIAL MANUAL

TRADE IN 1936 GIVES BALANCE TO THE PHILIPPINES' HE UP WARD 'TREND IN PHILIPPINE BUSINESS which became evident in 1935 was accentuated in 1936 and assumed some of the aspects of a boom. Export crops were generally good and, with the exception of tobacco, were in excellent demand in foreign markets. P l'ices reached higher levels than have becn seen in recent years and t he valu'e of exports, including gold, was greater than in any yeal' since 1929. I ncluding some 1'42,000,000 for gold and approximately P6,O(lO,000 for sugar benefit payments, which may bc consid~red as equivalen t tt· exports of sugar, the total valu~ of exports was 1'320,896,000, or only about four pel' cent b~low t he record 1929 figul·e. Imports also increased but no L in the same proportion, due to greater stability of prices on imported goods, and the Iavol'able balance of t r ade reached a record f igure. Prices of some un ported goods increased rapidly toward the end of the year, indicating that there will be a considerable increase in the value of imports in 1937. Crcdit conditions were excellent.

P A YJ\1ENT of P30,OOO,OOO in suga r beneIits in the later part of 1935 and early 1936, largely to a class of people who were already good financial condition and who had no incentive to expand their productive capacity, due to sugar Iimit.'ltion, created a pool of funds available for investment, which found its way mainly into the mining share market. Share quotations advanced steadily and rapidly throughout most of the year, the oPPOl'tunity for quick and spectacular profits attracting savings and even intcresting some foreign capital. 'rhis acEivity was reflected in bank figures, with demand deposits ovenh'afts, loans and cash incrcased substantiaHy. Debits to individual accounts, dUring the height of the speculative movement, nvel'age 150 per cent g reater than the previous year. There was a moder ate reaction toward the end of the year. Note circulation increased markedly, due to sugar penefit and v~tCl'llns bonus payments and to genera l prosperous conditions. In the exchangc market, the peso was strong throughout the year, due to the heav~' incrcase in exports, a reduction in remittances, particularly to Spain, and some imports of capital attracted by investmcnt opportunities. The Commonwealth Government benefited from the marked increased in prosperity in its fir.; t full year, revenues in the General Fund increa!<ing to about P76,675,OOQ, compared with P65,OOO,OOO in 1933. T he 1936 figure includes P<I,679,OOO !'epJ'esenting l'~payment by the Philippine National Bank of old advances. The increase in ,'evenue was sufficien t to cover augmented expenditures for national BI/ J. BAI\TI.l."TT R' CIURDB. ,Im<r;ca" Trad. C .. mmiui .."tr.

defense and economic measures ir.'cident to the es-

tablishment of the new Government, and a comfortable surplus was shown for the year. Actual expenditures in 1936 totaled about Iry,OOO,OOO, including P9,990,OOO, representing a loan to t he Manila R. R. Company to permit it to retire bonds. New revenue bills were passed by the National Assembly in its 1936 session to COVel" increased ap propriati.:.~s for the next year and a balance of revenues and appropriations for 1937, in the neighborhood of P80,OOO,OOO, appears probable. Recei pts in the Special Funds highways and port works in 1936 anpealj to have been at least 40 per cent greater thun in 1935, due partly to heavy imports of gasoline and lubricating oil duL'ing the end of the year in aflti· cipation of a tax increase, partly to t'estol'ation of sugar exports to a norlllal basis and p.:ut!y to g~n · eral prosperity. Government COmlJunics, with t he exception of the railroads, showed increased profits in 1936 and promise to do even better in 1937. Several new Government companies were formed or authorizcd, including the National Ri ce and Corn COl'J)oration, which was active in the stabilization of rice prices during the year. A National Power Corporation, organized at the end of the ye~r, is empower ed to issue bonds Lo finance the development and opera· tion of hydl'o-electl'ic projects. A National Product Exchange, to facilitate trading in agricultural products, is in process of or ganization, and a committee ha s recommended the organ ization of a National Iron Company to study the possibility of developing iron OI'C deposits. The National Develop· ment Company was reorganized llS a public com-

PHILIPPINES puny.

The Nationa l Economic Council, organized

at the beginning of 1936, was engaged during the year in the study of the industrial needs and possibilities of the counh'y. A Radio Advisory Boar d was organized to study the possibi lity of nationalizing radio broudcasting and a Gover nment service insurance system was authorized to replace the pension funds.

Sugar pr oduction was on a more nearly normal basis in the 1935-36 season, with a total p roduct ion of about 952,000 short tons. The crop fe ll

short of expectations due to unfavorable weather a nd was ins u fficient to cover an export quota of 962,000 tons a nd a domestic quota of 70,000 tons, making it necessar y to dr aw on the p revious year's reserve. The r evenue to the sugar industry was, therefo re, considerably greater than the CI'Op figure would indicate, even taking into considerat ion t he better prices in 1936, ~he 1934路35 crop totaled 69 1,000 tons but that included 100,000 tons of reserve, which brought in no revenue, Alcohol production totaled 59,384,854 liters, against 54,978,000 proof liters in the same period of 1935, PI'oduction of other expor~ was in general not much greater in quantity than in 1935 but substan-

181

tially greatel' in value. Copra production was only slightly g r eater than in 1935 and exports were about 10 per cent greater in volume but about 31 per cent greater in value, Coconut oil exports were slightly reduced in quantity but increased about 13 per cent in value, Copm cake and meal and desiccated coconut exports increased moder ately in volunle and value, Abaca production decreased about 14 per cent, while exports decreased 8 per cent in volume but incr eased about 50 per cent in value. The small tobacco crop of 1935, together with disturbances in the principal foreign market and decreased demand in the second best mal'ket led to a 32 per cent decrease in the volume of lea f tobacco exports, wi th a more moderate decl ine in va l ue. T he tobacco crop harvested in 1936 was nea rl y normal, however. Cigar production was grea tly reduced due to reduccd demand f r om the United States. Lumber exports were apparen tly nearly 30 per cent greater than in 1935 and with the domestic market also good, mills were working to capacity in the later part of the year and some of them double shi fts . Production and exportation of embroideries, cordage and pearl buttons was

182

THE COMMERCIAL

somewhat lower than in 1935, but exports of huts improved. Gold production increased about 37 pel' cent ar.d iron ore neal'iy 100 per cent. Both are expected to show further increases in 1937 and there m?y be a moderate production of chl'orne, manganese and copper. Production for the domestic market improved in most lines, with cement production showing an increase of about 14 pel' cent due to greater building activity. Cigar and cigarette production for the domestic market increased only about 2 per cent, doing very little toward making up for the decline in exports of cigars. The four manufacturers of canvas rubber-soled shoes increased their product ion nearly .25 pcr cent and arc now supplying practically the entire domestic requirements. Leathel' shoe factories also had a good year, sales increasing by about 20 pel' 'cent. l\'Ianufacturers of soap, vegetable lard and margarine were busy throughout the year, in spite of losing most of their American market. Three new companies were organized to make soaps, perfumes and vegetable lard, but none of them had started business by the end of the year. A company was organized at the end

TRASSPLANTINO

INDUSTRIAL MANUAL '---of the year to can tuna fish. There was a good market for most imported goods, although cotton textiles rather slowly during most of the year. Total imports of cotton textiles were substantially lower than in 1936, but the reduction was partly made up by heavier imports of rayon from Japan. Imports of cotton cloth from the United States continued to decline, in spite of the Japanese quota agreement. The demand for cotton textiles increased strongly in the later part of the year but advancing local prices never quite caught up to Amcrican mill prices and the inability of American mill s to offer prompt or near delivery was an added deterrent to business being placed. Japanese competitions continued keen during most of the period, but was largely withdrawn at the end of the year, promising a much better market for American goods in the first half of 1937 if the mills are able to take advantage of the opportunit~,. Mine and building activity brought about a marked increase in the sale of machinery and iron and steel products. Japanese competition in nails, wire and galvanized sheets increased dUring the year but was suddenly discontinued in December, when Japanese prices were increased as much as

MANGO TRBI!S-SINGALONO EXPBRIMENTAL STATION

PHILIPPINES 50 per cent. EUropean prices on these products also rose sharply, leaving the field to the United States at the (md of the year. Genern l prosperity created a good market for automobiles and accessories, flour and otner foodstuffs, electrical equipment, paints, toilet article and a variety of other goods. Automobile silles were up 17 per cent, truck sales up 15 pel' cent and radio registration up nearly 25 per cent. Sales tax receipts indicate an increase of about 23 pel' cent in total sales recorded. Export cargoes were about 30 pill' cent greater than in 1933 due mainly to incl'cllsed sugar shipments but partly to logs, lumber, iron' urc and other commodities. Interisland freight and passenger movement was very good throughout thc year,

Railroad cllrlolldings did not incrcasc in spite of the largel' sugar c\op, duc to continued competition from other forms of transportation, Scheduled airplanc services to Baguio and Paracale were incrcasingly popular, The Manila-Iloilo-Davao sen'ice was suspended, following the loss of a plane in July, the first serious aeci.,dent to a transport plane since scheduled services \Vfl'e started in 1933, This service, as well as the i\fanila-Iloilo service, will be resumed cady in 1937 witli an amphibian plane of improved model. Exports, not including gold, totaled 1'2'72 ,896,106. an increase of 45 pel' cent ovel' 1935, The increase was due partly to sugal' exports, which were nearly twicc as great as the previous year, but exports of abaca, coconut products, lumber and timber, hats, cutch and maguey were also substantially greater. Cordage, embroiderics, I)Cal'l buttons, leaf tobacco and cigars werc e:qlol'ted in reduced volume and value in 1936, Exports to the United States wct'c 4j per cent g reater than in 1935 and made up about 79 pel' cent of totnl exports, against 80 pel' ccnt the previous yeal', EXports of sugar to the United States lIeat'iy doubled, while exports of other products, notably coconut products, hemp and lumber, increased about 21 pcr cent, EXports to Japan wcre 57 pel' cent ahead of 1935. owing chiefly to increased shipllIents of. it'on OI'C, logs and hemp, and made U禄 6,15 per cent of total exports, compared with 5,6!l pel' cent the yeuI' before, Exports to othel' Oriental Countl'ies wet'C slightly increased and exports to EU1'oile were up 61 per cent, due to heaviet' shi pments of copra in the first half of the yen,' and

IS3

lumbcr throughout the year and to better prices for abaca and copra cake. lmpol'ts totaled P202,252,349, or wel'e slightly under the 1930 figure an 18 pel' cent greater than in 1936. They were slightly undel' the 1930 figure but much grea ter than in any more recent year, They increased in nearly every category, ex路 cepting cotton cloth and printed matter, Imports from the United States were 13 pel' cent better than in 1935 and made up 6 1 pel' cen t of totnl imports, compared with 64 pel' cent in 1935 and an average of about 63 l)el' cent fo r the past ten yea rs, Imports of cotton textiles from tho, United States were reduced but most othel' products, notably machinery, iron and steel products, inCl'eased in gJ'eater volume, Imports fl'om Japan increased r..inc pel' cent and made up 13,12 l)er cent of total imports, a slight deCl'ease from the 14.23 pet' eellt in 1935. Rayon textiles and canned sardines accounts fol' a considerable part of the increase, There are indications that Japanese cOlllpetition if; this market wa,; less keen in the fil'st few months of 1937, Imports from all EUl'opean countries were substantiall y increased, notably the :\ldherlands , Germany', Great Britain and Belgium. Heavy im路 ports of floul' from Austl'1llia and Ca tfada increased the value of imports from those eountt'ies, Th~ vi!lible balance of merchandise trade in 1936 was favorable in the amount of P70,643,757, If gold exports are included, the favol'able balance is if:cr eased to about 1)112,000,000, and with sugar benefit payments considered as equivalent to sugar exports, to 1'118,000,000 a record figure. The favorable balance was due as usual to a large favorable balancc with the United States, which umounted in 1936 to P92,056,129, plus ]"12,000,000 of gold. Trade with Oriental Countrics showed an unfavorable balance of 1'28,689,578, of which 1'9,742,258 was due to trade with Japan, With EUrOI)C anci the rest of the world, there was a favorable balance of PS,960,924. In 1935, the favorable balance with the United States was N1,138,073 (plus " 26,000,01)"0 of gold), the unfavol'able balance with Oriental countries 1'25,248,500 (of which 1'1 3,62.1,220 was from tmde with Ja]lan) and the favol'able balance with Europe and thc rest of world only 1'1,152,489, The National Assembly in its first regular session passed a record number of bills, including 1;cvel'al revenue bills: those increased werc the inhel路itance ta...;, incomc tax, firearm license fees , tax on mining production, tax on retail leaf tobacco

184

THE COMMERCIAL

dealer5, taxes on ga~oline and o lubloieating oil and motor vchicl~ license fees. New taxes include an amuscmcnt tax and a privilege tax on brokers and market vendorso The duty and excise tax on beer werc increased, the former subject to A mCl'ican approval. A bill was passed giving the President of the Philippines the right to increase duties by a maxi. mum of 400 pel' cent und decrease them by a maxi· mum of 75 pel' cent, by exeeutive order. This also await s American approval. Provision was made for a comprehensive census in ]~37. A number of labor bill!!' were passed, including a bill providing for a Court of Tndustdal Relations and one fixing a mini· mum wage for Government employeeso Agl'icultul'e was the beneficiary of bills providing for warehouses for COJlloa and tobacco, making appropriations for extermi nation of pests and diseases, creating a livestock promotion fund and a buntal fiber stabilization I\md creati ng a NatiO{lal Produce Exchange to facilitate trading' in agricultural products. A new corn· p rphensivc mining law ~d a Bureau of Mines were provided to regulate miliing and a secudties Com· mission to protect investol Aviation was encour· aged by all appropriation fO\ainnaiJ contractso The President was authorized t~ negotiate with the President of the United Stat s toward the holding of an economic and trade conference. A bill creating a Govetonment-owned National Merchandising Corporation to improve the competitive position of Filipino retailers failed of aPPI'oval, as did a hill to impose a 10 lJel' cent tax on certain luxuries, in· eluding automobileso The volume of exports may be expected to increuse moderately in 1937. Sugar exports will be the same as in 1936 and copra and abaca plooduc. tion is apparently not likely to increase very no· tably in the first half of 1937, although some increase may b e expected in the last half of the yearo Lumber and Oloe shipments will probably increase in 1937 and cigar and leaf tobacco exports will prob· ably not go any lower. Prices are high at t he end of the year and if they hold at anywhere neal' the present le\'el the value of exports should show a substantial increase and, including gold, might even approach the 1929 figureo Prices of some of the principal impol·ts increased rapidly at the end of the year. I mports in 1937 aloe likely to increase moderately in quantity and more substantially in value and the very heavy favorable balance shown in 1936 will probably be reduced. Government re· venues and expenditures will probably be balaned at aloound P80,OOO,OOO. Banks may find increas· O

INDUSTRIAL MANUAL ed use for their l'esources, with the higher prices of both imported and native products. Although the Philippines are dependent to a greater extent than most counll'ies on conditions in fOI'eign mal'· kets, making pl'edictions difficult, it seems probable that the Islands will experience anothe l' year of prosperity in 1937. The results of the Trade Con· ference planned to be held in Washington during the year will exert a psychological influence. Exports appeal' to have been substantially low. er in January than in December, due partly to II shortage of ships. Sugar exports were slightly reo duced, though they might have been considerably g reater if space had been available. All coconut pro· ducts were exported in considerably reduced volume, although the average price was probably a little higher in December. Abaca exports were about the same as in Decembel', but shipments of cigars and leaf tobacco were very small. Gold shipment con· tinued at the normal rate but shipment of other minerals to the United States has been continue!1 until better shipping facilities are available. Sugar prices were strong at the beginning of the month but declined sharply in the second week and ~w market is d.ull during the balance of the montli.. The domestic market was a little fir mer in the first half of the month but eased off in the last half. The liberal domestic quota offers little encouragement to speculation. Copra arrivals continued very light and with an insistent demand for oil, prices rose to the high. eslj level in several years in the first hall of the month. They feel in the last half of the month to a point below the opening level, as the demand for oil declined. Exports were unusually long due to the shipping situation. Coconut oil was in good demand at advancing prices during the f irst half of the month, but weakened in the last half. Copra cake and meal prices continued firm throughout the montho Exports of desiccated coconut were considerably reduced, due pal'tiy to the shipping sit. uation but mOl'e to the scarcity of nuts and conse· quent reduced production. Abaca prices were firm during the first of the month, as export demand continued. Foreign buyers held off from the market during the last half of the month, however, and Manila prices de· clined as it became apparent that production in the Bicol region will be somewhat larger than had been anticipated. ]n Davao, where there was no evidence of increased production, the market con-

PHILIPPINES tinued steady to firm th roughout the month. With substantially increased balings and exports about

the same as in December, there was an increase of about 18,000 bales in stocks. Leaf tabacco prices were ,'teacly at a level C<> I1~ siderably higher than that ruling before tb Deccr,lbel' floods. The 1937 crop in the eagnyan Valley is expected to be below average, a lthough weath~r conditions so fal' arc invorable. Exports were small and the domestic cigar industry is wOI'king at a low level of production due to small demand from the United States. Rice prices wel'c slightly eusicr in January, but palllY prices were susta ined. The National Rice and Corn Corporation continued to purchase palay at the fixed rute of P2.26-1 ' 2.50 Pill' cavan. Gold production fell off a little in January due to lower average gmdc. of ore milled, but exceeded the P4,OOO,OOO mark for the fifth consecutive month. February production may be slightly lower due to the shorter month, but it is expected that the trend will continue upward throug:hout 1937. Development of base metal properties continues but there were no exports to the United States on account of the high freight rates and the scarci ty of freight

185

space. Engineers ';ompleted their examination of the eebu Portland Cement Company's coal property and recommended development. Impol路t collections were considembly reduced in January. apparently due to the shipping stl'ike. but were onl y slightly below Janual')' . H136. The valne of commercial lettel's of cred it opened was notably increased. rmport collections throughout the I slands. Stocks of imported goods gene rall y continue low, with prices firm. Flour stocks may be expected to be increased in Mareh with substantial arrivals of American flour bought some months ago at low prices, which will pr obably unsettle the local market tempo l路al路i1y. Local prices of American and Japanese textiles were very fi r m in the first three weeks of January, but fell off a little in the last week when the demand turlled dull. Imports of American textiles wer e very low in January. Imports Il'om Japan were heavy but the volume of new ol'ders is light, as Japanese mill s cannot promise early delivery and, iUl'thel'more, the quota is rapidly being used up, Japanese competition on iron and steel goods was almost completely withdrawn from the market,

186

THE COMMERCIAL

Imports of automobiles by dealers wcre reduced in January but imports of trucks WCl'C heavy. Sales of both cars and trucks were very good. I mports of cars are expected to increase in February and ::U2.l'('h, as new models alTh'c. Sales of ti r es, parts and accessories were good. Railroad ('adoadin~s showed a seasonal increase over the previous month (I\:c to increased loading of suga r cane, sugar and rice. They were only slightly higher than in January, 1936, however, the increase in sugar cane being offset by declines in most other commodities. Con solidated bank figures showed a decli ne of " 3,500,000 in investments dm'ing January, offset by an increase of about the same amount in loans, discounts and overdrafts, appnl'ently reflecting the incrcasing sugal' movement. Other items showed H : l'y little change. Manila bl'anches of fOl'eign banks increased thm' indebtedness to theil' head the individual accounts CRn'nol. properly be compal'erl with tho"e fol' December I~.r Jor .January. 1936, as the consolidated figures in Ja,ual'Y, 1937, fol' the first time, include the figures o~ branches and agencies within the I slands. Circulat~n increased moderate路 ly. The dollar wa s a little strongel' in the exchange

FaRRY fOR lionT

T""'l'F1C Aclto$S

TilE

INDUSTRlAL MANUAL market as a result of reduced offering of sugar bills. This situation is believed to be temporary, but new support might come from an influx of imports du ring the f irst few weeks after settlement of the shipping strike. Government revenue was almost exactly the same as in January, 1936, an increase of 9.42 per cent in Internal Revenue collections being offset by a decI'ease in collections by the Bureau of Customs. The latter was due to the fact that excise tax collections werc extremely high in December , anticipating an increase in the rate, and were natUrally very small in January. Collections of Customs duties held up well. The President took thp. precaution of ordering all departments to reserve five pel' cent of theil' budget allotments due to the possibility that 1937 revenues might fall below budget estimates. Power production totaled 1l,544,421 KWH in January, a slight decrease from thc 11,636,614 KWH in December but an improvcment ovcr the 11,158,143 KWH in January, 1936. Real estate sales totaled Pl,444,729 in January, about 17 pel' cent undel' the unusually high figure for December, 1936, but about eight per cent over

c. .G ... \路 ... '"

RIV8"--C ... M ... I. ... NIUG ... N, C... G ......... N

PH IUPPINES the previous January, the figure having been exceeded in only three Januaries since 1921. Prices arc still considered low by dealers but are improving. Three important transactions reported as having been not yet been recorded. It is generally expected by dealers that sales in 1937 will exceed those for 1936, which werc the largest since 1919. New building permits were moderate in Janunry, totaling 1'400,280 fOl' new construction, which compares with 1'616,390 in December and with 1'494,720 in January, 1936. P ermits for repairs continued small at P20,060. Permits compared with those of the previous January werc as follows: , .....J

N,w,,,,,,,,,,,,,,,,,. Rep.I", .. , .

j'J# (1',,,,,)

(1'",.)

494,710

~.180

19,1)0

20,060

11)7

There is still a very great shortage of modern residential buildings ~d, since the increased interest in mining development, in office buildings, It is expected that permit\ in 1937 will be at lens~ ns great as in 1936_ There were 578 radio l'e\eiving sets !'egiste!'ed in Deccmber and 121 cancellations, For the full yeBl', thel'e were 5,745 new sets\egistered nnd 1,283 cancellations_ , There were 46 corporations newly registered in January, with PI8,631,000 of aut~ol"ized capital, of which P4,4!H,900 wns subscribed and P2,114,770 paid-up in cash, plus P7,600,000 in property. All of the !lew companies Bre contl"Olled by Filipinos, with the exception of one Japanese heel' factory with I~OO,OOO subscI'ibed capital, one Americlln mine management company with P60,000 subscribed and one Chinese merchandising company with 1'20,000. The Japanese beer company has an authorized capillli of P1 ,000,000, all of which is accepted to be

18,

paid-i n within the next few months. Most of the new companies are concer ned with mining development or investment, 24, with subscribcd capital of 1'3,038,700, being directly engaged in mining. In addition, foul' brokerage companies were incorporated with P224,000 of subscribed capital; 2 investment companies P240,000 and 3 management companie;:; with 1'90,000. There was one Filipino insul'ance company incorporated with 1'1 ,000,000 of authorized ca pital, of which P375,OOO was subscribed and paid in. Two transportation companies were incorporated with aggregate subscribed and paid-in capita l of 1"38,000 and one company as formed with 1'10 ,000 liubscdbed and paid-in, engage in poultry raisil:'g. There were 22 partnerships registered in Manila, most o[ which were Chinese and engaged in merchandising. One was a limited partnershilJ with P30,OOO capital and the others general partnel'ship with 1'30,000 capital and the others genera l partnership with total of '346,548. They included (lne lumber company with P50,000 paid-up and one mining syndicate with P38,500. SUYOC S [,IDE Negotiations [or the erection of :\ 50-tOil mill and a hydraulic electric plant on the l>ropert~' of Suyoc Slide Association a r e under way with Vera Reyes & Salgado, I nc, This is in line with t he recommt>ndation of the engineer in charge or Suyoc who reported that suffici l'nt ore reserves which will hH~t [01" several yeur!; ,He in sight at prescnt, Engineers of the Vera Reyes & Salgado, Phil· ilJpine rcpresentatives of the Gibsoll Min ing Machi nery Co. And the Exolon Company of the United St."ltes, will soon inspect Suyoc Slide P roperty to determine the site of the I)l"oposed mill. Sevenl! tons of O1'es have already bC:::!1l ta ken from the mine and will be shipped to the United S lute ~ fOl' te.'<t;$.

THE PHILIPPINES: A PROFITABLE MARKET FOR THE UNITED STATES' N H ER tmde re!utions with the United States, thc Philippincs, except in isolatcd cas«s, h!\i:\ IIhn\~"" had a favorable balance of t r ade; at least, s:> fill' as th« visible balance is conccrncd, 'rhere IVa s a year when the balance in favOl" of the PhilippillPs rl1n almost to "100,000,000. Becll use of this tcndenc~' of the tl'8de, some writers and tra d ~ analysists have often a sscrted that the fl'ec tl'fld~. which hilS been in force since 1909 has done mor c good to thc P hilippines tha t it has to th., Unitcd States.

188

THE COMMERCIAL

AT FIRST BLUSH, this view seems to be sustained by the statistics, especially if We! consider the fact. that for the last 35 years the Philippines has amassed a fnvonlble balance reaching the staggering tOt.I) of Pl,005,146,747. However, a more meticulous analys is would show that the free-trade arrangement, far from heine- one-sided, has been mutllall~' beneficial to both countries. PURPOSE OF T il E FREE TRADE

T he free trade, it is generally conceded, has been instituted by the United States, not so much because of a dcsb'c to place the Philippine market under the complete control of the United States, as because of the importance of t he Archipelago as a source of much needed tropical raw materials. The total im port t r ade of the Philippines is just a "drop in the buckel", being hardly 3 per cent of t h e total export t ,'ade of the United State!;, so that the cont-'ol of the Philippine trade could not have been the principal motive wh en the free trade was conceived. It might be to a~ure the United States of a cheap source of raw materials to meet the demand of an industrial nation wi h vast domestic and foreign markets to feed with a wide variety of man· ufactured products, Today, the United States absorbs over 80 per cent of the total exports of the blands, as compa red with only about 25 per cent before the free trade was inaugurated. Raw materials and scmi=manufactured products have constituted the g r eater bulk of these Philippine expor ts. Thus t he object of converting the P hilippines into one of the most important sources of raw ma terials for t he United States is eviden t. In consequence of Philippine-Amel'ican free t r ade, the I slands, too, have become a large consumer of American goods, Phil ipp ine pu rc hases of American products lately, under the free trade, constituting about 65 pel' cent of the total import trade. In other words, t h e United States "killed lwo birds by one shot," gained more out of the free trade than the Phili ppines. U, S. HAS DlvERsn' IED MARKET

The United States, as shown by statistics, has a well diversified market, in spite of the free trade with the Philippines, while the latter has now shifted the gl'eater bulk of her exports to only one market.--the United States. The Philippines has been having a favorable balance in her trade \,.-ith t he United States, it is true; but the latter has also t he same tendency in hel' total fo r eign trade from

INDUSTRI AL MANUAL year to year. Even in her period of acute business depression the United States could still net a bal· ance in her favor. For instance, she made a favor able balance of $225,435,000 in 1933, when she was in the trough of one of the most acute business depressions in her history, I n more p r osperous years, she could make as much as $4,000,000,000 for favorable trade balance. It, therefor e, follows that ·what the United States has been losing in her annual trade with the Philipp ines, she mor e t han made up in her trade with all the world. It is the inescapable conclusion a lso t hat t h e free tra de has benefited as many people in the United States as it has done in the P hilippines. Consider t hree of the leading exports of the I slands, such as sugal', cocon ut oil and abaca f iber, which now feed several industr ies in the U n ited States, such as the sugar refineries for sugar ; soap maker s and margar ine manufacturers for coconut oil ; and cordage and twine factories for a baca fiber. Using the 1929 f igures as bases, t he "Statistical Abstl'act of t he United States" for 1935, fu r nish es the foll owing data about those factories in th, United States: . S ugar Refiner ies:-Number of establishments, 21; wage earners employed, 13,912; pay roll of wage earners, $17,850,000; cost of mater ials, f u el, and purch ased electi'ic energy, $438,399,000; value of products, $507,389,000 j va lue added by man· ufacture, $68,990,000, Soap F actor ies.-Number of establish ments, 282; wage earners employed , 14,633; pa y roll of wage ear nel'S, $18,995,000; cost of materia ls, f uel, and purch ased electric energy, $180,353,000 ; value of products, $310,192,000; va lue a dded by ma nufact ure, $129,839,000. Oleomar gari ne (marga r ine) Factories.-Nu m· bel' of establishmen ts, 41; wage earners employed, 1534· pav roll of wage carMI'S, $2,264,000; cost of m~teri'als, fuel, and pu rchased electric energy, $30,890,000; value of products, $46,522 ,000; val ue added by manufacture, $15,632,000, Cordage and Twi ne F actories.-Number of establishments, 123; wage ear ners employed, 14,489; pay roll of wage earner s, $12,834,000; cost of materials, fuel, and purchased electric energy $54,573,000; value added by manufacture, $36,882,000. VA I,UE ADDF:D BY MANUFACTURE

The fo r egoing statement shows that with the raw materials imported from t he Philippines and

PHILIPPINES other countries or obtained from domestic sources, manufuctured products with values very much above the original cost of the raw materials used, have been produced for both the domestic and fOl"cign markets of the United States. This can be seen from the expression "value added by manufacture." Those amounts never went back to the original sources of the raw materials, but they benefited directly the United Statos. These industries, besides, provided work for thousands of American laborers, nnd benefited other business entcl'pr'ises, such a s power plants, importers, and dealers, transportation companies, banking and other financial institutions, and investors. From the point of view of the g reatest good received, it could even be said that more people arc being benefited in the United States by the free trade than in the Philippines. Turning now to the Philippine market, we find that the American gooaS control more than one-half of the import trade. Tn \935, they accounted for 64 per cent of the total import tl'3de thus leaving only 36 per cent to be divided beh,ween Japan, Great Britain, China, Germany, British East Indies, and other countries. The Philippines is today the most important fOI'eign market of th United States for cigarettes, dairy pI'oducts, especially condensed milk and evaporated milk, rubber manufactures along the line of automobile tires and others, galvanized iron sheets, wires and wire nai1s, ex plosives and fuses, automobile parts and accessories, sewing machines, cotton threads, and others. The Islands is also an important leading consumer of American cotton goods, silk goods, fish products, fruits and nuts, gasoline and illuminating oil, iron and steel products, passenger automobiles, electrical machinery and appliances, books, pictures and o1'1)el' printcd matter, chemicals, drugs, dyes and medicines, and agricultural and mining machineries. U. S. DOMINATES IMPORTS

It will be seen that out of 37 leading imports of the Philippines from the United States, the American portion is below 50 pel' ccnt in only 9 items and they are cerea ls and manufactures of, except wheat flour and rice, encao and manufactures of, cotton goods, earths and clav and manufacture of glass nnd glassware, silk go~ds, spil'its, wines and liquors, vegetables, and wheat flour. Of these imports, the most impol'tnnt of course are cotton goods, silk goods, and wheat flour. American cotton and silk goods are meeting a stiff competition offered by ~i milal' Japanese goods, in spite of the tariff

189

waiL Favored by ;\ depreciated currency, the yen being only about 2/ 3 of what it used to be, and perhaps by increasing Japanese efficiency in manufacturing, low cost of labor, nearness to the Philippines, and other factors, Japan has been able to surmoun t the Philippine tariff wall and to undersell American, British and other goods in the Philippines particularly in textiles. Cotton goods al'e the most important imports of the Philippines, and fOI·tunately fOI' the American trade a gentlemen's agreement has been entered into between the United States and Japan wher eby the two countries are given each a l'easonable quota in the import trade; otherwise the United States might entirely lose her hold on the local COttOIl goods market. As regards wheat flour, Australia and Canada are taking a respectable portion of the tl'Ude. Except these few isolated cases, however, t he United States still dominates the Philippine market for imported merchandise, and will continue to so dominate as long as the free trade lasts. It is, therefore, submitted that the free trade, in spite of whatever defects it might have, is still working out as it: was originally conceived; namely, to place the vast American market within the reach of the Philippines and at the same time to enable the United States to obtain cheap raw materials from a territory undel' her control. This trade ar~ rangement may not be made permanent, especiall~' aiter the severance of po!:tical ties nine years hence, but it could be made the basis for a trade reciprocity between the United States and the Philippines. The following statistics wil! show the control of the United States over different lines of imports into the country: VH[L1PP[NE IMPORTS IN 19)5 Torl l I'./.. . j "'.,e~obil< and .. e,o, If<><h •• nd

"I'd ..... ............. " , .

r.m cr. n<'~' /"',.'"

U. S. Sb. "

1'8.).10.680 M.6j5.3&.1 (91%) "' ... ,emobi[, ,i,•• ,nd ocb" ,iff'., ., . . ..... . .. . . 1.OSl,0}4 1,0-17.161 (9S7(,; C<'<lI, acd m""./"",ul'd cr. "«P' ,,'1>< .. nou, ,,,d ri« ... . .. .. . ........... . ,,' .. " .. 1,187.06~ Cb ... ical., d""., d,.<s, ,00 m<dkin ... . j,I~.6}6 Cocoe .nd ""n."'Mn "'. .. . . . 1.01O.9}4 Co,,""~ .

...... , .. . . . . . . . . .

E.. cb. ,,><1 nun.h"u, .. 0/ .. . ' ..... .. EI.-cO'iuJ mxhin<'r, 'ppu ..., . .,,4 .",,[i ......

~;:~Ji~~~.~~IS.

F",ilS and D.O' .. .. ..

.... :.. ,.::::::'

GII ...<><I,I ..."·.,,,.. . .. . . . . ... . H.I<.nd "ps" .. .. ,. " . .. ...... .. Iron • ..., .... I ... ~.u..,'u"'., u«p. m•• hin«r

t!:~~~.t':~':J=:;.. .,{. .' M, ...... d

"'''',prod'''' .. ...

~:c~~or;:~·'''··

N.pb'h ... . K...«"< .. .. . Lut>ri ' '''n8 oil.

.. .. .

)0,)99.&41

867.)n ~.lO'/,)3<S

l,721,670 1.620.191 1.645.015 1,»1.1069 149.~

U.0I9.1)4 8,111,705

1.117,)81 }.lS)'o99

6.151.70 4.0n,6IS 6.668.161

l.9';0,101 l . ll a .~9

190

TH E COMMERCIAL & INDUSTRI AL MANUAL

POI.". pi,m<n" •• nd nm;.b ...

;;r.,' :.J u~~'r:~~:~:::::::::::::: ............. . p.,fum..-' ami III ,oil.. """at.,i""•.......

Rubber and ",.nWac,,,,.. of, <>0:1" .i..... Si lk

,00.1 •..

So,,,, ,, __ ............ . ..•.•...••.•.• .•...••. Sl'" i", ""0<0. u.d liq ........

1,)01,18) 4.1~.H~ 1,17S.~)9

1.\19,074 I,H6.4S0 ~MI. OOO

719,(0)

870,&U

S",cb ..•..••..•........... •.•...... .. .• Su,., ..d moJ ...... Toh'C'(I' "'<>due ... .

6H.m lOS.611 ?,SIlOS}!'

))8.OC))

(W¥o)

}O).I97

~%)

Mn.171 (95%)

.... ~".hl ................ .. ........ .. .. . .... .

1.17~,4n

IS'5.~SO

Wh", 0""... . ...................... . Wood . J><! m."uf.<lw., of.. Wooll;1l p>d •.......... .. ... . ..• •..

S,7I1.1~

1,4"4.690

8U .294

.., , ~

11}.6))

{4;%1 (01%1 (n%) 17).$1)5 (14%)

MOVE TO CUT TRANSITION SUPPORTED ' Uncertainty In Future Economic Relations Between The United States And The Philippines Prompts President Qu ezon To Ask For Shorter Period; Farm Interests Rally To New Plank. H E MOVE in t he U nit ed States to shOlten ·the t r ansition per iod of t he Commonwealt h government and free the I slands as soon as possi ble is gaini ng staunch supporters not only in the United States but also in the Philippines. President Manuel L. Quezon's action in asking the administr ation for advancement of th e date of independence surprised the country as it was understood that he would not attempt to take such a move when he left the P hilippines. The uncertainty regardi ng the fut ure economic status of the Islands prom pted President Quezon in asking for immediate independenc:! accor di ng to Carlos P. Romulo.

WHATEVER may have.. been the immediate cause that prompted Presiden't Quezon in changin~ his stand as regards the inde~endence question, it cannot be denied that pressure .has been brought to bear on this attitude by both the farm interests in Amedc'l and the immediate independence advocate!> in the Islands. Farm and labor interests in the United States al·e the ones who are loudest in their clamor to free the Islands immediately so they can get ri<1 of the competition tilf P hilippine products entering the American market s free and also of cheap Filipino labor. T his sentiment is made voca l i l l Congress by representatives from the agricultural areas, esp!X!iall y hom the beel sugar producing sta tes, whose re-election to Congress depends on how much they have served thc interests back home. That is why congressional support to the immediate independence move immediately spr a ng up whcn President Quezon suggested the idea . On the other hand, the champions of immed iate independence in the Islands received with enthusiasm the news that President Quezon has asked the adminis tration to shorten the transition period. Although many of these advocates demand immediate freedom l·egardless of the consequences, .8/1

nERSAft"'SO nONQ' ,..,,,

economic and otherwise, there are those who minimize the economic hardships t hat may come with the ultimate withdrawal of American sovereignty and the privileges that go with it-by pointing out OthCl' possible markets for Philippine products. Japan is pointcd out by some as a potential market for P hi lippine products in view of its dense population and of its being a highly industrialized country. rt I·anks today as the second best consumer of Philippine exports. A comparative survey, however, of the .share of the principal exporters of P hilil)pine products shows that Japan's share of the Islands' exports is still insignificant compared with that of t he United States. Over 80 pel' cent of the total ship· ments abroad go to the United States. Even if Japan will illcl·ease tremendously It....; imports from the I slands, it is held doubtful wheth· er P hilippine products can compete in t he world mar ket without t he preferential treatment t hey are now getting in t he American market. The United States is still the best and practically t he sole market for P hil ippine products. While commercial intercourse wi th ' the United States has always resulted in a bala nce of trade i n favor of Hie I slands, that with J apan has resulted in a tnHle balance in favol' of t hat countr y. Statis-

PHILIPPINES tics reveal that if it WCfe not for the big balance of trade with the United States, Philippines will be losing in its annual trade. In- 1933, fOR' cxn18ple, expo:'ts to the United Stutes amounted to 1'182,626,053 wnile imports from that country amounted to ]'87,080,813, showing a trade balance in favor of the Islands in the value of P95,545,240. Exports to Japan, however, in that ~ame year amounted to only "5,921,782 while imports from that countl'y amounted to 1>19,190,666, or a trade balance of P13,268,884 in favor of Japan. Exports to Chinn were valued at 1'1,684,343 and im]lorts wcre valued at 1'10,292,090, or a trade balance of 1>8,607,747 in favol' of China. Figurcs Iol' 193,1 places Philippine exports to the United States at 1'183,687,187 und imports at "108,751,356, Export\.to Japar, on t he other hand, were valued at only P81~21,602 whilc imports were worth f'20,69 ~,548, F.xPOl't!> to China werc worth P2,175,159 while imports were valued at 1'5,879,2 14, Other Fur Eastern countric which have an active tmde with the Philippines and with whic::h the Is~ lands have an unfavomble tmde balance are Dutch East lndies, British EJH;t fncli es.\Fnmch East lndies and Jallnnese.Chirra, Trude with the United Stutes, however , has be",n to a huge extent beneficial to the Islands. While exports to America dUl'ing Ithe last 7 ~'ears lUlve exceeded 80 pel' cent of the total exports abroad impol路ts have only exceeded 60 pel' cent, The highesb percentage-8~,,_of exports to the United States was l'egistel'ed in 19:32 when the highest percentage of imllOl'tS-65%_was also first attained, The lowest percentage of exports-13';' -under the American regimc was I'cco]'dcd in 1900 when imports from thc United States l'elH'csenteri ~l% of the toted imports of the Islands, Fo]' over thrcc decades of Philippine~Amel'ican trude, the proportion of exports to imports of the Philippines has been about two to one, Thus, in 1899, exports totaled P7,870,510 and imports 112,706,_ 112, In 1905 exports were valued at P29,680,814 and impol路ts 1111,179,892, In 1911 the proportion Was 1139,8'15,25'1 to 1'38,313,974, resulting in the !<mallest trade balance since U,S, P.J, trade rela. tions were established, In 1911 the figures werc (1126,468,717 to 1)75,24 1,295; in 1923 11170,084,046 to (lJOO,705,070: and in 1929, nil time high in exports and imports of P248,930.9.16 r.ncl PI85,185,917, respectivcly, were established,

191

It can be gleaned fl'om the above figures, there. fore, that the United States is practically the only outlet for Philippine products, It makes a profitable market in the world due to its vast territory. dense population, its high purchasing power and its being ma inly an industl'ial and manufacturing country, 1Iost of the t l'opical pl'oducts grown here cannot possibly be grown in abundant quantity in the United States, if at all. An industrial country like the United States, therefol'e, will always need raw materials from a tropical country like the Phil. ippines. It is being pointed out that the beet sugar producing states in the United States could pro. duee will not be enough to s upply the growing needs of the American sugal' bowl. This leaves, however, to the Philippines the problem of meeting the keen competition being offercd by many of the countries producing sugar and other tr opical products. It is held doubtful whether the Philippines can s urvive this competition once she is cut off from America and all economic privi leges are withdrawn, More than three declldc3 of association with America ha s raised the slandard of living in the Philippines to such a degrC<! that it would seem s uicidal for the Islands to j!O back to the Eastel'lI standard of living once the ecollomic paltnership with America is tc,'lllllluted , The standard of living here is the highest in the Orient, Filipino laborers are better pai d than are eithel' the Chinese 01' Japanese. The lo\\' cost of production of the other Oriental countl'ies due to cheap labor is the thing which makes it tough fo!' Philippine industl'y to compete in the wol'ld market, Thus, it is of intcrest to note today thllb while leaders of business lind industry in the Philip!)ines ill'l"! vigorously opposing any move to shol-ten the transition }leriocl of thc commonwealth, the advocates of immediate and absolute freedom arc renewing their demands for the earliest IlossibJe date of independence, And this contl'oven,ial su bject pops up again at a time when the wodd is characterized bv economic warfare civil strifes and international t~mplications which :llacle the situation ominous,

SPANISH CIV IL WAR AFF'ECTS P. 1. DESPITE the dista nce bctwecn thc Philippines and Spain, the fOl'mer has suffered a loss of P2.500,OOO in trade as 1\ result of the S,>anish Civil Wal', figm'es reveal. It is estimated th:l t befol'e

192 ~

T HE COMMERCIAL & INDUSTRIAL MANUAL _ ___----=-:=-:::===--=--===c:.:.:::..:==,__ .

the civil war is over, the cost total loss to the Islands will have mounted to $4,500,000. Last year's total overseas trade with Spain totaled " 4,692,745, of which " 4,191,551 was exports and 1'501 ,194 imports. During the fi l'st five mont hs of the year overseas trade t otn led only to "197,769 , of which P197,069 was imports and P700 exports, ~s agai nst P2,650 :397. of which " 280,221 was exports and 1'270,176 imports, for the same period last year , snowing a n unbelievable drop of about 93 PPr cent ! It is estimated that total t rade with Spain will not amount to P300,OOO, as against "4 ,000,000 to " 5,000,000 ycal'i y before the civil war. l ' he tobacco industry of the Philippines is the worst hit by the civil wal' and today it is heed with the worst cl'isis it has evel' met. The floul'ishing exports of lea tobacco to Spain which took more tha n 85 pCI' cent of t he total local production. has totally vanished th is yea r. The Philippines has not sol d a single c,\ntavo of leaf tobacco thi s year to Spain whereas )ast year, before the civil wa r engulfed the Penin s~la , the leaf tobacco exports totaled P3,169,303. \l'hat sum is gone and perhaps no ex ports can be made to Spain for the

rest of the year. Spain was the principal buyer of Philippine leaf tobacco. S I)anish firms strongly established in the Philippines have made popwur local leuf tobacco in Spain and foJ' lllany yeal'S the hade flourished. Today these firm s do not know oi any W.1Y of r eestablishing trude, as iong as the present status in Spain remains. Leaf tobacco is exported to counLl'ies such as Korea, Japan and France but in 1936 they took only about 15 pel' cent of the total of N,G14,920. As exports of leaf tobacco constitute about 40 pel' cent of all tobacco exports, the Spanish war has left a deep gash in the local industry, and if the Spani sh market is not reestablished the tobacco industl'y cannot long sU l'vive, it was explained. For the first five months of the year leaf tobacco exports dropped to 1)1,551,732 from 1)2,380,632 for the same period in 1936, showing a s harp fall of about 35 pel' cent. Of the total of 8,445,957 kilos of leaf tobacco exported during the first six months of the year, not a kilo went to Spain. Gibl'a ltal' took 7,080 kilos and Ital y which did not import before, took 3,806,245 kilos. But the Spanish t rade is not replaced yet.

PRBPARING TIlB Rl e 8 FI8LOi

PHILIPPINES The It'of tobacco industry will simply have to

look for another market because even if civil war in Spain ends this year, the reconstruction period will last iong and little attention will be paid to Philippine leaf tobacco in the meantime. Spanish delicacies long familiar on Filipino tables can no longer be had or can be had only at

fantastic costs. WAR LOSSES

Nations involved in a war arc not thn only countries that suffel', A war in Spain, for instance, can bring ncute financ ial suffering to a F ilipino tobacco grower in the Cngayan valley, By this week no such acute suffering had been produced

by the current Spanish conflict, because Filipino tobacco has markets outside of Spain. But customs figures !ihow that Spanial'ds WCI'C killing th~ir Philippine trade, as well as each other. Last year the Philippines did a total business of 1'4,692,745 with Spain, of which P4,191,551 were exports. But during the first five month of this year, the total Philippine·Spanish trade amounted to PI87,769, of which only P700 was in exports. Hardest hit single Philippine product was leaf tOb,eo. S I NO·J "I'ANESE I "IC!DENT

The other undeclared war of ' the year, the Sino.Japanese outbreak in North China, has not yet taken a toll of Philippine exports. But if Pres· ident Roosevelt should declare that a state of war exists in North China, it is likely that Philippine exports to both China and J apan would be sharply curtailed. How serious this would be is indicatea by the fact that last year the Philippines sen t Pl6,786,272 worth of goods to Japan, Pl ,974,838 worth to China. OVl:RSEAS

TRADE

SIX

MONTHS

SHOWS

1937 • THE Philippines enjoyed a favorable increase in her overseas trade during the first six months of this year as compared to the trade during the snme period in 1936, according to commerce bureau report.<;. Duri.ng the first half of tho:! year under revic.w, the total overseas tmde was 1'276,375,524, ns against 1'262,364,123.00 for the same period, showing an increase of P14,021,401, 01' 5.3 pel' cent. The increase in exports during t he same period was from P164,482,923 in 1936 to 1'167,747,311 this year, showing a 2-per cent increase. Great-el' perINCREASE IN

' ,\OVUtT I !Ln (e U !;), . \ l1C UST l~. 1!)3 ,

193

centage of increase was shown in import according to the same report. Total imports during the first half of the cun'ent year was PI08,628,213 as com. pared to 1)97,871,200 for the same pcriod in 1936, or about 10 pel' cent. However, the islands had a favorable trade balance of P59,119,098 as against P66,611,723 for the same period in 1936. Cotton cloth imports showed an increa se hOffi P8,572,946 to 1'9,380,164. There was a drop in the iron and steel goods trade as shown in the report. During the period under review the total iron and steel imports was valued only at 1'11,2'19,337 as against Pll,469,059 of last year. Automobilef; and trucks, vep,'et.able fiber~ . machinery and parts, unprinted paper and tobacco products show slight increases during the same period. Abaca exports increased considerabl y. The report shows that the value of abaca exports increased from 1'15,lfl9,027 in 1936 to P25, 168,231 during the same period this year, or an increase of G per cent. The same rise was also noted in the coconut oil exports. The total oil export rose fl'om Pl1 ,506,92(j in 1936 to PI9,077,186 in 1937, 01' 63 PCI' cent. But sugar, copra and tobacco indicated a drop, especially with regard to tobacco leaf where its chief market, Spain, is practically shut up. Other exports showed substantial increa ses during the period under review, the report indicated. The bulk of our trade goes to the United States, the report shows. Of the total oversea s trade of the Philippines, PI99,782,80S went to the United States, or 72 per cent of the grand totai. Exports to America totalled P135,966,468, while our imports to that country was P63,816,340 or a favorable balance of trade of P72,150,128. During the same period in 1936, the total trade with the United States was P197,072,930 as against P199,782,808 for this year. Trade with other countries, notably Japan, showed a healthy sign of increase accordin!! to the reports. SHIPMENTS FROM DAVAO LOWERED

The shipments of native products from the por t of Dnvao duri ng the month of Junc showed a slight decline as compared with the high record of May and previous months, according to a recent report to the Director of Commerce of Victoria Estual', provincial commercial agent for Davao.

194

THE COMMERCIAL & INDUSTRIAL MANUAL

The total exports in June amounted to Pl,558,299.10 as against 1'1,695,665.07 for May, or a decrease of $137,365.83 representing over 7 per cent. RA~:IE FIBER

A new export product is being developed in that port according to the report. Ramie a fiber for )'a1'n and cloth now much in demand in the United States and J UI)Un is being grown by the Japanese in Davao and in recent months has steadily risen as an export product of that southem city. The total export of ramie fiber in June amounted to 41.5 tons valued at 1'6,085. H emp constituted the bulk of exports. A total of 1'1,468,328.50 worth of hemp was sh ipped from the port in June: this year, as against 1)1,202,915.80 in May 01' an increase of l'265,412.70, representing over 11 pel' cent. Hemp exports went mostly to Jar~Il, 1.J nited State!', Great Britain, Germany, and Denmark, while logs, ramie and hemp sheat and other sign ificant items mostly went to Japan. Other native pl'oductl\ shipped from the port in June this year were as follows: hemp, 3,960,032 kilos valued at PI ,468,328.50; logs, 5,317,670 kilos

valued at P81,900.00; rnmie 41,585.5 kilos valued at P6,085; hemp sheat, 15,000 kilos valued at Pl,OOO; desiccated coconut, 2,870 kilos valued at 1)3,720.00; sisa l hemp 1,530 kilos valued at 1'240.00, lumber. 542 kilos valued at N8.60; gramophones 68 kilos valued at P25,OO; and miscellaneous items weighiny 302 kilos valued at 1'200.00. PH ILIPPINE PRODUCTS UNKNOWN I N JAPAN

Outside oi hemp and lumber, other Philippine products are virtually unknown in Japan, according to Stewart Tait, prominent showman, wh.) uI'l'i\'ed recently from a six months sojour n in China. Mr. Tait suggests that there should be m路)}'e publicity given local products in Japan where hl believes there is a big mad,et for them JAPA:"oJF.SE GA I NS IN P. L

RETAIL TRADE

Japanese gains against Chinese in Philippine retail merchandising aided Japan in obtaining a larger share of the islands' total import trade in 1935. The United States Department of Commerce in a current analysis of Philippine commerce estimated that in 1935 Japanese did nearly 35 per

PHILIPPINES cent of the retail trade. In 1933, J apanese shops did 26 per cent of the business, Chinese 40 !leI' cent. whereas in 1932, the percentages were 20 and 50 pCI' cent. respectively. Japan's capacity to sell hel' products 1It all stages down to the ultimate consume l' <!nabled her to capture 1'1.23 per cent of the Philippines' total import t r ade in 1935 a s compUl'cd with 12.4 pCl' cent in the previous yea, .. DEVELOPMENT

Of'

FORMOS,\

PUSHED

Officials of the Formosan government a nnounced that the Formosa Development Company bas decided to spend Yen 1,000,000,000 on a IO-year plan fOl' the industrial development of the island, which China ceded to Japan after the Sino-Japanese wal' of .1894-1895, r eports the Associated Press from Tnihoku. FOI'mOSD is one of the most fertile ar"as in the Far East. Immediate operation of the la-year plan wiil be based on n perfect understanding between Governor-General Kobayashi and Kyokei Kato, president of Formosan Development, There is keen and widespread interest in the plan, a nd also in the progl'am of the South Seas Development Company,

195

in connection with Japan's southward economic expansion, First-period enterprises in the lO-year plan include rDW cotton cultivation, colonial development a nd industrial emigration, These entcl'pl'ises an! expected to require for the fir st yeal' about Y4,500,000, which will be supplied by the company. Afte,路 this year, the company will raise money by cailing in unpaid capitalization or issuing debentures. The company has authority to issue debentures to the extent of 10 times its capitalization, Later, the company will develop plantations of cinchona and cacao trees and medicinal herbs. Formosa Development also has decided to found a Formosa Raw Cotton Company with a capital of Y3,000,000, making it a subsidiary, Its factory will be bu ilt at Ka i, E ventual object of the cotton company i~ to raise 100,000,000 kin of cotton a yea r on a plantation covering 100,000 chobu, Thi~ amount i~ expected to be raised within 10 years, Total expendi tu res will be about Y30,000,000 , The fir~t year's cotton crop is estimated at about 6,000.000 kin.

PI"LIPPIN~ GIlSBltAL H OSPI T ,\I. -M"NIL\

THE COMMERCIAL & INDUSTRIAL MANUAL

196

INDUSTRIES PLANNED INDUSTRlALIZA TION* Prime Necessi ties Co ul d be Produced

the Philippi nes

HE ESTABLISHMENT of a stable national economy is the goal of the economic policy of the Government. If the Philippines is contented with being essentinlly an agricultural coun路 try, this goal is quite difficult of a ttuinment. An agricultul'al country confines its activo ities chiefl~' to the production of raw materials which arc destined to feed the factories of highly industrialized countries, ami because of this f act we are always subject to

the vicissitudes of change in the indl/str ial development of those countries that use our products. 1拢 the demand fol' our agl'iculturaJ products is decreased because of the introduction of sub1<titutes, we have to readjust our agriculture if we can not find other markets to absorb our products. The unstable nature of our national economy is best demonstrated at present when we see that our IJrincipal exports, hich are mostly agricultural pr(,ducts, are being threatened in the American mar ket, l'he chief buyer of ou' products. THE PHILIPPI NES is at present importing large q'Jantities of articles of prime necessities that could be produced in the. country. We have the necessary l'aw materials a 1<1 the labor supply to estabJi!'ih the industries that produce these imported articles. It is, therefore, hi~hJy advisable to supplement our llgriculture with ccrtain industr ies in which we enjoy comparative competence. As an important step in the realization of a stable national economy, the present administration created the National Economic Council thru the passage of Commonwealth Act No.2, a body that is entrusted with the important funct ions of advising the Government on economic and financial questions, and of formulat ing an etlonomic program based on national independence. The Government is committed to the industrialization of the country and the National Economic Council has already enuncia ted a policy to that effect. I n the consideration of industrial program, the National Economic Council gives preference to the establishment of those industJ'ies that cater to the immediate needs of the people, especially those that produce necessities lil\C! fond and clothing. It is the plan of the Council that these industries should be started first, because t hey do not need much capital a nd at the same time the market for their products, being necessities, is more or less assu red. Experiments on the commercial possibilities of some of the -811 A DE 1...11 .... u s-Str路'j"rl/ 0/ K... "o",i. C.." ..dl

p",~nc(.

Ch"i,,,,,, ... N"'io,,aI

products to be produced locally have alrcady been undertaken, and the next important step to be taken is the establishment of these industries on a lar ge scale. T he most important industries now being highly considered by the Council to be set up a re t he meat packing industry, dair y indust ry, canning industry, the f ish industry and development of f isheries and t he manufacture of cotton yarn. Other industries like the manufacture of glass and clay products, sack making from pulp and paper, the industrialization of coconut pr oducts, and the manufacture of tanning extracts and leather could be undertaken, but their immediate establishment is not considered as essential as the food and clothing industries, and they: can afford to wait until the resources of the Government are sufficient to finance them. The total amount of capital needed by these industries would not exceed one and a half million pesos, an amount that could be easily set aside from the public treasury which is in very sound condition. The significance of these industries that are recommended to be started immediately will be easily seen when we consider the fact that in 1936 we imported meat products amounting to P2,887,070. Dairy products were imported to the a mount of P88,137,284 fo r 1936; while canned fruits and vegetables were impor ted to the amount of Pl,034,2;m for the same year. It il; of great nationa l interp.拢t to know that the importation of milk and milk products have never gone below P5,000,OOO for the

PH'TTJPP[NP" last ten years. Fi sh in various forms is impol路ted in large amounts every year, and in 1936 we imported P3,058,815 worth of fish . Cotton, which is th!! largest single item of our importation, amounted to P30,535,257 in 1936. The total importation of cotton yarn alone which we propose to produce locally amounted to P1,'186,923 in 1936. T his commodity is in great demand in the weaving of cloth an important industl路y. The National Development Company has been remodelled to act as the chief agency in the promotion of new industries in the Philippines. Under an ablc management and with its large capital. it will prove to be an important factor in the industrializntion of many of our products. It will nct as the parent corporation of the various corporations that will be o'rfanized, sUpplying the expert advice and, to a certain extent, the capital to start them. The industrialization of the country cannot be successfull y under taken u nless cheap power is aV!l.i\able. ,The experiences of oUier highly industrialized countries all point to this fact. T he ~nprecedentcd industrial development in Japan today is to be at-

197

tl'ibuted chiefly to the ample supply of cheap power. The same is true with many countries of Europe and of the United States. To supply cheap power to our industries, the National Economic Council recommended the study and immediate establishment of hydro-electr ic plants in stl'ategie I)oi nts of the Philippines. P reliminary surveys of water-power sources in many places indicate the possibiiity of developing cheap water power. The power s ites of the Angat River in Bulacan, the Lenatin River in Rizal, and the Agus Kanan River in Tayabas could be developed immediately to provide the neeessary power for industries that may be established around these regions. Commonwealth Act No. 120, creating the National P ower Corporation to take charge of the development of hydro-electric power in the Philippines, was passed by the National Assembly. Already, an appropriation of 1'250.000 has been provided to begin the preliminary work. This corporation is to be financed with a bond issue of P20,OOO,OOO, and when it has fulfilled the purposes for which it was created, eheap power will be available to industries, large and small.

NATIVE CoCoNUT路On. F"crORy-

P"OSANJAN, LAc.UNA

THE COMMERCIAL & IN DUSTRIAL MANUAL

198

REHABILITATION OF PHILIPPINE INDUSTRIES' HE CONSOLIOAT rON of government and Pl'iHl.te initiative to wOl'k out plans for rehabilitating

Philippine in'dustl'ies is being carefully calTic!! out.

'I'his move is the effect of the pro-

longed pnralizatioll of t rade, particularly foreign, dUrill'g the years of depression affecting OUI' princi lmi products as sugar, copra, cocomlt oil, tobacco. hemp and other crops.

working out. means of lowering costs of production while a continuOlls fight is being wag2d

iii the United States and other Coulltl'ies for the improvement of forc ign market;;,

lhe

on~

111-

dustl'ililists and farmel's arc awakclriing to the necessity of developing by-products and The government on

hand has committed itself to thc lcadership of a long ]ll'ogl'am of cro禄 and industl'ial diversi-

fication as 11 result of which six new measurcs passed by Lbe national asscmbly nn~1 npPl'ovcd by the Pl'csident wc)'c designed to give a "new denl" for the Filipino flll'mcr b~' casing up credit, marketing facilities and oth21' incentives fOl' lo('al industrialists, IN ITIAL STEPS along these lines have been taken by the BUI'cat\.of Commel'ce in establishing the tmding centc)' and exchange in Manila and its like in the provinces, This movement received official sanction in a lin.... creating the governmentowned tmding center an~ produce exchange. A law, exempting froe' the payment of the merchant sales tax the sales made of farm products which do not involve actua physical transfer of commodities, is now in effect. Two laws, the Vel'zosa Tobacco act and the Lavidez Coconut warehouse act, authorizes the secre tary of agriculture and commerce, the Philippine National Bank and the National Development company to establish, operate and maintain warehouse wherein tobacco and copra can be deposited at I'easonable rates of charge. According to thcse two acts a farmer may deposit his crop in any of stich warehouses while waiting for better prices and will receive quedans and reccipts for the pI'oducts so deposited, Since the quedans issucd to him arc ncft'otiable instruments, the farmer may obtain loans on them from the National Bank which has recently established new policies as rcgards farm credit facilities. The producer may finally dispose of his copra or tobacco, a!" the case may be, when prices are satisfactory t" him. A VISIble cffect of the establishment of war ehou ses is the curbing of the practice of middlemen of making excessive profits which abso rbs a huge portion of the procecds from the products. On the part of the farmers increased efforts are being exerted in coconut producing regions to *8" ,I. B. S",L\' OS \

remedy the plight of copra and allied pl'oduc>ts. Abaca planter s, too, al'e pooling their resources to put up a capital of P6,000,000 for a huge cot路po路 ration nation-wide in scope, It is the a inl of these business men to put abaca buck to its prestige two decades ago, Three copra centrals, all in the province of Tayabas, have already been orga nized to promote the coconut industry, Although still in their eal'iy stages they are operating satisfactorily and giving employment to a big number of people. The latest of these concerns, the Blue Star Desiccated Coconut Corporation was organized a few nl0nths ago in barrio Lusacan, Tiaong, Tayabas at a capital of P500,000, It dcals in the manufacture of desiccated coconut, a product in g reat demand now abroad. This new compan~' was pr eceded by the Red V Coconut Products, Inc. in Lucena and the Cooperative Coconut Products in Tiaong. It is worthy of note tha,t the improvement of local prices of coconut products is due mainly to these incentives created in the Islands. The abaca scheme will involve the plan of acquiring 20,000 hectares of the best hemp_producing lands in abaca provinces as the nucleus of the corporation's pI'opcrty allowing each planter as incorporator, Prominent hemp buycrs and exporters have been mentioned as putting up initial operating capital for the projected corporation, Nor is the government interest confined to the old commodities of trade. A long range program for the promotion of new industries which have been the object of rcsearch and study by the government was revealed recently in a report made to the AmcriC3n hi~h

PHILIPPINES commi:;sioncr by Eulogio RodriguC!z, secretary of agriculture and commct'C!!. Definite industries WCI'C enumerated and even amounts which would be necessary to start them have been mentioned in the report. The projects and the capital nceded for each urc: manufacture of glass, P90,OOO; meat packing 1'300,000; manufacture of clay Ill'oducts, 1'110,000. The governmcmt for two yea l's has been continuously experi. menting on them out of the funds set aside under thu industl'ies nct. amounting 1'680,000. Sack making from hemp, mngucy and other fibcn; l'cquires un cst.imutcd cxp(!IlditUl'C of P300.000 while the growi ng of derris needs n capital of about 1).15,000. The growing of cinchona trees w ill be undcl'tuken immediately as " '15,000 is reported set llside out of the P250,QOO recently appropriated for reforestation. All of th se industrial projects arc declared to have been properly covered by acts passed by the assembly. The considerable deman~ fOI' bottles is due to the extensive manufacture of aerated watel路. The importation of bottles in 1933 a\nounted to P261,334 which was almost doubled in 193 with a total value of P419,847. The amount represents 3,500,000 split

199

bottles used in aerated water factories and 3,000,000 for breweries and distilleries. 1\-leat packing will also have a I路jch field in the Philippines if properly devcloped. The value of imported meat products during thc last 10 years period, 1924.34, was "45,801,916. In cu r ed ham alone the importation amounted to 678,483 kilos in 1933, with a value Jt496,23J, and 525,769 kilos worth P507 ,877 in 1934. The recent discovel'y of ham making without the usc of refrigeration, as announced by the college of agl'iculture at Los Banos, was declared as a step in the right direction and one which in due time will makc the country independent at least foJ' hams. The manufacture of clay pl'oducts is indicated as a profitable indu stl'y, especially in view of the public works bureau projects of establishing scwer system in the principal towns of the Islands. Assembly leaders believe that a Jlolicy similar to that followed in the manufacture of Cebu Portland cement should be adopted si nce the purpose will be primarily to supply the needs of the government in its sew1rage projects. The manufacture of cotton yarn is an industry which is believed very nccessal'y and suitable for

HXMP IN COUR$B OP M"NU .... crURX

THE CQVlVlERClAL & INDUST RIAL MANUA L

200

n tropical coun tl'Y like the Philippin es. Cotton cloth imports in 1933 were valued at P26,263,250 and in 1934, P31,242,920. Cotton yarn worth 1)1,044,156 was imported in 1934 for use in the cotton cloth weaving industry. III this connectio n the bureau of plant industry is conductin g an intensive campaign for the growing of cotton to secure a sufficient supply of floss for the manufac ture of yarn. Other minor industrie s which are listed by Secretary Rodrigue z in hi s report and which in his opinion should be developed include the manufac ture of canned goods and tin cans, establish ment of fishing industrie s and developm ent of fisheries, manufac ture of sodium carbonate and sodium bicarbonate, manufac ture of tanning extracts ana leather, industria lization of coconut products and improvem ent of copra and develonm ent of dairy industry, The recomme ndation h as been made that

these industrie s should be promoted by the National Developm ent Corpomti on, I n the walce of these vigorous interests on the part of the farmers to improve their lot and the encourag ement of the governme nt towards diversi_ fication of industrie s the country is looking forward with optimi,<;m towards the results of the trade conference between the United States and the Philip_ pines, Led by the sugar men a move is gaining favor in the United States and the Philippin es, Led by the momentu m to include in the delegatio n such elements as would aptly represer,t various industrie s in the Islands producing big export trade with that country, The idea is favorably indorsed in political circles due to the importan ce of the conferenc e and the far-reach ing effects upon the future of the Phil_ ippine products entering the American market,

GRO WTH OF BUSIN ESS' of business for 1937, no one HEN ASKED at the beginning of 1936 as to the prospects

unforesee n happenin gs, venture to predict that the the in!oming year, barring then prevailin g favorable the of growth further and ion continuat a witness should would seem to bore out state of business, Developm ents during first four months ade, levels being subupgr the on definitely are activities Business n, this predictio operation s, gl'eater Enlarged stantially better than at the sam.;> period a year ago. a widespre ad feelmanifest employed gainfully perf.ons of product ions, and an increase in the number future. e immediat the ing of confidenc e in States which greatly affected commerce with INDICA' l'IVE OF THE BUSINE SS GROWT H United country for some t wo months. T he merchanduring the first four months of this .year in the that of trade shown a comfortin g surplus numbe l' of new business corporati ons organized and dise balance favorably with last years'. Prices compares nts. wbich investme capital new in the considera ble increase ral crops continue at the same The Bureau of Commerc e registere d during the four- of most agricultu last year, and in some month period from J anuary to April of thc current encourag ing levels reached and internal reyear 210 n ew business corporati on with a total sub- cases at higher levels. Customs Gold mining activity . increased s only collection with venue compared as 46 P16,794,7 of sCl'iocci capital of ore was 84 n ew corporati ons with a total subscribe d capital gained more pace, and a large tonnage milled. Due to improved demand, both forcign and of P6,153,635 registere d during the first four in months of 1936. The total paid~up capital of the domestic, there has been a moderate expansion the manufac turing in dustries. The general im~ new corporati ons organized up to April this year provemen t in consume r income stimulate d r etail amounts to Pll,G29,0 81 as compal'ed with only trade, and sales have been greater, 1'2,623,432 for the same period last year. Foreign trade gained further strength, both For the first two months of the current year in;pol'ts and exports maintain ing a high level de~足 exports totalled P53,42B,64B, an increase of P6,109,plte the maritime s strike Oil the Pacific Coast of the 350 from that of last year which amountod to only

*81/ C OR s eL l O U " L", ..

""nA

P47,319,29B . .

PHILIPPINES Of the 20 principal export products, 14 regist.ered increases and only 4 recorded decreases. Sugo.r, our leading export, showed an increase of f) per cent over the January-February period of 1936: abaca, 18 per cent; coconut oil, 56 per cent; lumber and timber, 124 per cent; cordage, 72 per cent; muguey, 19 per cent; cuteh, 15 per cent; buntal fiber, 68 per cent molasses and syrup 336 per cent; pearl buttons, 11 per cent; hides and skins, 135 per cent; vegetable butter, 199 per cent and vegetable lard, .45 per cent. The other articles netted decreases. Copra, for instance, declined, 58 per cent; tobacco and its manufactures, 22 per cen';; embroideries,44 pCI' cent; copra meal, 27 pCI' cent; hats, 6 per cent; gums and resins, 17 per cent; and desiccated coconut, .16 per cent .. The export suga market ruled quiet as there was gcneral uncel't..'linty growi ng out of the proposed re-ennctment of t~ sugar processing tax by the United States Congress. Transactions were limited as buyers operated conservatively. Export prices declined to P7.51 in lHarch and 1'7.49 in April as compared with the average price of P8.51 in January. The prices for the first two months of

MODERN

ImTALLATION

201

1937, werc higher than those of 1936 so that altho there was a slight decline in the quantity of sugar shipped during January and February, this year as compared with the same period last year, there has been an increase in value. Domestic consumption sugar followed the same trend. Prices in January oscillated between P7.75 and P7.00. In the succeeding month, prices dcclined furth er to around P5.50 and 1)5.40 at the end of April. The decline in values is due mainly to the liberal supply of domestic consumption sugar aggravated by the competition of cheaper sugar like panocha and muscovado. Abaca exports to the United States as well as to Europe and Japan increased noticeably while prices fol' the fiber, especially for the better g rades, rose t o a higher level. One factor in the situation was the anticipation of higher freight rates which made exporters more active in making early shipments. Gmde F advanced from P20.75 in January to P24.75 in April, the highest price in seve~ years. fo.baca prices thi s year are above the level of 1936.

HEMP

MANUFACTURING

202

THE COMMERCIAL & INDUSTRIAL MANUAL

Scarcity of :..upply characterized the copra market, cllusing an advance in prices. Resecada reached the peak of P23.00 in January altho the price declined during the succeeding months. Monthly average prices for Resecada in Manila were P19.20 in February, P19.29 March and P17.27 in April. Demand for coconut oil in the United States was spotty, und limited only to small buyers. The price of coconut oil in the United States has lately been tracing a downward trend because of cheap offerings of competing oils such as palm and palm kernel oils from Europe. A high of 9 %. cents c. i. f. New York was reached in January but the price gradually dropped to 6 cents under the stress of competition from cheaper oils. The decision of the Federal Supreme Court upholding the constitutionality of the excise tax on Philippine coconut oil has augmented selling interest. Sellers started offering more freely as he decision become thus causing further recession in pr.{ces. Leaf tobacco prices made advances during the first quarter of 1937 ~ a rcsult of a relativ('l~' small harvest in the Cagayan Valley occasioned by the flood in that l'egion last December. Holders of leaf generally hold firm for better prices. The average sellers' price per quintal for the first quart-

er of 1937 was 1'13.13 as compared with PIO.55 for the first quarter of 1936 and PIL04 for the last quarter of 1936. Thus the average price for the first quarter of 1937 showed an increase of P2.68 per quintal ovel' the price for the same period last year. An uncel'tain factor in the t l'ade in Jeaf to. bacco is the unsettled political situntion in Spain which llo1'!na!ly gets the bulk of OUI' exports of tobucca leaf. A moderate improvement was made in the exports of Philippine cigal's to the United States.

The rice market opened quiet. Pi'ices remained steady at 1'4.90 to P4.95 for first class rna. can until the middle of March when the price began to !'ise. The upturn in values was mainly due t,) the exhaustion of the Saigon rice of the National Rice and Corn Corporati,jn, th~ hardening of prices of palay in the provinces, broader demand from the consuming centers and the gradually increasim: shi pments to the United States. Palay was active as buyers displayed keen interest. Big purchases hav'1 been made by the National Rice and Corn Corportion in its mle as stabilizer of the rice market. Local trading establishments generally enjoyed a good volume of sales during the first quarter.

EXP .... SIVE IXDlISTIlI .. I. ISST .. LL .. TlOI>'

PHILIPPINES

203

ADVANCEMENT OF GOVERNMENT FOSTERED SCIENCE WELDON JONES, Acting American High Commissioner in the Philippines, sounded warnings in con'ncctioll with the advancement of Government-fostered science in the country in a speech dclivcl'~d before the fourth convention of Philippine scientists on February 25. MI'. Jones also suggested the consideration of the immediate objective of scientific effort here as between the abduction of a machine civilization and modernized agricultural civilization. At the same convention, Dr. Manuel L. Roxas, technical advisor at Mulacafiung and chail'mUll of the National Research Coullcil, advocated the formulation of a plan of industrialization in the Philippines. He cnumcmtcd a few neglected fields in science in the country to aid in its economic deI'clopment, montioning the possibilities of manufacturing by-products fl'om ;:;ug.\1', coconut and abaca.

"I suggest that you considel· ver~' thoughtfully the immcdiate objective effort in the Philippines as Dutwecn the abduction 0 a machine civilization and un agl"iculturnl civilization. World events since the Napoleonic em have not proved that a machine civili:mtion is superior to an agl"icultul'al civilization. If the scientists of the Philippines could enable the farmers to produce the world's best and cheapest vegetnble oil materials the world's best and cheapest har d fibel·s, the world's best and chcupest bananas, the world's best and cheapest tobacco; if they can bring these t~opicnl islands to have the world's best dl'inking water; blot out cholern, typhoid, mnlaria; eradicate scabIes, intestinal pUI·asitcs, and leprosy; reduce tubercu losis to a minimum-hel·ein seems to me to lie the challenge l"lllhel· than in any hurried plan to put Filipinos to pulling levers in stuffy factories. The factory mllY mean luxury for some, it may mean quick and CIISY money, it may meun world uJ,>plause-but docs it necessnrily mean eventual nntional success and dul's not menn individual happiness? "Pcl'hnps what I am tl'ying to say is that ... t:iem::e !lhould develop Pl'opol·tionately on all ~l"onts.

The Scientific God of lhe Machine without an equal development of the social sciences-the sciences of mcn himself-seem to be IU·oducing some of the wOl'ld's most complex problems. After all the purpose of science is not the progress of the machine; nor the purpose of statecraft the progress of the nation pel" se. Both science and statecraft must have as t!leir aim the mcntal and physical comfort of mankind. Both science and government must aid in producing human beings who are physically fit, mentally alel·t and emotional stable. To such human beings we must give skill to the competent, cour age to the brave, and secure faithfulness to trusteeship. " Of course, I am taking 1\ long-run viewpoi:lI and I am thinking of future men and women rathel· than of future machines. "I think we well may add idleness to the above list. And we must rcmember that industrial idleness is pel·hups more vicious than the idleness that results from Ip-eat wealth. And these seem to be Nature's unpardonable sins. These things hllrt life. Apparently Nature cannot purdon them even if sne would." ..

INDUSTRIALIZA nON ' THE ANNOUNCEn INDUSTRIALIZATION or the Commonwenlth government calling fOI· the el'tnblishment of canning factory, cotton spinning plants, the lieveiopment of asbestos, iron and othel· minCl"ni deposits in the I!llanrls should r,ive very

serious thought for considCl·atioll before the governmcnt !=hollid atterrllt to launch itself into these numerous projects. In this ambitious progrnm of the government to develop and nationalize industries in the country, the cement company is always given as an example and excuse for this governmcnt to engage itself

204

THE COVlM'lRCIAL & INDUSTRIAL MANUAL

further in business in competition with private capital. But the other side of the question of the 50called success of the cement company has never been shown. The monopoly of this cement company over

the public construction projects of the government has never been given. This protection of the government given the cement firm requiring that all pUblic projects where cement is needed should use

the pl'oduct of the government-owned cement factory is the c..... use of the

SUCCE:SS

of the firm.

In view of

this protection, coupled with the tariff protection given it, the product of the cement factory can be sold at a profit. Without this government help, the factory would have gone to the rocks as other business enterprises of the government have. The time has arrived to consider if the government contemplated industrial plants can prod uce manufactured goods at a cost where it will be possible to realize profits in the face of stiff competition of similar products imported from abroad. Building up high tariff walls will give protection for the products of thes~ industrial plants in the domestic market. But will this not cause retaliation in countries where we now import these products? And will not this policy bring the prices up beyond the reach of the common masses?

The Philippines is an ugricultuml country, and it will be so for many, many years to come. To industrialize this country now }'equires serious thought and careful deliberation in ordel' to make it a success. It perhaps would be mOl'e advantageous to continue developing our present agricultural industries, producing raw products at a cost where they will be able to compete in the world markets and import manufactured goods for our needs bought at low process than to attempt to flood this country with locally manufactured goods sold at high pl'ices not within the reach of the great portion of our population. I t would be more in keeping with the best interests of the country and its people if such progr am of industrialization is ca1"l'ied out little by little as the need and circumstances dp路 mand. The source of the raw materials to supp! y such activities should be considered too. The time has come for the government to aid private capital to concentrate in developing our present agricultural industries which produce our export CJ"ops to a point where we can com])ete with similar crops of other countries in the markets abroad. This will bring more income to the govern-

BALATOC MII'lil'OO Co)lPANY INSTALLATION

PHILIPPINES mcnt. without throwing away millions of pesos ir.to

an ambitious program of lndustrianzation of doubtful success, The Philippine government gets little income to run i~ activities and it Clln it! afford to spend and lose so much money m mdustnal c}.1lcl"

imentation. It would pay OUI' government 拢01' t he officials

205

behind this plan of industrialization to give serious thought to these ambitions projects before they attempt to throw the government into reckless adventUre at this high-sounding project of industrialization. Success on making blue-prints and plans on office desks is very different from actual running of industries and business.

INDUSTRIAL POWER PROBLEM' UR GOVERNMENT is committed to a

program of indu stl'ial development.

To foster the

growth of those industries already establ ished and to undertake the promotion of new ones, which offer economic feasibility but in whic h private capital hesitates to venture, are tasks now being shouldered by the State. These t asks, it must be realized, are not self~imposed due

to poli tical eXpediency but nr e outgrowth of the circumstances in which the country has per~ force been placed. The complicated problems and innumerable difficulties in the way are now

and have for sometime been subjected to careful scrutiny and ana lysis by the keenest minds in the Gov路 ('rnment service. Private initiative is also actively participating in the campaign. INVOLVED in our prtPo!;ed industrialization are several factors, of which "ene has engrossed the attention of our technicians mOI'e than powerpower for indu str~" Quality and low production costs are mainly the reSlllts of the efficiency of modern machinery, which in turn depends upon cheap power. We must therefore pl'ovide this cheap power, Besides, the cheaper the power, the greater the number of industrial establishments which call afford to use it and thus broaden its field of economic usefulness, We have or can produce the raw materials necessary in many industries, However, we must also produce the r equisite basic chemicals which in turn require, together with the manufacturin g pl'ocesses involved, t he use of a plentiful supply of power in the form of electrical enel:gy, Thus, it is that the production of cheap electric power has become a key industry in the intensely industrialized countl'ies. And so we are now-engaged in prospecting for sources of power, The varied power needs of industl'y at the present time may be supplied by either steam plants, internal combustion engines, or hydro-electric plants, Sometimes one type of power may work out as the most economical fOl' a particular industry, some路 times anothcr a nd frequently a combination of, the different types may be determined as t he most eeo-

nomical. The choice of the most suitable types can be made only after consideration of t he general factors involved, viz., location, fue l costs, size of installat ion, reliability, availability of water power sites, manufacturing processes and the cost of pur chased power. However, a cursory examination of statistical data reveals the fact that t he radio of per capita emergency consumption to the per capita installation of power facilities are in general highel' in those countries where water power devel opments predominate, as in Norway, Switzerland and Canada. This fact suggests the need for the study and investigation of our own rel'!ources in this particular field, Preliminary investigations have already heen launched in this direction by differcnt Government entities, The National Power Corporation, a !H1blic corporation, has been especially entrusted with the wOl'k of conducting the development of our power resources. Inasmuch ns the production of powel' is all industry in itself and a business venture, we are at once confronted with complex economic problems in connection with water power development. Ordinarily, ns a wise business venture, capital inveslments in t his enterpri se must ultimately sell the power produced nt a cost below 01' equal to t hat at which it can be pur~hased and higher than that at which it' can be produced, in t he same manner that a local maDuftlcturer '~ sale price for his articles must be v

206

THE COMMERCIAL

set between the selling price of imported articles of the same quality and the cost of manufacture. It is, however, obvious that prevailing rates for power cannot be taken as our higher limit in our calculations, hut. rather the raise at whi ch our industries may be enabled to lower production costs, and thus to capture trade and th l'ive. The most economical development of a given wutel" power site can be determined by engineering, but ill any case we have to proceed with extreme caution, inasmuch as at this time assumptions have to be made with respect to the loads or probable energy requirements. The initial investment on a water power development is generally high so that wllile it may appear that fixed charges per kilowatt of installed capacity are favorable, the total amount of power actually utilized must absorb these fixed chal'ges and failure to utilize the full capacity will influence the cost 'Of delivered power unfavorably, It then appears tho. we must a lso conduct a careful exploration of the powel' market existing and in prospect to assure a much as possible the utilization of the available 0 tput and thus attain the calculated low cost pel' unit, The disposal of the lal'ge blocks of power that may be produced in the

INDUSTRIAL MANUAL immediate futUre may be accomplished either by furnishing present Government needs in conjunction with sale in te1'l'itories not yet served by pri_ vate companies or by sale to the established utilities owing franchises, As to whether or not we can in the latter case effect a substantial reduction in the cost of delivered power must be carefully studied and analyzed, Among the industries mentioned for possible development in the exploitation of our raw mate, rials arc coal and iron mining, paper and cotton mills, the weaving into finished products of OUI' various fibers, manufacture of soap, fertilizers and other nitrogenous products, glass making and production of certain basic chemicals, We arc also concerned with improvements in OUI' agriculture and home industries, At the same time we arc not ove)'looking the market possibilities offered by the present mining industry, sugar centra ls and various established trades, A possible combination of any of these industries with a water power project may promise success, where the power project alone with a n uncertain market may be inadvisable, Water powt\!' investigations in Mindanao must necessarily be conducted in conjunction with sUI'veys fol' pOS-

PARACAU-MA1><IIUt.AO DISTRICT MINING [NSTALL\TIOS

207

PHLLlPP[NES sible industries. In Luzon, the centers of population being within practicable electric transmission dislancc from the sites now beill~ investigated, hope is engendered that the results of the coordinated work of the different government agencies engaged in industrial research and investigations ,yill find conditions finally favorable for the early construction of our proposed Pl·Ojccts. The necessary ad-

justments in our future political and economic status are being always kept in view a s these must be considered among the deciding factors in our pres(;llt I>\anning. Dependence fo\' power requirements, in line with present world tendency, should be confined as much as possible to the resources at home, hence our interest in our water power or " white coni" as it is so aptly termed .

PROMOTIN G PHILIPPINE TRADE IN THE FAR EAST' S A GENERAL rule individual countries find the most advantageous opportunities for ex· t el'na l trade with their neighbors. T he influence of geographic propinqu ity in foreign tl'ade is an elemental fact known to all. While Canada is a member of the British Commonwealth

of Nations, yet she has been doing and actually does more business with the United States than with Great Br itain, largel y becau se of her proximity to the former. Our own commercial history shows that we are no exception to this fundamental f a ctor in foreign trane.

1J we remove the special consideration incident to our political ties with the sovereign country, Spain before a nd the United States today, it will be found that our trade with neighboring countries like China, J apan, the Dutch East Indies, French East In dies, ( Britis h India) and H ongkong constitute important portions of ou r external trade. Based on the latest available statistics for the year 1935, OUt trade with these countr ies were as follows: C......)

v.I.,

Cb'.... ...... ..

J'~ ••

IlInch Eo .. In;I" •.... F,c",b £.oJ, It>d i" .

Br,,,,b E..,,, I.diu .. H""lk""s· · Toul

I.,.r',

1',.

tAl

f'S.6O));17 118 H.ld.9-l9HU ).66}.16l 2 H

V.I..

li~I''f'

P l.J92.106 lo,il8.n9

Tor.) Tr.J:

P.. c,., V.I_, 1'.. C,'" .95 n.m.).) ' .00 ~

)),061.678

9 ."16

4.211.J7I

2.15

)l.lO9

.02

9OJ.I)1 l.l7B.}27 198 lS1.162 .11 l.l9l.0tl 1")8.17}.9l4 ll _ll f'15.l900S

S6).9Oi 4.278.6S9

1.14

S}O.696

~)7.1 0!

H 81~

1.746.18) f'S).568.119

.~ ,,~

Grouped into its main divisions, our foreign trade for the same year may be summarized as follows:

/_/", I'.I~.

v . S.

P..

c..,

E..,.", 1' .. /"

T.... )

1'.' Cr.,

1' .. /. .

f,.. J,

fI.. Cu'

• oJ i" Pm .. . •

'''''''. ""u,,,.I,,; •..

F.. F.. "

01.1...... _ ••• Lu,n ""m,,i.. n··

,,"II Ot h, ...

P260,)S),11I 71;!('l H .291.&oO 1) .10 l6.27l.))S 10 \I 7~S.i92 ~o us}.))! 1.0) ~L.81 0 .02 1lJ,37~ OJ )).126 Ol )l7.,,7 09 1.<2.1.0)) I 18 <,47U~ll I 2<

fll(III,-Il)$.7W 6) 96 "1S03:S.1!1 80

lS,673.66) U 61 17.)$j.l75 10 29 l.939.766 171 8UH OS .101.611

2.050.018 I IS

15.619.1)7 S 29 18.679.190 9 ~I

From the above figul'es, three outstanding facts stand out for considcrntion: (1) thut, except in the cases of our trade with Hongkong and Siam, the visible balance of our trade with our Fa\' Eastern neighbo':s is decidedly in theil' favor; (2)

Q UI' unfa vorable trade balances with Fa!' EastJ ern countries based on 1935 figures, are as follows: ii.

E¥","

CO" • ..,.

J.~.n·

Ch,n, . ... . ...... . Ou«h Ea .. 'oJ,,, . . B,'''' h Ea" tt>d i", .. . FlCnch £a .. Ind ,... T.... I ..

"H.l42.9-49.oo I'IO.7 IS.il9.oo I' 1.791.106.00 S.603.237.00 '.66'.161_00 )5"1 .1(;6000 l.liB.Sn.oo \lOO.1)2.00 1)0,696.00 ll.209.oo ")7.12£1.672.00

u.,.....

T"J. /Jol.t • • 1l.624.2.2000 ).SII,IlL .OO

) ,10II .1 5S.00 l,4 7!.nS.00 71».+87.00

f'1~.OOI . l84 .oo 1'23.119.)18.110

t hat des pite prefer ential treatment enjoyed by t he United States, an important part of our external trade is with the Far East; and (3) that if biJateral trade balance between the Philippines and her Far Eastern neig hbors are to be evened lip in the future, it will be mainly because of industriali· zation either in the P hilipines or in the other countries. In the case of Japan, the situation is brought about by the fact tha t we impol't large qUantities of manufactured products and coal, whi le our exports to her consisting of raw materials is limiter! by the fact thnt Japan has other sou rces besides the Ph ilippines. Not only does she produce sugar in Formosa but also import Java s ugar at advanta-

20B

THE COMMERCIAL & INDUSTRIAL MANUAL

geous terms. Her import of hemp is by far the principal part of our export trade to Japan although even in this case a great deal of the production and C!xportation is in the hands of Japanese business men. There is a good demand for Philippine hardwoods in Japan but the bulk of this trade is in logs and not in sawed lumber. Here lies one of the weakest links in our foreign trade and it would soC!m as though some kind of a commercial agreement with Japan is in order so as to smooth up our heavy unfavorable trade balance. Just how that can be done is a subject which is outside the scope of this brief article. Next to Japan our unfavorable trade balance is with Chinn from which country we import large quantities of vegetables, fruits, and other foodstuffs together with yarns, silk goods and other products, The Chinese market for Philippine cigars should have been a fairly It"ood one to offset our imports from China but even 'bhis trade is now being undermined by the manufacture of cigars with lowerpriced labor in that country. Of course, this tendency is reflected in a larger export of leaf tobacco instead of cigars, but the Philippines is in the long

UNITIlD

P"llo\CALE

Mlr-'lI<G

run the loser because of this development. Here again it maybe possible to conclude a trade agreement with China which would enable us to balance off our trade with her in a most reciprocal manner. Our visible trade balance with the Dutch East Indies is decidedly against us because of our imports of crude oil, lubricating oil, and Sumatra leaf tobacco essential to our cigar manufacturing industry. It would seem hardly possible to counteract this unfavorable balance by large Philippine exports in view of the fact that the products of the Dutch East I ndies are very similar to those of the Philippines. 1n the case of the British East Indies, our unfavorable balance of trade is due mainly to our heavy imports of jute sacks and sacking, of which we import huge quantities "early Like in the case of the Dutch East Indies the expansion of our export trade to the British East Indies is in a problematical situation but it deserves further and careful st.udy. The same thing may be ~aid of our trade with the French East Indies which is a one-way trade because of our imports of rice, ~Jutinous and non-

COMPAl<y-

PAllo\CO\LB

MAMDULO\O

Dl$Tr:ICT

PHILIPPINES glutinous, without the corresponding export tl'ude to counterbalance it. On the other hand, we enjoy a favorable trade balance with H ong kong and Siam, a s follows:

,. lj).l61.00 1'1 ,19}.Oll.OO I' 1.176.00

TOlll ..

11 0,114 .00

I.019.i~9.1X1

lOS,7)3.00

~ 1"1.60J,m.oo 1"I,hIM;-.;

Because of the fact that Hongkong is a free port and because of her great proximi ty to the Phil~ ippines, we export quantities of almost every Philippine product, including lumber , cordage, cigars, fibers, leaf tobacco, lard, vegetable, butter, sugar, beer, etc. To Siam we export cordage, lard, and vegetable butter compounds. With regard to the second point mentioned above, it is significant to note that OUI' external trade with the Far East represents over 15 pe:ccnt of our total foreign ~rad e as compared with a little over 10 per cent with Europe, 1 per cent with Australasia, and less than one-tenth of one per cent each with Africa and Latin America. Of course, the lion's share of our export trade since

209

America n occupation, and particularly si nce 1909 when preferential tariff relations with the United States wel'e established , has beer. with the mother country, I n 1935, over 72 per cent of our total foreign trade was with the United States and her possessions. It stands to reason that were it not for sueh preferential treatment of the Un ited States in Philippine trade and vice-versa, pel'ha ps the lion's share of our external trade would be with our Far Eastern neighbors. As a matter of fact, our foreign trade statistics before American occupation poi nts to this conclusion, The exports of the Philippines are essentially raw material s while our imports are mainly ma nufactured products. As long as our Far Eastern neigh bors al'e not highly industrialized, with the exception of Japan, it will be very difficul t to attempt to expand our export trade of these raw materials. H owever, as our domestic industries and those of our neighbors become industrialized, the difficul ty wi ll become less because in the f irst case, that is, if we industrialize our local products, we would then be o.ble to broaden our markets and in the second ca~e, that is, if our neighbors were industrial-

GO Lt> DUST TUNNI!L S"OW1NO C () MPRESS()R H()US6 AND BLACI: SMITn SItOF-l-.-IAPASO GO LD FII! LDS, I N,"

210

TH E COMMERCIAL

ized, they may need more of our raw materials and thus al so lead to larger export trade. Wi thout reflecting upon the cfforts of the government to expand our external t rade, J venture to say that up to thi s date no really systematic und

INDUSTRIAL MANUAL serious attempt has been made to expand in a prac_ tical way our CX1JOl't trade in the Far East. Let us hope t hat t his wil! be done now that we have sta l'~ cd OUI' new government and that it will be done under propel' auspices.

DEVELOPMENTS IN PHILIPPINE MINOR INDUSTRIES' COKO)lI C PROGRESS of a country is generally reflected by the state of d ~veloJ>l11ent of its in. dustl'ies. Where household industries a re predominar.'t, methods of production arc crude and the outpu t limi ted, the country is gene a lly POOl', the people are unable to secure a living wage and generally have a low ;;tandurd of living. There are usually f Olllld u few wealthy barollS that ride u pon the backs of ignorant and underprivil·z ged peasantry, an u npl'oductive leisul'\ cJass whose main occupation is to keep the downtrodden class poorer and poorer. The count ry is subject to exploitation by other rnOl'e pro g ressive countries, and is usually a dependency of a powerful and industrial~y progressive country. On the other hand a country with g reat industrial plants, l'xtensive production and with men trained in the ha bits of industry and in the technique of mass production- Huch a country ban easily be economical I y independent and must be reckoned with in all affairs of international s ignificance and importance. )

THE PHILIPPINES i, unfort u nately j ust being initiated into the fie ld of indu strialization and at a time wh en competition even in its own market, is very keen . The f!"rowth vf its industries has been painfully slow, checked by apathy from within and by restrictive measures and limited markets a broad. Our prospel"ity-a low statistical prosperity according to an economist--i~ akin to that of a poorman w ith limited means and needs. Thc Philippine Government is not unmindful of this situation. Steps are being, and have been, taken to develop intensively and extensively the the neccssal'y aids in th e r esearch on and determination of industries to be developed; it has undertaken thc establishment of industries whose products are vitally needed both for consumption and L r usc in other important manufactures; it has led a nd is leading manufacturer s by the hand in the I'}",'> per steps in the exploitation, promotio n and de\ c!:'pment of important and necessary industries. T he Departmf'nt of AgTicultUl·" and Commerce has planned a long-view program for the devclopment fo f the basie industries of the Philippines- the manufacture of cotton yarn , sacks from abaca and rna• Ill! ::i. It. :\[r."DI"U t:TO. Chid. D iri. i"". nu"a" 0/ c<> "",.,,~<.

C<>m ",..,.~i~ 1

l "I"I;9''' U

guey fib2 r s, ham, sausages, canllp.d goods, bricks. tJlps and sanitary fixtures, gla ss, and the establishllu.m t of such industries a s Ilocano textiles, fi sh canning, dai ry industry, man ufacture of quinine, and the industrialization of coconut pr oducts and the imprOVement of eopra, and the extraction of rote!lone from derris roots. I n addition to this 0 \'0gram, the Government is undertaking an intf'nsive research on the possibilities of Philippine materials for the manufacture of paper, starches. tannin, oils , etc. For this purpose it has established experimental factories in charge of the diffel'ent bureaus under t he Department of AgricultUre and Commerce. T o intensify the indu strial development pro· gra m the National Development Company has recently reorganized and given a more effective in<;tr umentu \i ty ~md power to go into an inten sive and practical devekpmcnt of the necessary industries fOI' which materials are available in t he country. The Bureau of Commerce has consistently and con· tinuously campaigned for the pronlotion of local indu stries and the consu mption of local products and its efforts have been hcartil v se('on ded by aU element s in the community, not onl y in Manila but also in the provinces. The Chamber of Commerce

PHILIPPINES

211

of' the Philippines nnd its pl'ogony, the NEPA, have our countl·~'side will assuredly make for contentment and prosperity among the masses and help also taken the field in this crusade. With all these agencies and institutions working fol' the promo- stabilize the new government's social foundations. tion of our industries, we cannot but expect their It is also necessary that mass-pI·oduction industries cumulative efforts to l'cCashion the industrial feat- be established to enable us to pro\'ide the ever inures and make-up of t he country. Already we see creasing requirements of our market. Our material tan'gio!e rClsults and visible indicat.ions of progress resources are almost inexhaustive and limitless t hat and ad\!urlcemO!nt in many lines. The importation there should be no excuse for our failure to make of many article!' is gradunlly decreasing and manu- usc of them. Our forests, OUI" seas and subsoil facturing plants producing their substitutes are teem wi~h materials and resources not available to ;pringing lIP almost everywhere. It will not take other countt·ies, w hich would easily yield fortune to adventurous industrialists and capitalists. II. long time before the Ph iii]>pincs will take its rank anl'lng lhe p rosperous industrial nations of Our industriali sts fortunately have responded to t he call, the needs and requirements of the counthe world. The devclopment of industries in the counbry try. T hey have gone into all sorts of ventures, hns two-fold purposes: Fi rst, to produce the art- IUI'ge and small in spite of the gloomy forebodings by a few inveterate pess imists. The story of the icles-c~pecialy a rticles of necessity-that will supgold boom is now known to all the world, how layplant those that we ptescntly import in great quanmen havc stolen a ma!·ch on technical men in distities: nnd second, to ~.ovide work and ample SOU l'ce.;; of Ijv~Jihood to the mass of the population. I n covering the mincral wealth of the eountr~·. Like~ the fanning commun ities qf the country, we have wise thcre has bpen brisk activit~· in the industrialization of the p!'incipal staples of the country. i\'laan abundant supply of labor which could be profitably utilized in household industries to supple- nila hemp and COCOlluts, the forest. marine and ment farm work, especinlly during the off-season . anima l p oduets-all UI·C engaging the attention of The development of household industries right in scientists and capitalists. Innumerable plants and

OIlOQU I ETA-DAPI T AN--OcCIDENTA L MIIAM I'

212

THE COMMERCIAL & INDUSTRIAL MANUAL

industl'ial shops are springing up in all parts. From Allar!'i to Davao comc rcports indicating extensive activities in manufacturing ventures. The following figures indicate the extent thc industrialization of the country has gripped the country: P"" .., OctiJonul No!"' •. P.mp.n~ . ..

Ctbu .. ... .

C.pi•... R....1..

•.

Z=lbo.IlI, . ... 11<><0' Su, ". Ilub~>n ..

T.y.b ........ .

P,D, .. ",. D.

T.,.I I . .." ., • •

l'lUIl.)6} 16.197.000 7.)97.000 7.110.000 6.476.000 1.)00.000 I.GlS.OOO 817.000 JH.ooo 6)7.000

c•••

F,j",.,

•

..",." ..

" " " noticeable in ~

The most important development many industries, however, is not in the number of plants that spring up here and there nOr in the amounts of investment put in l:.o the industries. Of more importance t~us are (1) the improvement of technique and the introduction of scientific methods and (2) the employment of men trained in technical and vocational efficiency, both of which are changing the industrial atmosphere and outlook of the country. The progress of manufacturing will be tediously sJow if the ne v Philippine industries are to follow the trodden pa h of antiquated shops.

The introduction of machinery, the conversion of household shops into mechanized plants, the employment of technical men in the industries, have changed to a certain extent our tempo and acThe large celerated our progress much fa ster. enrollment also of young men and young women in the schools of industrial chemistry and industrial engineering attest to the change that is impending and talting place in our industrial plants. The small, unsanitary plants with two or three somnolent laborers are fast disappearing, especially in industrial centers, and in theil' places are gigantic enterprises that produce by the mass. The effect of this change in our industrial world is gleaned from the shelves of the stores selling Philippine-made goods especially in those of t hl.' Manila Trading Center. Years ago the articles exhibited therein were derided and despised at sighL by shoppers and visitors. No wondel' because the articles were prepared haphazardly, a number of them were incased in second hand bottles a nd cases that had seen better t imes. Theil' general aspects took off any attraction they might have had intrinsically, The shoppers s imply passed them by and

PHLLIPPINES when they found they were being quoted and sold nt higher prices than similur imported goods, their attitude was unforgiving. There were the bagoollg in bottles half closed, the labels looking old and illegible, and each bottle with diffel'cnt contents, taste, texture and general appearance. There was n textile that shrunk liItC a rubber band, it could not be used after the first washing; there were toys find fancy, (supposed to be fancy,) articles which were so crude they could hardly be l'ccogni~ zed for what they were supposed to represent. And so on to a limitless end. Nowadays our tousehold industries have different stories to tell. Thcl'C is hardly any comparison, no relation, between the present and the past, The articles now produced for sale are all smartly dressed and scientifically prepared, All of which is due to the avid desire of the manufacturers, small and poorly financed a t they are, to improve their products and their methods of production and make a nl>me in the industrial wodel. The Filipino manufactUrer nowada,ys expect patronage and cour the favor of the shopper not by an appeal to patriotism or of the NEPA spirit of their nationals. They sell their products entirely on the basis of merit and quality.

213

This development in the household and manufactUring industries are found or exemplified by the hemp products industries, coconut products industries, foodstuffs and drinks, household utensils, curios, furnitures, etc. The development of the hemp products industries is nothing short of marvelous. Nothing was knowr of the possibilities of this article more than as a material fOl' cordage that the maritime nations hankered for. Manila hemp slumped in the foreign markets and as "necessity is the mother of invention," the Bicolanos began making twines for borne use, Soon the GO\'ernment and some business concerns started requ isitioning the twines and in a shortwhile the indust ry became more 01' less stabil ized by the reg ular demand here and abroad. This gave incentive to other manufacturers, The hemp was braided and made into floor and aisle rugs. These are continuousl y being impl'oved, The latest development is the "Persian" rug style which is in demand by weU-to-do matrons and housewives. Another manufactures fanc~' handbags fOI' milady. Fancy slippers are woven from this fiber, and numerous other articles are now being made out of this fiber. A big factory has just been establi shed to manu-

â&#x20AC;˘ 10SH McMICKING, GUNHRAI.

MANAGH~

AND

C, S.

SALMON, GRNRRAL AGENT

THE COMMERCIAL & INDUSTRIAL MANUAL

facture these articles to meet the increasing for路 eilt'n demnnd.

The coconut is a prolific source of foodstuffs and household articles. The margarine which was consumed only by the lower class has invaded the mansions of the rich, because of the improvement of its flavor and the eliminution of its rancid-odor and taste. Vegetable lard has become a fixture in the Filipino, and even in fOl'cign kitchens. The quality has been so improved that its shortening quality is even considered superior to the animal lard. Sweets and confections from the meat of the coconut arc now a delicacy for all ranks. The lowly coconut husk and the tistis have also found practical uses that compete with imported materials and art路 icles, 'rhe second is now manufadul'cd into hcadgear for I,he defenders of the fatherland, In foodstuffs is probably where Philippine manufacturers, espebially in the In'ovinces, have made rapid strides in ~e use of .scientific methods, The manufacture of haUl and bacon, pickles, wine and liquors, fruit flavol's and extracts, and native sweetmeats, is canied on upon scientific and mod-

ern basis, Theil' products can vie with t he impol'ted products, No longer do we see bagoong bottled haphazardly all'd incased in an uninviting bottles; hams and bacon have now longcl' staying quali_ ties and cun compete with the imported ham in flavor and ap pearance; fruit extracts and flavo l's are unequaled; and native sweetmeats can now bc sent abroad with an assuranCe that they can stand the test of the most fastidious consumer, There has doubtless been a radical change, a change for the better, in our industries, Our achievements in improving our products indicate wha~ we can do in the future, espeeiaUy with a mOl'e extensive mechanization of OUI' industr ial plants, \Ve have just made a beginn ing but we have already made deep inroads into the importation of many of the erstwhile important imports, In a few years more it is confidently hoped that P hilippine industries will hold theil' own ag3inst foreign competition, and the country will be able to utilize all her resources and materials in producing our necessities, personal and nntionnl.

MUNIC IPA L GOVIIIlNNIINT BUILDISG-PASAY, R I ZA L

PHILlPPINES

21S

LOCAL INDUSTRIES' RECENT pronouncement of Comelio Baimac-cda, director of the Bureau of Commerce, that "the thousands of small handicrafts and household occupations that we have today are the means fOl' impl'oving the economic condWons of the masses," signifies the vcry dctcr-

mined policy of the bureau to e ncou~'~g~ Il'a tiolla~ism in the .d<!.velopmcllt of Phi,lippinc

industries.

He warns that unless Fillpmos combine to establish sb'cng commerCial and

industrial organizations to meet competition we cannot hope to increase

business of the country" which is fast going into the hands of the fOl'eigncl's.

OUI' shal'c

in the

The sariÂˇsal'i busi ness is

still under the control of the Chinese anti. the Japanese are invading every industrial pursuit even weaving which hith~rto was purely a

Filipino en_erpl'ise,

THE TRADE PROMOTIO N DIVISION of the

Burcau of Commcrce which has chargc of promoting salcs of made_in_the_Philippines products and

their products,

On the other hand, the consuming

public have been s howing a mOt'e favorable attitude towards things native, which accounts for the great

has, undcr it, the Manila Trading Center and Exchange cstablished in 1932 to provide exhibition and sales room of Philippine goods as a means of

sales of native products during the year,

assisting small producers" and manufacturers develop a much bigger trade ~or their products, The bureau succeeded very laudably in this line and has justified the great amount of time and considerable expcnse it has devoted in this h'ade :;>ro-

and

This gives a monthly income of pn1.59, The operat-

motion program,

apparently a loss of PI,904,68,

The public has only to look fo)' the activities and transactions of the trading center for 1934 to see how great the accomplishment of the govern-

tion was mainly due to the fact that the cost of

ment has been, The year 1934 was a banner year for made-inthe-Philippines products, as indicated by the sales made through the Manila Trading Center and Exchange, The quantity and value of the articles handled by tll'~ BUI'eau , through the center, would seem to indicate that the public has been responding )'eadily to the campaign on behalf of native indusll'ies, While at the beginning of the year, there were only 197 exhibitors in the cente)', on December :ll, 1934, that number went up to 252 01' an increase of 65 consignors, No longer did the BurCIlU find it necessary to employ persuasion before locnl p)'oducel's, manufacturers and 8!'tisans would ('on sign their wllres to the center; they have been l'eali7.ing more and more that the trading center can matcrially assist them in the mal'keting of â&#x20AC;˘ 811

[LDHDS~" T , R OSES

The total income of the Manila Trading Center Exchange, through commissions and profits

earned during the year 1936, amounted to P8,779,08, ing exp nses during the year reached PIO,683.76. Comparing the income and the expenses, there is This loss of opera-

printing the pamphlet entitled "How to Start and Manage a Sari-sad Store", published in 1933, was charged to the funds of the Trading Center,

Strict

economy was observed in expenditure!'; otherwise, the following expen'ses

would

have been bigeer:

Salaries and wages, P6,422,35 ; rentals of buildings,

PI,250; illumination and power service 1'714,96 and miscellaneous minor disbursements, 112,296,26, The government had no intention of going in-

to business,

The tra<!ing center and exchange in Manila and provinces which number n!}\\' 15 in all are accidental media by which the nationwide movement of encouraging Philippine industries by popularizing made-in-the-Philippine goods could be intensified. However, the operation of the "centers" was nevel' just a wasb~ of government funds because the people of the country are reapin!::: much while it goes without saying that a new consciousI\'()SS has been awakened by the extensivc wOl'k being done by the Bureau of Commerce,

216

THE COMMERCIAL & INDUSTRI AL MANUAL

MANILA TRADING CENTER

EXCHANGE

HE MANILA TRADING CENTER is a unit of the Bureau of Commerce of the Commonwealth of the Philippines. The main purpo ~ c of its creation is to foster trade and commerce br pl'orr,oting local indu~t l'ies. Org'nnizcd in 19J3, it has helped Philippine manufacturers and industrialists in advertising. selling a nd propagating their goods, thus effectively helping these manui;lC'tUI'Cl'S and industrialists in finding market for their goods. The Manila Trading Ccntel' and Exchange maint."\ ,ns a department store in the heart of the commercial distl'ict of Manila, Capital of the Philippine s, where practically all products of PhilippiM manufacture can be found.

MANUFACTURERS all over the Philippines either consign or sell their products to the Manila T radi ng Center, f01' resale to the general public at practically cost prices. This is done merely to help manufacturers find an outlet for their products, and to encoul'age increased production and consumption of home products. All products in the Manila Trading Center and Exchange are extensively advertised without cost to the manufacture r s. SCOPE OF ~CTIVtTy

The field of th(' ManiJa Trading renter extends allover the Philippin'es, Buyers He posted in important industrial centers or l'cgionp and products secured t hrough these buyers are l',ent to the Central Office of the Manila Trading Center in l'l'!anila where they are directly sold to the public or sent to other regions or provinces where such products may be needed, In this way, the Manila Trading Center becomes an effective instrument in promoting the interchange of products in different localities or regions in the Philippines. Ami this is all done without gain for the Manila Trading Center as thil; Office has been created, not for Govel'nment to make profit, but prineipally to help Philippine manufacturers find market for their products, without much o ..erhead expense fOl' them. The Manila Trading' Center and Exchange also helps in putting manufactUrers and buyers both hel'e anci abl'oad in direct contact, enCOUl'aging in this manner wider distribution of home goods in the local market, and eXJloltatit)n abroad, The Manila Trading Center finds a splendid opportunity in advertising local products in provincial fairs, carnivals and expositions where the Manila TJ'ading Center rarely fails to pal'ticinate. A

on VISITORS The Manila Trading Center is a real blessing

BLE!';SINC TO TOURISTS, SHOPPER S

to tourists, shoppers or yisitors. As a general rule, tourists like to buy l'epl'esentative products of the countIies that they visit in their travel. But in many occasions they are not afforded the opportunity to buy the things they want to bring along, because of lack of time. Going all over town hunting for the typical products they want to show to the old folks a~ homc, is really a great waste of t ime and trying to the patience of the tired tourist or visitor. But if all the goods their hearts crave for can only be found under one roof, what a bless路 ing will this be to them! Well, the Manila Trading Center affords this great convenience to the travellers, tourists or visitors. Located in the heart of the commercial district in the capital city, it is easi ly accessible to all kinds of transportation and vehicles, There is hardly any important Philippine product that cannot be found in the department store of the Manila Trading Center. PR I NCI PAL PRODUCTS Lovers of Philippine products find full contentment in the Manila Trading Center and Exchange, the biggest emporium of Philippini'-made gOO(]s, Wonderful worl,s of art made by expert Filipir.'.) craftsmen, delicately wo"en pitia cloths that has made the Philippines famous the world over, abaca products that are found nowhere but in the "Pearl of the Orient Seas", "rattan" furniture that has lately created such a great demand in the United States and Europe, the famous "buntal" hats that are known in all civilized countries of t.he wol'ld, the famous Manila cigars that are familiar t('l every smoker both at home and abroad, bellutifu l oil paintings made by the fOl'ernost Filipino al'ti"'ts, all of these and a countless varieties of other Philippine produets can be fo\tnrl in the Manila T t'ading Center, the government-owned and government operated department store that handles nothing but Phi!ippine products.

PHILIPPINES

217

MADE-IN-THE-PHILIPPINES PRODUCTS' ONSIDERABLE ADVANCE in the campaign for popularizing th(! local use and cons umption of madc-in-thc-Philippincs products has bc(m mnde b~' the Bureau of Commerce in the last two and half ycc.l's.

Since the Manila Trading Center alld Ext"hanp-c cam\" into existenco on August 17, 1933 numerous local products h&vc be'!!': sold for local manufacturers and producers. From Aug. 18, to December 31,

19~3,

the sales to tailed P7!i,949.11; in ] 934, 1>222,806.10 j in 1935,

P279,197.51 and from Janu:U'y 1 to Jun-;l 30, 1936, P10l ,468.93.

THE SALES OF MANUFACTURED proclucts at the store totalled 1'12,562.53 fl'om August 17 to

December 31, 1933, 1'26,689.75 for 1935. Of farm products, the sales effected through the P I'oduce Exchange totalled 1'63,296.58 (August 17 to December 31, 1933); PI61,978.54 for 1934; and 1)141,774.29 for 1935. Sales in expositions, including floating exposition, Commercial and Industl'ial Fair of the Manila Carnival, and provin~a l and municipal fairs participated in by the Bureau, totalled 1)45,037.81 in H'34 and " 73,329.99 in 1935" I n connection with its gen ral trade informat ion service, the Bureau du r ing t he period of two and one-half years under review, l'~leased 4,133 letters in answer to inquiries, including 795 letters in 1933 (May 15 to December 31); 1,287 in 1934: and 2,051 in 1935 (January to November 14). There were also released during the entire period 10,987 pamphlets and publications on different subjects to various inquir ers. Revenue collections in the form of Ices Ior various documents and papers filed reached 1'164,076.43 during the two a nd one-half years under review. They were l)23,4.7E1.33 in 1933 (from May to DecembCl' 31); 1'58,107.24 in 1934; and 1172,393.86 for 1935 up to November 14 only. These fees were for the registration of corporations, partnerships. patents and trade-marks, aliases, business names. brokers, fClÂˇtilizcrs, bulk sales documents, certified copies of documents, and fees for products consigned to the Bureau for sale. It is indicated that investments in new COI'pO ' rations and pnrtnerships were quite heavy during the period. For the two and one-half yeal'S there were registered a total of 903 new cor porations with â&#x20AC;˘ BII lIos. PIO

COJll'tI!, Au.mbl~"",,, IrD'"

M".""I<.

~n authorized capital stock of 1'166,'138,269 plus 113,600 shat'es without par value; and a total of 497 partnerships w:.n a total capital of 1)3,211, 101.73. Considerable increase in the number of licensed stock brokers was noted in 1934 and 1935 as a result of the mining boom.

The review further indicates that the present status of the 571 rural credit associations is good, there having been considerable increase in surpluses, reserve funds, and dividend accounts of these associations. In regard to the collection work for the Rice and Corn Fund, it is pointed out that, while on May 15, 193~ or thereabout, there was only 1'27,603.28 in the Insular Treasury to the credit of the fund, at the close of the period or on November 14, 1935, there was 1>132,66 1.81, in spite of the fact that 1'100,000 had been transferred to the Manila Trading Center by virtue of Act 4069 , and 1'65,248.89 had been spent fOl' administration. In regard to the cooperative marketing associations, the record shows that while Oil May I S, 1933, there wer e only 89 such associations with a total membcrsnip of over 3,000, on November 14, 10RS, there were alreadY 114 associations with over 6,000 members. I t has been estimated that the latter association had handled up to Novembel' 14, 1935. about " 3,200,000 worth of native products belonging to their members. With respect to the bonded dec warehouses it is declared that in 1933, 59 warehouses with a total authorized capacity of 1,247,349 cavans of palay were licensed while in 1934, they totalled 81 with n total authorized capacity of 1,668,315 and in 1935 (Janunry I, 1935 tv November H) 9fi with total authorized capacity of 1,697,566 cavans. All of these warehouses wer e sufficiently bonded. and th('ir contents insured, in accordance with law .

THE COM..\1ERCIAL & INDUSTR IAL MANUAL

118

RETAIL TRADE OF THE COMMONWEALTH ' CON OMI C

PROBLEMS

confl'onting

the

entire world

to-day are unprecedented in history.

Having tr ied to solve them in the old traditional way without much s uccess, the nations of

the

world

are

cvcry where t l"ying

out also unprecedented re~ledie s" We see in t he

United States a New Deal administration which has been experimenting novel cconomic and social reforms many of which :ll'C bcyond t he pale of the old, tried constitutional methods.

We see in Gel'many and Italy th2 development of a so路called Fa scism that is

nothing but an effort to stem the tide of a greater g reater crisis.

W e s..::e in Russia, with their suc-

cessive economic plans and the dictatorship of the Proletariat, the culminations of a most l'adicai re路 gime, And rig ht to the north of us, wc see our neighbol', Japan, exerting most unus ual efforts towards tJ'nde expansion as a means of s upporting he r overcrowded population. HERE IN OUR COMi\'IONWEALTH we have economic problem s all our own a nd peculiar to OUl' cond itions. To solve Illany of these economic problems, we havc trie~ the old traditional wa ys. Having found them inadequ~te to the needs of the occasion, \'I\!, like the rest of the w orld, are :Jlso tryi ng out a new course, hoping that the solution to these !l1'0blems will be forthcoming. The pronouncement,;; of OUI Chief Executive before the ~ationRI Economic Council now serve as 0\11' g\~'dC-posts ii,' blazing our new path, Blind adherence t thp laissez-faire doctrine is henceforth, accordin to Hi s Excei!ency, to give wa~' to a more assertive Govcl'nment intervention in business whenevel' such a step becomes necesS:'lry in the interest of the na tio nal welfare. Not only our Chief Executive but the Con 5titution itself speaks in unmistakable terms concerOl ng this point. The Government is not to be handicapped by time-worn principles of political economy in trying to serve the best interests of the nation. Inhibi tio n s of a by-gone era al'e out of place in OU\' contel11pol'al'Y national life, Wt! Illust face our problcms to-day courageously, armed with methods and instrumentalities that are truly m odern, RETAIL DISTRI8UTION

Among our most unique econ omic problems i!; that of retail distribution. Seldom do we find elsewhere in the world a di stributive str ucture and machincr~' so controlled and so manned by aliens a;: jn the Philippines. Few are the countries indeed who:-"'\! theil' nationals do not con stitute the gl'eat-

C!;t majority, if not wholly, the purveyors of goods that move db'cctly into conSUllllltion. F or it must be said, even on pain of ut.tering sOr:lc'i:hing quite

t:-ite, that the retail distribu tion is t he foundation of any di stributive system. It is the retailer that sup ports the entire upper structure of such a dis-

tributive system. Situated closest to the consumers, they arc in a most strategic and vital position to inflUrnce their tastes, theil" pl'efel'e nc~ s l ~heir. h ~颅 bits. Through the retailer , the last hnk In dl5tl'lbl1tio~ . must pass all the goods t hat enter consu mption. Like a sentinel on guard at a gateway, t he retailer occupies a commanding position in our economic life, collectively speaking. And yet as we all very well know, the control of this trade is far from being in the hands of our nationals. If we are to have any measure of control in our distl'ibu iive struct.ure we should begin from the bottom nnd t hat is the retail system . Impol'tnnt us the question is to OUI' enti r e economic life, wh at we have done? Nolhing, but to have allowed things to take their own course in the good old laissez-faire way. It is true that we have lamented ou r situation in this respect many a time but insofal' as our accomplishment is concerned out" "late is cl ea n. RETAIL TRADE FOR NATIONALS Or.'LV?

A few years ago the the n Representative Ramon Diokno sponsored a bill in the Philippine Leg islature declaring the business of retaili ng as an exclusive pl'iviiege t{1 be enjoyed only by nationals, il'c'uding of course the citizens of the sovereign country. As you know, t he bill did not pa ss, but

PHILIPPINES not because there was not the will among our legis. lators to meet and solve the problem at hand; rather was it because of a great difficulty which would have affected our standing and that of the United Stutes in the family of nations. AI'med with admirable pCl'sistcnce and the ringing conviction of a true national cause, the s ponsors of that bill knocked at the door of our Constitutional Assembly and found in Delegate SalvadOl' Al'uneta a champion with n determined heart. Here again the old international difficulty arose and the measure did not pass. Right now, measures of the same tenor are

before

OUI'

National Assembly.

Let us hope in the

spirit of the poet that knocking' a third time may land us at OUI' gaul. r, fol' one, would unhesitatingly welcome the execution of this sponsored idea if it could be realized unller our present semi4sovereign status. BUSI NESS VERSUS LABOR

But whether or not nationalization of retail trade prospers, I believe the~ is something that can be done at least to help ameliorate the condi-

219

t.ions under which our nationals struggle in the grim realities of bus iness and labor com!>2tition. The Committee on Commerce and Industry of the National Assembly, of which t happen to be the chairman, has adopted with its strong recommendations, a bilJ which we hope will lift our national ret."lilers from their present situation of despair and helplessness into one in which they will enjoy a fair chance of s uccess and a brighter prospect for expansion. III line with the> economic policies of the administration as best expressed by the Chief Executive in a recent address to the National Economic Council, we !)l"opose to establish as a subsidiary of the National Development Com pany a national mer chandising coq)oration initiully capitalized at two million pesos, not with the idea of the Govemment controlling and running dOWll private merchandising activities as some people seem to believe, but 1)I'imarly to extend a helping hand in a pl'actical way to Filipino ret.-lilers. The national merchandising corpol'ation will not disturb the existing merchandising order in an~' way ex~ eept by !>laeing the Filipino ret;dler in a position

T HE COMMERCIAL & INDUSTRIAL MANUAL

220

where he may be able t.o compete on equal ter ms with alien retailers who under present conditions enjoy tremendous advantag es that crush the Filipino retailers to almost nothingness. Whether this

situation is of the making of the alien r etailers or not, the fact is that they exist sufficiently to smother any Filipino attempt to enlarge their share in this field of business

NATIONAL DEVELOPMENT COMPANY TO MANUFACTURE LOCAL PRODUCTS' HE N A 1'ION AT. Development Company is embarking on n long-range economic program of developing Philippine products on 11 huge scale. Technical details for Ql'ganization of a food products corpol'ation, copra and abac.1. central units have a lready been completed. Appointments of men to compose the technical staff to attend to these goverll~nent ventures were annoullced at Malac2.fian last night. Dr . Manuel L. Roxas, Malacafian adviser on s ugat路, was named chief of the technical staff of the development company. Members of his staff nre Dr. V1cente Aldaba, of the plant industry, industrial technologist; Hilarion Henares, of the Isabela Sugar Central} industrial engineer; Dr. San tiago Rotea, food p"oducts expert and Florencio Talavera, fi shery expel路t. These men were r ccommen ded by Antonio de las Alas, secretar楼 of fi nance, and President Quezon RIijlroved their appointments yesterday.

THE FIRST PROJE<jI' to be established by the National Development C~mpany will be a copra central in Tayabas. This will be started in a few weeks, it is understood. The Food Products Corporation will have its main factory in Manila. It will manufacture tin cans . Its subsidiary canning and packing units will be established in the different places where the needed raw materials are found in g r eat quantities. Thi s will be the fil'st canning venture on a large scale in the Philippines. The only other canning factory here that does canning on a fair commercial scale is the Del Monte factory which cans pinca pples in Bukidnon. The Food Products Coq:l Omtion plans to engfl j.!."(' in canning and food preservation for local con"'mnption. Government experts state that canned goods impol路ted by the country run into several million!> a nnuall y. Many of these canned products can be r a i!>ed in the Philippines. The big gest problem thai the corporat.ion has t o fa ce i!> the manufacture of tin cans. Del Monte has been manufacturin~ ca ns in its factory. "rhen_ ever the govel'nment needs cans for experimental canning, it purchases tin cans fl'om the Del 1\"1onte factory. "TRlDU''';

JUl<r; LO r n. L93 7

It has been decided by the National Development Company that a large tin can factory will have to be erected in Manila to supply can ning or packing containers. T he proposed abaca central which is intended to aid Bicol abaca producers and give them an opportunity to compete with the Japanese in Davao, has also been decided upon. On his trip to Davao a year ago, President Quezon visited the abaca central operated by the International H arvester in Madalum near Davao. The operation of the central which strips and dries abaca in 40 minutes interested P resident Quezon and he instructed government experts to study the matter with n view to helping Bicol abaca producers. The International Harvester abaca machine has slicing machines which cut abaca trunks into halves and quarters before they are carried by belts to the stripping machine. After the abaca is stripped, the fiber is washed in chemicals and placed in a big drier. The fibe r moves inside the dr ier and in about half an hour it comes out of the drier read~' for sorting. The fiber is divided into dark or inferior fiber and white fiber. After it is sorted, it is baled and is r eady for IIhipment .

PHILIPP INES GAS MAI'WFACTI}RE

That the manufacture of gas from coconut shell charcoal to power the engines that will ru n the copra driers of the copra centrals of the Nation11.1 Development Corporation, will be undertaken by the firm, wa s announced at the corporation office. Experiments on the manufactu re of gas out of the material, by researchers of the corporation, with the cooperation of the University of the P hilippines, have turned out successfull y. The National Development Company will establish a cotton mill in its Sabani estate, Nueva Ecija, where land covering an area of more than 10,000 hectares will largely be devoted to cotton cultivation. There will be installed sp inning mills in the estate to manufacture cotton thread which will be distributed to cloth weavers in the province. The work on the establishment of an abaca central is progr essing sntisfactorily in Guinobatan, Albay. The first copra central is now being built in barrio Lawigui, Tayabas, Tayahas. About P200,000 will be spent for the copra central, and 1'300,000 for each abaca central. P H ILI PPINE TALK I NG P ICTURE INDUSTRY

221

yan I slands where Tagalog is not the official [anguage. The rea son is obvious. Our people under sland Tagalog better than English, and the story portrays Filipino life and ideals. If the probability of increasing the cinema theaters in the Philippines, to double the present number, materializes the profits of the pictures will be more than doubled; and if the dream to make talking pictures i:1 Spanish for distribution among the Spanish speaking countries becomes a r eality, then the motion picture business in the Philippines will be as profitable as in the United States. In 1936 the Parlatone Hispano-FiJipino, Inc., produced ten pictures at the rate of nearly one a month. Sa Paanan No K1'UZ obtained the highest income and Kalupita1l. Ng Tadhana the lowest Hampas Lupa At Kambal earned P21,500.00 in a continuou s run of 35 days at the Fox Theater in Manila, Ilnd is expected to break the record of Sa Pao7! an Ng Kruz. At th e end of 1936, the company, obi.ained a net profit of P28,303.77 and declared a di·,iclcnr. of 5 % . FOUR PlCfI'URF.:S PRODUCED AND DISTRIBUTED BY THE PARLATONE H IS PANO-FlLI PI NO, INC.

THE most enCOUraging sign of success of the Sb... _, PIC""" c." ./ c." ./ ..,,, ~" .p,.jt P""~/UI motion picture industr y in the fhilippines is the ".. I.,,,•• Oi"",.,;,. /t"G"" enthusiastic reception of the F ilipino p ictUres by ~> P"o>n a, !>:"' • . 1'16.161.)1 1'1.89-4 .16 1';0.691.01 !')8.976.1) 1'1O.~1O.}8 the Filipino fans. This new attitude is r eflected 14.44).7} Awn a, Ill,> Ulil> . 16.}8".97 1,060.11 ~1 .7sa.90 6.000,1\.1 at the box office of the theaters. A Filipino pic- ">Iul""", N>p, h. }8.)}0.16 H . )99 .j ~ 1l.0S-I.6) , >0,. 1.160.JO 6.1H.)~ ture earns twice or three times as much as an K.lupi.an T.~· h • • •. , " Il.HO.1 6 1.10'1.<8 21,1I6.41 16. 141.76 79) n Amer ican or any foreign picture even in the V:.:i,=a~-_-==,:,--""-"--,,,,,,,,_-,,,=,-C"-,,,,,,--,,,,,,,,,,_-,"=

COOPERATIVE MARKETING AND THE FILIPINO FARMERS' HE FIRST advantage to be derived in organizing or joining a cooperative marketing associa tion. is the exemption from the paynu.nt of the merchant's sal es and income tnxes a s provided for under the provisions of section 48 of Act 3425, as amended. The first pnl'ngraph of the above-mentioned ~ecti on clearly exempts duly reg istered cooperative marketing associations from the payment of merchants' sales nnd income t.'lxcs. The second pnragraph puts such association in the place of individual producers composing them a s I'cgards the exemptiOll from the payment of the merchants' sales tax on agricul tural products dclivercd to them by their members, or which in their contemplation, are but the extensions of the personality of their members, and the exemption of the members from the pa~'l1l e nt of the merchants' sales tax, if they themselves effect the sales of their ag ricultural products, equally extends t o the snle by such a ssociations of the agricultUral produets received from the members.

THE COMMERCIAL & INDUSTR lAL MANUAL

222

POOLI NG

The system of pooling the proJucts of different m('mber~ by a cooperative> marketing association is a "one~for-all and all~for-one aHair," Marketing risks inddent to the sale of the products of the members are equalized among the members who have delivered their products to the association, Unde r this practice, no pal,ticular member or membel's, who in(,ur losses in the mal'keting of products delivered to the association, wiJJ suffer thO! entire loss or burden which is equitably distributed among the other members, On the other hand, if profits !Ire made, no one memb(')' will totally benefit himself by sllch profits as the same are distrib\lted to the othel' member!; in proportion to the quantity, class, grade, or quality of the product delivered by them,

COLL~TI YE

BARGAINING

By pooling the pl'oducts of its membel's, the association is placed in \ better position to ad v a n ta~ geously sell the products, I ndividual sales generally do not command the best price in the market. P ooling brings the interest of all the members into complete accord and gives the association greate]'

bal'gaining power to make sale. at any t il,le and 111 an)' given market, By selling as a g roup Lhrough a cooperative system instead of as il1dividuuls, ÂŁa l'llIel'S avoid offerin'g products for sale in competition wit.h one another and thus increase their power to bargain with buyers. EX P~:NSES

R EDUCED

The coope rntives save the indiv idual producer from the trouble of finding a buyer foJ' his prociucts. By pooling the products, handling and accounting expenses ;lrc reduced to thc minil'Jlum and a variety of other essential services is given to the members at minimum cost. OnDERLY j\'!ARKET I NG

Disordel'iy marketing is br ought about by t he sale of pNducts by unorgE.nized gl'owers or sellers who dump their l)l'odllcts in the market with the sole purpose of obtaining high returns for thr>1! commodities without actually taking inlo consideration the actual needs of the market. Herein comes the principal gain to bo derived il.' joining a cooperative marketing assoc iation the main objective of which is to develop a more satisfactoi'Y marketi ng service rather than a direct or immediate increase

HEMP ROPE M ,\ I:1I':0 h:5TALl,H10N

PHILIPPINES in the price of the products, The marketi.1g service of a cooperative marketing a sso....iation includes the correction 01' elimination of abuses found in the marketing of the products of its members, STANOAltDIZ,\TION

PnoDucTs

By selling collectively undel' the banner of cooperative mal'keting a system of grading and classifying products is evolved, This helps trading because buyel's and sellers have a definite measure to guide them in their dealings with one another, By knowing the standard grade or cluss of a given commodit.y, buyers may deal with the sellers without actually seei ng the product, St:mdardizp.t, of grades or products makes the selling of farm commodities less difficult, stimulates the friendly interest of the buyer, cuts the cost of marketing and results in the elin~nation of trade abuse~, l. tel' price!; and the prod~tioll of high-grade products, CnEDIT FACILITIES One of the principal problems of small Filipino farmers is the lack of credit facilities to tide them over during the planting and growi!lg seasons, Orderly marketing as conceived in this article is impossible unless the farm producers al'e given fin_

HIIMP ROPII

ancial aid until such time as their products are ev.mtually sold . The collcctive credit of organized farmers as a means of obtain ing credit facilities from banking institutions has been of valuable help to tobacco fal'mers i:1 the Cagayan Valley, Credit advances amounting to 70% of the current market value of their stored products have been granted them by the Philippine National Bank, CONCLUSION The foregoing enumeration of advantages of joining a cooperative marketing association, however, should not lead the Filipino fal'mel'S to believe that a cooperative marketing association is a sort of an insurance policy that guarantees high prices, irrespective of the marke t condition.; obtaining in a given territory, It should be understood by them that these cooperatives, like othel' commercial enterpdses, cannot evade th<:! sound basic principles underlying successful business operations . The highest price obtainable in a given market on individual sales may not always be secured thliough cooperative marketing, hut that the highest average price consistent with economic conditions and the public interest for a long pel'iOO of time is the real purpose of accomplishment,

IN TUII

M""INO

THE COMMERCIAL & INDUSTRIAL MANUAL

224

PHILIPPINE BASIC INDUSTRIES PHILIPPINE SUGAR INDUSTRY'S COMPLETE DEPENDENCE UPON THE AMER ICAN MARKET CONSUMMATED BY THE LONDON CONFAB

UGAR CANE was already in cultivation here when Magellan discovered the Islands in 1521. The beginnings of SlIgar cane utilization W C1"C obviou sly fol' chewing, and for the making of crude sugar vinegar and fermented drinks. Although a bl'opical crop , some chronicler s believe that sugar cane is not a native of but an intl'oduced plant into the country. The tl'cmendoll$ development of the P hilippine sugar industl'Y was affected only recently as the result of shifting from low-grade mU$cQva:lo sugar to centrifugal sugar manufacture bep-inning in 1920. The development in fact was stimulated by an Act of the U . S. Congress in 1913, removing the limitation of :WO,OOO tons per annum cOl\tained in the free-trade tariff law of ]909. Althongh ;It present the Cnited f)b'>.tes gets about 98 pel' centum of the total sugar export of the after .,he shal l get 100 per centum by vil,tue of the recent London Sugar Agreement. THE 2:000,000 PEOPLE dependent upon the sugar industry maltes t his industry second in imp(ll'tance in the Philippme!> in this respect being outranked only by th\ coconut industl'.y, Moreover, the cap ital invest..ed in it which is over P451,01)(l,OfiO, is the biggest in the country, From the sugar industry, the Phi lippine Government der ives over P20,000,000 in revenues in the form of taxes paid dil'!eetly 01' indirectly by the industry, which amoun being equivalent to abollt 40 pel' centum of the total Insular Government I'evenues. As the leading export product of the country, the .yeal·ly value of sugar export being double that of the coconut prof!ucts and representing virtually one-half of all Philippine exports, it can be readily visualized how milch of the country's purchasing power is correlnted almost with the sugar industl·Y. And yet only ahout 7 pel' centum of the cultivated area of the Philippines is planted to sugar cane. Sugar is being exported to three other COUIItries, but thi" will soon be hisvll'Y as the recent London Sugar A~reement prohibits exports outside the United Stat(1s. T.-CULTIJRE

here·

acreage during the same year are: Occidental Negros, Palllpangn, T arlac, Lagnna, Bamng-as, Iloilo, Ceb\! Rnd Qripntal ~el1"l·o:-,. The tol:al aCl'E::age o{ the 'lll'o\'il'!ce of Occidental Negros al one is about 1:12.41)0 he('tares which is O"~I' 40 per ::enLutr. of the eoltntry'<; total. In value of ;>Toouet.ion, however. that of N~~l'oS represents over 50 pel' centltn~ of the total of the whole country which is P71i,50fl,OOO (1935) data). Va.1-ieties Raised.-TheT~ are manv cane varie· ties If I'O\VTI in thE': Philippines, most of which are intl'of~l1ced , 'rhe following, h owever. aTe thp most impClrtant. They are pr~senterl in the form of a key in ordl'r that they car. be better identified.

A Sulk< 1,lIow. 'OWRlb<a'" III Sulk9Y. hi,h ....... P. O. J. 2878 L.ton Whi,c III l."rnodcs m,Jium. 1rf'(lW' .p...",' At S,.lk. pur pic' . C lo«mod" .hol<. Up'r'o. wi,b <uek. B.dib Cl In«mod" m,lium···· .... D D In«mod .. ,il'"'' ".Ik ...·ilb I".nub ,b.J•. on ,uO'O« .i<h" .•. ". .... • P( ~i,i~~i!< 5<>,"A"oc,." ... bylw.d)

,"'n" .

""""&<

PMlippi1w Snil(W 1)/'oduct-io;~.-'rhe PhiJi p p;ne,o; is one- of the lending sugar producing countries in the world, outranked only by India, Java, Japanese Empire and the United State!> in the order of their importance. Tn 19:15, the countrr had a total aCl'page of "Vel' 2J 1.000 hectares with a total production of 10,400.000 picnls in terms of centri fue-nl ,o;ug-ar. The ranking- provinces in the order of their

cou n tr~',

In,.,noJ« wi,h c ..d," F In,,,ood .. ",. i8h •• ".lk ,"c' puri,y hi,h" D. I. 51 G FI In<c,.oJ .. no' " .. iSh,'" G S,~lk <o ... d wuh ~'"1 bloom. rOM."

,,,,,1"

A~I~~~ I~~:~':; b;~ briJ)

GI S..,lk wi,bou, .... y co'''. '~O'''''' co:>l<nr h',b" M""j,iQ'l9OO EI In,,mode. ",i,bou, ""k'" H H Sulk "dJi,b.J.,k pUlpl,. i.cli.,d '" 10JI' ·p~~j)n •• Furp!c (or

HI S.. l~ I;,h, purpr,. i. ,.<rOI< ri<h· ..

N.~, ""rpr,

COt

C<b.)

PH ILIPPINES Cos! of Producliolt.-The cost of production of sugar varies slightly in the different sugar producing provinc(>~ . In Occidenlal Negros the cost of production is minimized, principally because of its morc favoraoJe soil and climatic conditions, besides enjoying comparati\'c.l~' low transportation eOit through its natllral advantage to ship directly by water. The rail, iightt!rage, and terminal storage charges which arc paid by the producers in Luzon are eliminated. It is a clear case of minimized overhead expenses as the result of specialized and mass production The following is a sumnm !'y of the economics of production per hectare: I~C:OIII< {,Olll 5S p;tIIl. (II •• · of 10 1"") " 0..[ of producuon_ •.••..• _._

»1.~

pet ,"col. __

P~U.50

")60.00 ......... _ .... _ I'St .SO

On the basis of pre,sent market quotations, a planter makes a net profit of' only 1)1.00 on export sugar, whereas he loses about PL25 by selling sugar for domestic consumption. It will be noted that because the sugar industty is the most modern in the Philippines, the planter becomes automatically a manufacturer, His crop is disposed of not in ra w form as is usual with all crops but in manufactured forms. This is effected through a cooperative but binding arrangement between the planters and the owner s of centrals, the chief provision of which is that t he p lanter gets a maximum of 60 per centum of the sugar. All shown in tilC'. table on page ... . this share averages 550 pi('uls pel' hectare during a per.iod of ten y('ars. J l.-

MANU I"ACTUR£

The principal products mall'ufactul"ed from sugar canl' are: (1) centrifugal sugar, (2) refi ned sugar, (3) mola sses, (4) alcohol and (5) confectioner ies, Recent thl'eatlening events, however, have forced the Sllf"f\l' indu<;try to diversify The manufacture of wines and liquors is bcing evpanded and the nlnnufncture of fertilizers and glassware specially hoWes is being undertaken in a commercial scale. C61!trifunal Suva)' MUlutfactl/1'6,-There are at pl'escnt 47 centrals in the Philippines representing a total investment of about 11 187,000.000, 40 per centum of which is American. Although Americans own only 10 centrals, one-third of the number owned by Filipino!'., their investment, however, is

225

greater per central; their total investment being three-fifths that of the Filipinos. Philippine s u~ar centrals although younger than those of Cuba, are :lmong the most morlert) in the world, their machinel'ies being of American make. A normal milling sea~on lasts 150 days, during which the 47 Philippine centrals have a grind_ ing capacity of J.2,000,000 tons of cane. The average recovery per ton of cane being 1.8 piculs of sugar, these centrals call therefore produce an annllal output of 2,600,000 piculs or 1,500,000 short tons of sugar, The share of the centrals hom the milled cane being at least 40 Jler centum, on the basis of present quotations of 117.50 per picul, the gross income of the centrals would be 1'78,000,000 which is mOl'e th an 40 per centum of the total investment, Refine d--S llyar Mamdltctw·e.-ReCined sugar is the result of recrystallizing centrifugal sugar, hence the :>Iants utilized for the purpose are called sugar refineries. There are four such plants in the country at prcsent,--threc in Luzon and one in Occidental Neg-ros. The exact output of the plants is not knO'wn but a s little is distributed locally, it coul<l. be assumed that local production is just a little more than 55,000.000 kilos, the average of exports during tbe last two years. Latest local quotations of rcfined sugar varies from P6.10 and P6.35 pel' bag of 100 pounds, Molasses and Alcoltol.-These two products are inv.:\riahly linked. Mol a~ses as a hy-prC'rlllct {)f t'he cent rals, form the chief som'c<! of matp.rial in the manufacture of alcohol in the Philipp ines, During the last two years, 1935 and 1936, out of an average yNlrly p rod uction of 6[',9(10,000 proof liters of alcohol, 65,500,000 proof lit~rs were produced from 91,400,000 liters of reolasses. The other raw matc.riab u sed wel'e mOl"tly coconut and nip:l saps. The 6!'i,500,000 proof litel'S of alcohol produced yearly from molas';('s at PO,05 per liter mean a yearly income of about 1'3,2.75,000. Thel'e arc at l)l'Csent in ollcration in the entire country 70 registcl'pd disti IlCl·ies. 10-1 of which are located in centrals. IIlYle~d the manufacture of alcohol in centrals is one efied of the constant feal' of the opemtors regarding the fa te of the sugRr industry. A cen trnl with a .l!'l"inding capacity of '3,000 tOilS of cane per day, operating dUl"-

THE COMMERCIAL & INDUSTRIAL MANUAL

226

ing 120 days per anm1m, can produce 648,O()O gallons of motor fuel which at PO.25 pel' gallon, will yield a gross inconl(~ of f'l62,OOO. Con!ectiollel·ies.-Thcl'C arc only 3 large candy or confectionery factories in the country but there

ippine sugar cane products during the last 10-year period, 1927-\936. with the percentage corresponding to the United States al'e shown in the follow_ ing table:

are many medium and s mall one!; and numerous household confectioneries. One of the largest factories here consumes about 2,000,000 pounds of sugar per annum representing 70 per centum of the materials u sed.

Phili1)pine E xpoJ· t of Sllga,' Come Products

Philippine confectionery factories arc very recently established lind, thcrefOl:c, their equipment and machineries are of the latest designs and makes. Other

SU{j(u'

Cane

p,.odnr.fs.-.Although

the

manufacture of glassware nnd fertilizers 1'15 byproducts of suga l' cane (fl'om the bagasse) i~ a recent innovation, it is hound to grow in importance, becau se it is profitable:, According to a nrominent local industrial engineer, a centl'al with a grinding capacity of 360,000 tons of cane per se,\son can also manufacture the following from the I;esulting bagasse; Fcrti liw (8--4---0.S). GI ..... 1.718

..,c.

~.«JO

.on., at

<0<1. , . I"'s.

1"70"

J'ZH,COO 120.9tO

III,-CoNSUr.,PTWN The consumption of sugar in the Philippines is nominally estimated at 145,000 short tons equivalent to a per capita consumption of 21 pounds 01' about 10 kilos, Even if it is taken fo1' gl'anted that sugar consumption in this country may be so stimulated as much as 145,000 short tons of centrifugal sugar may be consumed, there will still be available fo r export ab l'oad 1,355,000 short tons of sugar placing Philippine production in the nor mal milling capacity of th e existing centrals at 1,500,000 short tons. On the basis of a reduced actual pro(hlCtion of over 720,000 short tons as in 1935 and with a total consumption of 145,000 short tons, there wiJI still be available for export abroad 5"75,000 short tons. The total sug:ll' export in the same year is only a little over 530,000 short ton s. Considering th~' ecor.omy of th(" Philippine sugar industrv at all ang~p.s at !eMt about 500,000 short tons of suger mu st be exported yearly, in order that the industry mig ht survive, IV,- TIlAnE Philippine Expol't (If SII!lUr Cane PI'odJ(ctp.-

The average vahl(>S of yeal'ly exportation of Phil-

Sbu. of U"i .. d S<l""

Produc..

Sull"' ...• MoJ. ..u .. AJe<>bol··

G .. nd To,.I··

TouL Vilu,

l'I 07.l«).&)~

610.976 177.H9 1"108.148.'119

v.)""

1"106.41U80 )18,l8O

n.S6S )'I06,761.421

'"'-' ~HI

It goes without saying that Philippine expor t sugar is produced exclusively for the American market, whi le on the other hand molasses and specially alcohol find good markets in other coun t ries. Philippine molasses is expor ted principally to J a4 pan, China including Hongkong and t he Brit ish East I ndies while appreciable quantities of alcohol find their way to China, Siam , Japan and the Dutch East Indies. Talk of potential other markets for Philipp ine suga'r is now hushed by the recent London Conference. However, even without the London COIIference, as aUented by the fact that with unlimited opportunity during nearly two decades, the Philippin('s failed to n-:ake any headway in marketing sugar outsirle tile United States, But of course this is to be 'expected, Local methods of p roducti.m are patterned aftel' those of the U nited States, T he costs of production here are even higher than those of Cuba and naturally much higher than those of ,lava, And these two cou nt.r ies can easily supply the world '~ d('mand.

As a matter of fact but for the Flag Law and in spite of tariff barriers, J ava sugar can even undersell native Sligar locally, The mere thought 01 p r evailing sugar tariffs of potential fOl'cigr.. sugar markets is discouraging, The following are some examples : CbiDO.

J.po .. &i.i,b IncH., Umi"d K,,,,J olII'

1'1.ZI

1"4 .~

, .~

'n , .~

Philippine bnllo)'ts of SlIfjar and I ts Denvatives a1zd Related PI·oducts.-The average values

of yearly impol't.'ttion of $u~ar and its derivatives

PHILIPPINES and related products during the 10-year p~r.;od, 1927-1936, with values anu percentages cOI'respond. in/;' to the t'niter! States shown in the following

table: Philippille /1);PO)'/s 0/ SugaJ' and' Its Deri'IJat!:ves fwd Related Prodllci s Shu< 0/ Uo,,,d 5, .... Prod",,,

(.oaf..:!!",,,) .IId

H_r·

Sr''''''

~.ndi,.-·

., .

\\"G", ClC. (1936,.. ..

$upr.nd M"I."",' V, ••, .. ' GI. .......

To"L

\'.J~,

\',1", ~9}.796

6SMSS

7,On ""J,27},S)4 HO,U>4

6,2% )H,910

16,4i6

}O1.9'1l 1),418

l.~.Oll

6().1,126

81.10 ~ , OO

It is quite obvious that with the exception of

glasswa re and spirits, wines, etc., the United States pmcticatly controls Philippine imports of products identical to those of ~ugUl' cane and their derivatives and r elated products. Glnsswarc comes principally from Japan, Uni\cd States. Belgium, Czeehosillvakia, Gerlllany, Ohina, and Fmnce. Spirits, wines, etc., come from G:'ea BI'itain, Spain, Germany, Italy, and France. 11he other Ciountries SUpplying the Philippines wit~he other imports comir.g mostly .'rom the Unite States art; : for conjectionery and candies-Chin , Great Britain, Japan, Spain and Switzerland; for sugar and mol8!1s(>l;,- Hon:;l;ong, Brit;sh li:aslt Indies, Gre,\f Britain, Dutch Indies, and China; and for vinegar -China, J R.pan, Spain and Germany. Because fertilizers (now manufactured as a byJ)I'oduct of sugal' cane) have been taken up in the second article-·The Coconut Im!ustry---of; this series, they are not cOT!Ridercd (although a proper entry) in the li st of imports in this article. V.-nI:lAL U.

S.-P. L TRADE

ippin<!s is about 1'50,000,000 only. F or ty million odd p<!sos should be creditcd in favor of the United States in the following manner; ( I) Tb. ,b.u of ......"'ua."..,... d ,., .... '.a',,!, .nJ pi"""";",, U> ,be ,b'p""nu of ,",., ' 0 ,h. Ua ... d $ ... , ... n", .b",,14 'W" b< lu. ,b.o 1')6.ooo,OIX) ia •• 1., 1eo,I,. (1) If ,b, ,.,., .h,p""o," .10<1, to 'h, U...,d S,.... Io.dcd ," ......... bo"o., •• h. ("j,b. ,,'ould ......... 0 I>IO.OIX),OOO , • .,.1,. ' ( J) If ,b. ,.",uoc< io ,b, ,.," .b'T"'.' '0 'h, U...:d S........en: h.ndbl by "'''«>,",0 "''''r'o>< •. " would "".n OOer 1'600.000 '''':0'''' /0. 'b: i •• ....-.ncc

.bou.

BALANGE

If refere:lce is mnde again to the tables pre· scm ted in this report on Philippine ex ports of suga r cane products and imports of sllgal' products and their derivatives and related products, during the last lO-year period, 1927-1936, it is noted readily, t.hat in the purc <!xchanee of products, the Philippinc.s has virtually all the advantagc over the Unit<!d Stau>s, enjoying the tremendous favorable balance of PI 04,000,000. Considering, however, th<!e principal factors that al'e involved not only incid<!nt to the coursc of traIling but abo to the peculiar political association of the two countrie!<, it will inevitably be rMlized that. the net balancc in favor of the Phil-

"'.f<

..."'p""....

(~)

... , ohiouoJ,.lI ,h'Tm,"" or ",oJ.,,, ''''f'O<"J f'.m .11< U.i,cd 5 ...", "" ""i,4 I ......." ' " . bono., • • nd ' •• ",cd ,. "' ..,,,.. n 'lI>u"au ,o"'P"''''. 'he (,,,,b, ,hll," . ad ,.'.Unce T""".nu, wh,1e .b.y .,., "",.." ..... ,0' co",,,. the Pb,hPr'"' ,ull, p.y /0' [h ....

())

"If=~' [: fJ~,~:l'S:::,~1 ::J~,::~b~.I! ; ~:~o ';~k:"~~;;,~~,~~~ ,'.~~~~~,~

,,~

89 .• 0

17 .60 70.10

227

'0'''""""

• " .. I, v,lu, of ,bou, 1>4.01X).OOO. (6) Te. pcr ""'.", PC' ,nnUrn ,h"uld b, chll'. 0. 'hc COlt 01 build,", ",... ".10 lad ",.. h,n,,,,, ."d .od ,"".!l.d ,n [b •• u, .. d 'h<

'"'''(I'

«.".(0 ••

lJ~~,~dIS~:[~~:o.~:,~ ~~'I~r';"<n:~!·~<br~~,:,~;,'~·~.~;'~~:!.':~~~·!'~:m'~i

1'1.000,000.

T he balanct' of 1'50,000,000 accruing the Philippint's in its sug'ar trade in the United States, should be easily checked by Amt'rican favorable batanc<!s in the trade of other commodities. F or example in the CRS<! of tobacco products, the United States enj9yed a favorah!<! balancl< lIf over P3,300,000 (luring the last two Y<!ltrl;. Effect of U. S. Duty fill SI/{/QI·.-Thc application ()i the A~<!rican wO"ld rate on sugar at 1.875 ccnts per pound or P5.2G p<!r p icu l. wou ld close the Americfln mr.rket to Philippine Sligar and thus bring about a collapsc of tht' sugal' industry. T lJe Eifet1l of U. S.-Cuban R"ciprocal TI'ade Ag recment.-This agreement which became effective in September, 193,1, made the mt~ of duty on Cuban sugar, 0.9 cents or 1.8 centavos per pound with the understanding that on the date of the exlliralion of tl>e Jon<!s-Costignn Act, that is, in December 31, 1!)37-lml<!ss fmth<!r extend<!d, the rate will revert to 1.5 cents 01' 3 ccntavo~ per pound or P4.15 per picul. The danger of this agr<!(>ment lies in the fact that should it continue indefinitely, it shall be instn.lmental in baning Philippin<! sugar from the United States the moment the McDuffie-Tydings Law export tax provisions go into eff'~ ct beginning the 6th year of the Commonwcnlth. At present the total delivcl-y cost of Philippine sug;u' in the United States is 1'7.59 pel' picul while that of Cuba is P5.35, so th&.t our cxcess over Cuba is P2.24. Cuba's ]Jaying a duty of 0.9 cents ncr pound 01' 1'2.51 per picui, howe\'er , giv('<; to the Philippines an advantage of PO.27. Rut on tht> 6th year of the Comm{>nwealth, payment of " 0.2625 duty per picul will cancel this ndvnntage.

THE COMMERCIAL

228

Effect of il1cDllffie.Tydh,ys Law &l;1)Ort Taxes OJ~

Philippine St!Qal.. --A:)plying on sugar, t he pro-

visions of this Act, imposing export taxes from t he sixth to the tenth yea I' of the Commonwealth commencing at 5 % of the full duty fixed by law in the Unit£'d States in the si:tth year to 25 % in the tenth year, and thereafter 100 PCI' centum, the Phil ip p ir-es shall pay t.he following on sugar shipments to the United States: --------;-----;-~Un"<d Y<~r

of Common,,"c>hh

«".

P<r on world , ...

71h .• 8<h.

9tb •. lO,h . . Tb<<<>h~; :;'

Also, effective

" ,.,""" ~ter

$""" D. u;••

Pet Pound Uni,cd S..... «"tI

o 0917j o ISn o 181U

G 17S

0 .46875 I S7S

1'" pound

P"".

I' O. l62) ~lSO

. 787S

""" """ 1 .}111

the date of the ina ugura-

tion of the Comlllonw(lalth, in accordance with this Law, duty free Philippine sugal' was limited to 50,000 !onl:" tons refined and 800,001) long t\,ns unrefined or n total vf 850,0.00 long tons of sugar.

It would be possible f01\. the P hil ip p iu<!s to export sugar to the UJ'!.iteri states clt!rir.g the dUl'ation of the Commonwealth but for the preferential tariff enjoyed by Cuba. I t is already point ed out that the 9resent Cuban pl'efc:rential of 0.9 CE'nts per pound is enough to close the market on thn sixth year. FOl'tunately this rate is tempor aty and it is hop!'"d that it is not extended when it expil'es at the end of t.his yenl". The limitations of the law are actually causing disturbances in the Philippine sugar industr y becallse they are very much below the l10rmal crop at the timf) the law wn1; enacte\l

Relntion oj Phili1)pine

SltgC11"

to Americ(m C01!-

I>lHIt1,tion.- I ncompicte reports pllbJished in the 1935 U. S. Yeal'book of Agriculture poiot to the fm:t. that in H134. out of a total receipt of 4,564,41 ~ short tonfl of c:tne sugar, the P hilippines supplied 26 pel' centum only. Howevel', according to Wi!let and Gmy's Stati stical Sugar Journal, on the basis of 1933 complete statistics, although t he Philippines supplied 1,241,000 short tons to the sugar consumption of the United States, it represented 19 per centum only of the total. vr.-CONCLU SIONS AJ'D RECOMMENDATIONS

(1) The application of American tariff duties

on P hilippine ,sugar will close the only market pro-

INDUSTRIAL MANUAL fitable beeause t he cost of p r oduction in t he Phil_ ippines is h igher even than that of Cuba; the latter country whose sugar is the only menace to Philippine sugar in the American market, enjoys a nother vital advantage, that of dis{a.nce. Con sequently, the extension of Cuban preferential tariff teo Philippine sUJ!ar (a~ h inted recently), will not hel p in the least at all. T h en, too, because of l)l'ohibitive sugar tariffs of other potential markets (collntr ies), th e Philippines will not h avE' a n y more sugar exp01-t trade. As obvious r esults of the loss of the Amet'icnn market on Philippine econ omy will be t he following:

i",

(.) T h, poleh .. pow<fof ,b, ,OO"''1wili be reduc<d .oon.·b.!f of .h'p,..,n', (b) Th. H.dihood of 1,600.000 Filipino. d'p<od,n' upon .h. ind ... "y ,,.iII be

.If.,,,d.

«) Th, Philipp,., Co."..... , will 101< 1'16,000,000 of ,,~<n"' y..,11.

Being ve!'y ,young, t he P h il ippine sugar h as not as ~'et ::.'ully recovel'ed t he capital invested in it so t hat in a ll fairness, the limitation s imposed on export.; during the Commonwealt h be either moeli.f ied or !·emoved. The P hilippine Suga r Association is a!;king on ly for a slight increase of 244,OSO sh01't tons raw value. T he total of 1,200,000 short tons l'equested is still much below Philippine nor mal production. (2)

i n d\:st~,

(3) Because of pr eferen tial sugar tariffs enjoyed by Cuba where the American f lag does not fly, Philippine sugar should be exempted f l'om tnt! graduated export t.'lxes imposed by TydingsMcDufiie Act. (4) While it is tl"lle t h at the Philippine sugar trade. represents an unfavorable bnlance for the United States, this unfavorable balance, however, is checkp.d by favora ble balances in other commodi ties. Besides, the United States, not bei ng self-suffident in sugar produetion, can p erf orm another altr uistic act by mai n ta ining the present" trade arrangement in P hili ppine sugar, even after independence, inst.ead of obtaini ng sugar from other coun t r ies.

VII.-AcKNOWJ,EDGMENT I\'[ ost of the datu and facts embodied in this article were compiled f r om the reports of t he P hilippine Sugar Association, the Statistics Division of the Departmen t of Agriculture and Commerce, and the Bu r eau of Customs a rtd Internal Revenue.

PHILIPPINES

229

PROBLEMS OF THE PHILIPPINE SUGAR IN DUSTRY NEED FOR COOPERATIONHE SUGAR INDUSTRY WI LL GIVE ITS FULL BENEFIT TO THIS COUNTRY only when the relationship of the sugar central s both with the pInntcl"S and with labol"ers is based upon just and equitable principles. We should never forget that the central s, the planters and the laborers arc intimately linked by a common interest and that harmony, coopera· tion and goodwill arc the only true puth to the prosperity and the enjoyment of the benefits dC I·jved from our common efforts. I take it that the main purpose of the Association i!l to unite and establish cordial relations among all those who are consecrated to the sugar industry and &griculture. To make th is aim a reality, we should at all times delll justly with all those who colabo]'ate with us in our task.

TO BE SURE, all a nd evel'y one of the Philip. pine Sugar Association entertain this sentiment. They are, ther efore, not only interested in the weB being of t he centrals, but also in the welfare of the planter s and the laborers. According to the anmml report of the- Secretary-Treasurer, 90 pel' cen of the income of the • BI/ JU, .... E.. Avas,s, Irorn ~ ,p~h before till' Philippine Sugar Auoci~tio". reported throu",h "~mrnercc ' lidu~try Journml".

""u

Association, which is exclusively f inanced hy the SUgSl' centrals, is devoted to experimental work. Tnere is also a keen rivalry bl!tween the associated central s to improve the standard of living of their employees and laborers, furnishing them with homes. light, water, and hospital, organizing clubs and building gardens fo!' them, in one word, giving them the comforts and the enj oyment of life according to tJte standard set by American civilization in these Islands.

RUR AL TRANSPORTATION 0-, SUGA~-CAN.

230

THE COMMERCIAL & INDUSTRIAL MANUAL

But this is not enough. We should keep on studying the ways and means of improving our relations with a view to making them happier, more stable and morc endul'ing. I am sure that

with your cooperation and good-will we will see in the near future the realization of OU I' present efforts. And the sooner this is done the better would it be fOI' a ll of us.

THE PHILIPPINE SUGAR INDUSTRY ' T I S now seventeen years since the modernization of the Philippines sugar industry became effective on a large scale th rough the cooperative efforts of centrals and planter s, resulting in the transition from the production of low-grade muscovado sugar to the manufactUre of centrifugal sugar by modern mills. According to t he statement of the Governor-General in his cable to the Secretary of 'Va!' on September 8, 1934. sugar prodllction in the Philippines was definitely stimulated by the action of the U. S, Congress in 1913 when it removed the limitation of 300.000 tons per annum contained in the free-tmde tariff law of 1909. At first this legislation had little effect due to the p~'ovisions in the U. S. Tariff Act of 191 3 placing sugar OtT the free list three years subsequentl y. Philippine interests early realizing their inability to compete with Cuba should the United States decide to establish a free sligar market. BY CONGRESS IONAL ACTION in 1916, was repealed, thereby offering producers in these islands an unrestricted and tariff-prothe duty-free provision O~he 1913 tariff act tected market in t he United States, This was -S upplemenl"ry Brief ~" of Sep ",her. 11)37, ~ ub",iltc<l b.,' I he l' hilippine !""II'" A~soei"l io" before he Joint l'repnrlltory Com. the essential stimulation necessary for the demittee or I'hill1l!);n" ..\If~i t,.

SUGAR IS PROCESS Of M ... ...:U' ... CTI.I"B

PHILI PPINES velopment of sugar production in the Philippines, and resulted in plans for the enlargement of the cxi!;ting centraJs and the construction of 71CW onc!' to replace thousands of muscovndo mills. The iirst sugar centrals wcre established by private car,ita! between 1910 and 1913. In 1915 the Philippine Government, on the recommendation of the GO\'l'rnor Genel'lIi, estahlished the Ph ilippine Sugar Board for till:! purpose of promoting and encouraging modern sugar production in the Philippines. The Govermcnt, through the Phili l}pine National Bank, then pI'occeded to loan government funds 101' the establishment of several large centra ls, nnd to ,gl'ant cxt~m!iive crop loans to planters, Despite these stimulations and inducements, 110WeVel', Philipp ine fi nancial inteloests did not <'ngage extensively in the sugar business, as ther might hnve done, and the production of centrifugal sugar did not make any noticeable progress untit four of five yenrs Inteloo The governmrmt.financed bank centrals did not hnrvest their first crops until the cady 1920'so Eventua~y, as a result of th~ friendly ottitude of the Umted States government :lnd ih(' gover nmental action encoUloaging sugar Ilrocluc~ion in the Philippines, private capital entered t.hc field on 11 more extensive scale, resulting

231

in the establishment of some of the largest centrals on Negros and Luzono However, there was only a gradual increase in sugar production, despite the tariff-Inootcded market in the United States, as shown by statistics of annulll crops from 1912 to 193!. The IUloge increase in production in the years 1932 to \934 was due to the exceptionally favorable weather conditions which prevailed during the gloowth of the cane, improved valoieties of cane, better cultivation, greater knowledge of the pr{)per use of fertilizer and a reduction in the aloea of the land fallowed annuallyo 1932 marked the year in which the tloans formation of t he industry was vilotually completedo Another factor of primary importance WllS the introduction of the Timberla~e resolution early in Hl28 and its reintroduction in subsequent yearso The approval of the HareHawes-Cutting Low, with its qUObl provision on the basil' of lu"oduction in prc.:'eding years quite natUloally stimulated Philippine sugor planters, who had already staked their fortunes in the industry, to increase their production to the limit in an ulten)pt to increase their percentage of the total plooduetiono As a corollary the Centmls, through their contractual obligations, were forced, al heavy

SUOAR CAN!! PL .. NTATION

232

THE COMMERCIAL & INDUSTRIAL MANUAL

additional expense and in some cnses reluctantly, to increase materially their mill and transportation facilities in order to handle expeditiously the larger quantities of cane delivered by their respective Shal"C planters.

Nor-mal Millinu Ga1Jacity. The aggregate capacity of the forty-six sugar centrals in the Philippines is approximatC!ly 88,160 short tons of CRne PCI' day. During a normal milling sca!>on of 150 days, these central s arc capable of grinding 13,244,000 tons of canc. With an average recovery of 8.83 tons cane to ton sugar, these Centrals can produce a normal crop of 1,500,000 short tons of sugar.

Personnd: During the 1934 milling season, the centrals' employees, laborers, and their families numbered approximately 150,000, while sugar planters and the\!' dependents numbered 90,000; tenants and su b~tenants, known locally as "inquili~ nos" or "kasamas", 1,050,000; planters laborers and their families about 610,000, miscellaneous em~ ployees of agents, dealers and merchants and their families 100,000, making total of 2,000,000 people directly or indirectly on the sugar in~ du stl'Y.

On the 48 Philippine provinces with a total population of 12,664,850, (excluding l\lanila), the sugar districts of 17 provinces, with a population of 6,915,000 are being served by 46 sugar centrals. It is conservatively estimated that about 29 % of the population of all the sugar provinces, Âť1' 1,995,~ 700 people, are directly 01' indirectly dependent on tile industry for their livelihood, which cOlToborates the estimate made in the preced ing paragraph. Sala,1'ics atld Wagcs: From actual statistics COMpiled b~' representative sugal' centrals, it has been EsLimated that the total sum of approximately $6,000,000.00 was paid by the centl'als for salaries and wages of their employees and laborers dUring the 1933-34 crop, at the rate of .186 cent per lb. of sugar produced during that crop. It is conservatively estimated that the planters' expenditures for the wages of their laborers in the production of cane will approximate this rate, so that another $6,000,000.00 must have been paid by planters in wages to their laborers. which means a wage total of $12,000,000.00.

Materials Used: Also from statistics compiled by these representative centrals, the total expenditures for materials used was placed at 0.24 cent

NATIVE MBTIIODS

PHILIPPINES pCI' lb. of sugar manufactured during the 1933-34 crop, or more than $7,500,000.00 for the 1,578,000 short tons made. The foregoing figures indicnte that, on the basis of the 1933-34 crop production, the outgoings fol' wages and materials alone would approximate $19.500,000.00 pCI' annum. Melasses Q.1Id Alcohol: According to the statistics gathered by the Philippine Sugar Association, the molasses production in the Philippines for the last eight crop years was as follows:

233

also been constructed, It cannot be denied that the establishment. of these distilleries has prov_ ided employment for a lal'ge number of people.

H,lOO,oo

According to the Collector of Internal Revenue, the quantity of alcohol distilled in the Philippines for the same period amounted to about 403,000,000 proof liters. The value of this distilled alcohol at the rate of 2.5 cents pel' proof litel' t'epresented $10,000,000, equivalent to an average annual income to alcohol producers of about $ 1,250,000.00. In passing, it may be stated that the taxes collected on di stilled alcohol for the sn me pel'iod under t'evi ew amounted to more than $11,500,000, equivalent to an average annual income to the Government of more than $1,500,000.00.

011 the assumption that 6070 of the molasses pl'(lduction is either exported foOl' conversion abroad into alcohol, or used for fuel and cattle feed locally, the value of molasses utilized in these ways during the 1933-34 crop at the estimated average price of 2.9 cents a gallon representcd an annual income of $1,108,250.20. In a numb!.')' of the suga centl'als distilleries for the conversion of molasse, into alcohol have

Cost of PI'oduction; I n the report of the United States Tariff Commission on sugar to the President in 1934, the average cost at factory, including imputed interest, fOJ" the Cl'Op years 1930, 1931, and 1932 was 2.326 cents a pound, while the average total cost at the United States Atlantic ports, including imputed interest, for the same period was 2.717 cents a pound. Taking the resuJts by crop yeat', this repol'l shows that in 1931-32, the

1916-19 'm-~

mO-)I . 1911 -}!

n.lOO.ooo

19~.OOO

1912- U .. UJ}- 14 â&#x20AC;˘â&#x20AC;˘ 19l4-lS .

~7.8JO. OOO

19))-)6

)2,400,000

........ .. S4,;9 .. ,OO 61.691.00 16.~S4$1

N"TIVB MBTHODS

234

THE COMMERCIAL & INDUSTR IAL MANUAL

total cost of suga )' delivered in the Uni ted States was 2.410 cents pCI' pound, of which 0.598 cent a pound l'epresented overhead expense and 1.812 cents pel' pound was operating costs. While the operating expend itures of 1.812 cents a pound may be taken as a fairly constant expense, so long as the volume of the annual crops does not vary, t he most important item of the total production cost is the overhead, the unit cost of whi ch varies inversely with the volume of production . In estimat.ing the overhead expense for su bsequent crops, which wi ll approximate in volume that of t.he 1931-32 crop, we can employ the rate of 0.598 cent per pound, As a r esult of the drastic limitation, sugar production in the Philippines during the 1!134-35 season was very much less tha n the avemge production for the three crops of 1929-30, 1930-31 and 1931-32, and the unit costs for the 1934-35 production al'e estimated to be lllateriall~' higher than those of the above three crop yea)'s, The unit costs for t he 1934-35 crop are estimated to have been 54 per cent in excess of those for the 1拢131-32 erop, which would increase the estimated unit costs to 3.709 cents per lb, This would mean an increase of 1.299cents per lb. over the unit costs for the~931-32 crops, On the basis of 694,606 short tons, which was the pl'oduc-

tion for the 1934-35 crop, this increase of 1.299 cents per lb, in unit costs represented a diyect loss of $18,000,000.00. InvestmelltR ht the I ndustry: One of th!! unique features of the Philippine sugar industry is the relationship between the planters who grow the sugnr cane and the suga r cenh'als whi ch manufacture the suga r on a s hare or toll basis. Unlike the situation in other count.ries where t he centrals control t he sugar production, in t he Phili ppines t he planters control the g )'owing of sugar cane. The basis of the cooperative system of growing sugal' cane in the Philippines is the milling contl'act which generally runs for thirty years, Under the contrac: signed by the individual land owner s and the centrals, the planters obliga te themselves to g r ow cane to be milled by the central, while the central furnis hes trallsportation for the cane and converts it into sugar. As a general rule, the planters give the Central , free of charge, a right of way across their lands for railway constl路uct.ion j they also guarantee to use for cane cultivation a s pecified minimum pl'oportion of their land-usually 50 %durinlg the term of the contract. As the result of this cooperative system of sugar pr oduction in

SUOAR IN P "OCIISS 0' MANU'ActURB

P HlLI ~P[NES

235

-----~=:..:..::==-~

toe Philippi nes, relieving the plantel' of the worry and expense of grinding his crop, the increased opportunities provided by the U. S. Congress and t he American administration in the Islands for the expansion of tht!il' industry l'csulted in gl'cat strides b<!ing mnde by the planters. They incr eased their unit yields per hectare through im proved methods of cultivation and fertilization and the introduction of high-yielding a nd disease- resistant cane var ieties, etc. To cope with the incr eased tonnage of cane, the centrals weN compell ed to increase the capacity of their mills until :11 1933-34 season the total milling capacity of the sugar centrals exceeded 88,160 s hort tons of cane pCI' day. It should he pointed out that the stimu lus to the Phi lippine s ugar indus ti'Y of it la r ge protected market in the United Stales has benciited the Filipino planter a nd hi ~ agricultural la bourer s to at lea st as great an extent as the shareholders in milling companies, Taki ng a n avcrage "Xicld in pre.central days of 1.l 3 short tons of muscovado sugal' pCI' acre at, say, $32,27 pel' short ton, the gross annual income was $36A6 per ncrc, out of which thc planter had to provide for the ltctunl manufacture of his suga r -a considel'ablc item in his total expenses. Now-

adays, the same man should produce 2.82 short tons per ncrc, of which l. 41 or 1.69 short tons pertain to him, valued todny at $75.88 to $91.05, without the cost of milling his cane. If Philippine sugar were placed on the U. S. full-duty list, the prob. abilities are that it would be sold mainly in countl'ies other than the U. S. and would decline in value to about $2l.54 per shol路t ton. ~ Apart from the fact that many centrals would be unable to continue to operate on this basis, thereby removing the milli ng facilities now enjoyed by the fa r mers in their districts, the hypothetical planter mentioned above, with a production of 2.82 short tons per acre, would have his gross !'evemle reduced from $75.88/$01.05 to $30,35 per acre. With regal'd to t he Fili pino ngTiculturallnoorer, t he benefit of im proved pr ices for P. I. sugar has resulted in considerably higher wages being paid. T wenty-five years ago these lnborers wel"e paid about 12-1/2 to 15 cents, whereas they now rret 30 to 50 cents per (lay. The investment!'; in th<.' sugal" centrals. alone upto the yeRr 1934, including plants, equipment Rnd impl"ovements exceeded $03,000,000.00. Since the depl"eciatHon on these investments vades accol"ding-

(1.1.\路 ... 0 SUOAll CIINT ..... 1. Co., INC., M ......,o CnlT..... 1., Dec.

N~o .. os,

P, L

236

THE COMMERCIAL

to the degree of efficiency and the financial basis of each Central, the requisite data concerning which are not available, it is impossible to make a reliable estimate regarding this detail. The 1932-33 crop data on cane areas compiled by the Philippine Sugar Association showed that approximately 551,000 acres were harvested during that crop year, yi elding a production of about: 1,264,nOC short tOM, equivalent to a unit yield of 2.29 short tons of sugar p C I' acrc. Of the 865,000 acres of "cane land" about two-thirds are planted. Investments in Cl"Op loans have been conservatively estimated at $22,500,000.00 annually, while miscellaneous investments by sugar dealers and agents amount to $5,000,000.00 annually. These various investments are tabulated below: to cane each yeaI', the othe l' third being fallowed. The estimated aver age value of the investment pel' acre is $122.00 witti improvements, houses, work animal s, implements, e~., on which basis the total value of the 865,000 acres is approJlimately $105,000,000.00.

c.••

I" .... ... ... io n t... . .. " ..........$ 93,l:iO.CXXI.OO I. . ....."'.. ,. r..d, •• d ' ...pton ........ .. $r ~.(I() pc-• • tt . ......... . 105.0c0.CXXI.OO Aa . .... I . d.aoc.. for ttop lo. n•. • p.r' of .. hich , liquid>t<J " tb 1"" 1l.)OO.CXXI.OO M;KCU . ...... ; •• ~,(X)D.CXXI.OO

0........... .

Sll~.7SO'OOO.OO

Of these investments approximately 30 0/" is American. Su gar E xpo I·ts to the United States: In view of the duty-Cree privilege enjoyed by Philippine sugar producers since the inception of free-trade relationship between the Islands and the United States, Philippine sugar has found its only profitable market in the United States. Bcfo;r e the establishment of U. S. protection, Great Britain, China, Japan, Hongkong, and the British East Indies shared a considerable portion of Philippine exports, that of the United States ranging from 40/0 in 1900 to 35 0/" in 1908. The fre e trade supplemented by t ariff legislation in the United States, with incr ea sed protection to Philippine sugar, has diverted Philippine exports to the United States with the result tha t since 1928 virtually all Philippine sugar has been e xported t o that country. Since the market s whi('h took Philippine sugar prior to the extens ion of the U. S. protection have been lost to other low-cost sour ces of snpply, sueh a s Formosa end .Java, t he are no longer available to the Philippines, except on terms impossible of acceptance by the Phil ippi ncs, whose cost of living has been

INDUSTRIAL MANUAL so raised by American influence that production costs have inevitably increased to levels far above those of the nearby countries mentioned. Another factor in closing the markets to Philippine sugar is the greatly increased dutics which these countries have imposed .... Marketing Methods : No l'epOl't on the condition pertainillr,' to the Philippine sugar industry would bc complete without a r eference to the circumstances which necessitate the shipment of the bulk of each crop dUring the seven-months' period from December 1st to June 30th. As has been explained heretofore, the production of centrifugal sugar in thc Philippines is a joint undertaking by the planters (who grow the cane) and the milling companies (who tUrn it into sugar). The result is that the disposal of more than half the Philippine sugar crop is in the hands of planters (a large proportion of whom are small producers) who wish to sell their sugar whenever they consider it convenient so to do, thereby preserving for themsclves the inalienable right of an individual to dispose of his own pl'operty as he deems convenient. In actual practice, this state of affairs result.<> in large quantities of P. I. sugar being offelied for sale in the Philippine market whenever there is a rise in U. S. prices and, as most of the financing firms' crop loan agreements give planters the right of disposal of their sugar up till June each year and at the same time compel the financing firms to take the sugar over at the market price whenever the planter wishes to sell, it is quite impossible to regulate the sale and shipment of Philippine sugar. . . . . Another difficulty which presents itself in this connection is the exposed location of many centrals' shipment wharves, from which it is impossible to load steamcrs e)(cept during thc northeast monsoon period-mostly between Dccember 1st and April 30th. The!ce wharvcs, although protected from north-east winds, are completely exposed during the south-west mOl'.!<oon, which is accompanicd by heavy rains and iu'Cludes the most dangerous part of the so-called typhoon season. As a result, it has been the practice for many years for the shipment of P. 1. sugar to be made during the (mainly dry) northeast monsoon period, which coincides with the milling season. Milling companies' storage accommodation has been based on this practice and is inadel1uate and unsafc for the warehousing of large quantities of s ugar during the rainy months.

PHILIPPINES Even if it were possible to persuade planters to dispose of their crops gradually heavy charges would be incurred in moving a large proportion of the sugar from the exposed shipping points to ports where it could be handled at all times of the year and in storing it there for shipment. yet another serious disadvantage in the gradual, or so-called "orderly," marketing of P. L sugar, as compared with the produce of Hawaii, Puerto Rico and Cuba, is the distance between the Philippines and the p ri ncipal U. S. (East-Coast markets.) Philippine producers are compelled cithel' (1) to sell their sugal' for shipment, i. e., 2 to 4 months before the due delivery date in the U. S., or (2) to ship it unsold and risk a decline in prices during the voyage. I t is far easier to adopt an "orderly" marketing scheme when the voyage-distance between the shipment and arrival ports is a matter of seven days instead of seven weeks. Criticisms have been levelled at Philippine producers in this connection bU~ a careful study of the conditions under which the ISJands' sugar crops are produced, f inanced and handled must leave an impartial observer with the understanding that t he marketing of Philippine suga\ crops cannot be judged by the yardsticks of the othel' areas which provide the United States with sugar. It may be noted from this chart that the marketing of Philippine sugar has been quite consistent for the five yea rs under discussion. Shipments are fairly well spread throughout the dry season and are reduced only when a large number of outports are closed due to weather conditions. It may be noted that some sugar is shipped in virtually every month of the year, indieatiug that in those ports that are not closed due to weather t hey continue to operate to level out the sh ipments of Philippine sugar. Comparing the chart for the Philippines with the other sugar producing areas, it may be noted that in nearly all of them, they have their peaks of high shipments and periods of low shipments. On the whole it would seem that the marketing in the Philippines is at least as orderly as the marketing in other at路eas. Taus paid by Sligar bldllstry: According to published records based on an exhaustive study mnde by the Philippine Sugar Association, it was found that the taxes paid directly and indirectly by the sugm' industry in the Philippines to the Insular Government based on the 1931-32 sugar production amounted to over $10,000,000.00, equivalent

237

to a tax of 0,46 cent pel' lb. on the total production, and to about 43 <"/0 of the Insular Government revenues for that year. If the T.ydings-lI.IcDuffie Act quota, the equivalent of which in raw value has been calculated at 973,000 short tons, prevails during the Commonwealth period, the Philippine production quota after allowing 70,000 short tons for domestic consumption, will be about 1,043,000 short tons, approximating the production level of the 1931-32 crop. It can be calculated reasonably that similar tax benefits would be derived from the sugar IIldustl'y during \the so-called transition period, as was the case during the crop ~'ear of 1931-32. However, the ability of the sugar industry to continue to contl'ibute the same amount of taxes to the Commonwealth Gov(,llIrr:ent dul'ing the lull ten-yeal' t ransition period will largely depend on the maintcnance of the present status quo, excluding the burden of export taxes dUring the last five years of the Commonwealth period as provided in Section 6 (e) of the Tyd ings-McDuffie Act. Effect oj the U. S. Ditty Olt Philil,pille Suga)': From thq foregoing, it is obv ious that the sugar industry is the largest contributor to the national income of the Philippines. For the year 1934 the value of sugar exported, as detailed by the Insular Collectoll of Customs, represented approximately 60~/0 of the value of all exports to all countries. Of the total exports of the P hilippines to the United States valued at $91,843,593.50 sugar (including value of molasses) contributed $65,570,686.50, or more than 71 70. As the sugar exports to the United States from the Philippines during this year amounted to approximately 1,270,000 short tons, the U. S. duty of 1.875 cents pel' pound, which would have been imposed on this sugar were it "full-duty" instead of "duty-free" would have amounted to approximately $47,600,000.00, constituting more than 72 % pet: cent of the total export value of sugar during that year. According to the statement of the American Trade Commissioner in Manila in thi s connection, "the industry could weather the imposition of an export tax amounting to five pel'cent of the American tariff, in the sixth year of the Commonwealth, or 10 percent the seventh year, but it is extremely doubtful if it would be able to stand evon a duty equal to the Cuban rate after the tenth year, and with such an outlook, there would be no ch~nce of new capital coming to the l'~scue. It must be as-

2)8

THE COMMERCIAL Ik INDUSTRIAL MANUAL

s~ ':fled, therciore, ttH:.t imposition of :::ny duty on Philippine s ugar not giving it some prcf.'!l'ence eVel" Cuba, at least for n con siderable period of ,years, would mean the almost total collapse cf the industry, involving loss of investme:lt valued :l.t $82,500,000 in centrals (of which about $21,500,000 is held by American citizens and nC:ldy as much by the Philippine Go\'crnment, through the Philippine National Bank) and loss of tiO pel'cent of the to tal export trade of the countr~."

The American Trade Commissioner as quoted above treats of the industry as a whole. However, there arc actually wide differences between the costs of the different mills and ev~n wider diffcl'cnees between the production costs of various planters. It is probable that all but the highest cost mill!> and planters will be able to survive the fil·st export t::J.x of 5 %. As, however, there are high cost plantors in all districts it is obvious that even the most fortunate distl"icts will be somewhat aifect2d by the first 5 % . Possibly the medium and low cost plar.oors and mills will b::! able to survive the 10 % duty. A few of-. the very low~st might cve~ be ::.ble to s urvive the, 15 % tax were it not that even in the best districts :nany pl:!nters will alrec.dy be eliminated and in thc other districts the planters su rviv ing will be deprived of their milling facilities. Beyond doubt none would survive a further incrcll.se to 200/'0. Sinc2 a very large percentage of the annual crops are financed by crop loans to planters, many of which cannot be liquidated until after 18 to 24 months, there !TIay be a substa..ntial reduction in sugar production in the Philippines two years prior to the marketing of th2 crops which will be subject~d to the U. S. duties 011 their ~rrival in the United States market, owing to the fear on the part of the financiers that the p lanters may not be able to repay the advances in full. It will also be necessary to reduce the ·Central'" cost of production in order to accelcra te the liquidation of capital investments and this reduction would meon a drastic cu tting down of wages.

Unless there should be a s ubstont.ial incr ease in sugar prices or reduction i:1 operating and othel' expenses, there may be only a relatively small quontity of sugar manuf~ctul"ecl thereby defeating the purpose of the e::port toxes and incidentally dest:-oying, within the ten-ye=tl" trar.sition period, :) large part of the industry upo" which the Ph ilip-

pille Government of its revenues.

dep~nds

for u substan tial pOI·tion

The C11ban Competitive Adva1dage: With the inauguration of the Philipp ine Commonwealth on November 15, 1935, it has been intimated that the free enll'y of Philippine sugar into the United States, despite the operation or t he J ones*Costigan Act in the Philip pines, will apply only to 973,000 short tons raw value, the calculated equivalent of the quob fixed under the Tydings-McDuffie Act, and that any execs!> over t hat amount, up to the quota allocated under the Jones-Costigan Act, would be allowed entr y, but only on paymen t of the full U. S. duty. The prllctical effect of this development results in a Philippine quota of 91'13,000 short tons I'UW valu~ annually during the life of the Philippine Commonwealth. Any quantity in excess of the Tydings*McDuffie quol2. could only be shipped to the United States at a heavy loss since it would be s ubject to duty a.t the rate of 1.875 cents l>er poun d. The Philippine quota of 973,000 sho l·t tons raw valu under the Tydiilgs-MeDuffie Act may even 1 be displaced ir.. the American market by Cubnn s uga.r af~r t he fifth year of the Commonwealth, whe:t 5 % of the United States duty will be levied on Philippine s ugar as export tax, as m ay be seen from the followi ng comparative production cost data of Philippine and Cuban sugars, as disclosed by the U. S. Tariff Commission in its R(;port (No. 73. Secon!;! Series) to the Presiden t, covering the crup years of ]929-30, 1930*31 and 1931··32: """ft'I'...,

. .n

ProJ""""" of c.r. •. Pbi!;ppiocs·

C"I0,:·

1).51

PbiUppine u< ..' ov" Cub,· To .. ! eo .. F.O.B. F.e,orv· Philipp-io,,· ... Cub •.. •..• Philip"i •• <>eO<' 0,.." Cub.· Tun. por ... i"" .0 U. S, A.bn"" Pou,· Philippi""· . Cub.: Philipr;~' ,><c .. 0 ....

Cub.·

To .. l 00:1<",,«1 Coo. PhilIpp, ....· .

Cu"'.J'kilipp'o< u(," 0,·" Cub.' ...

."" ,.. '"'M 1).6S

." "

I).IS

'" '"

Thi s ~xcess cost of P hilippine ove!· Cuban sugar i" offset b)' th ~ present duty on Cuban sugar s at

PHILIPPINES thu raw of 0.9 cent per lb., thus cr'!l!ting an advantage for Philippine sugar to the extent of 0.10 cent per !b. Under Section 6 (e) of the Tydings-McDuffie AcL, export tuxes on all Philippine articles ut present favoured with tariff pI'otection in the United States are to be imposed from the sixth to the tenth yenr commencing at 5.,-;, of the full duty fixed by luw in the United States ill the sixth year to 25 % in the tenth ycr;.r.

These export taxes on sugar at the present rate of 1.875 cent per lb. for full duty sugars would be as follows;

y,." , C. ..... ul' ~ 6tll - S%,. j,.. - IO ;t, ... 8"'-U ~

9,h- 20 %

1(\t .. -15 ~G ..

U. S. O"J -i 1.lnl" I•.

o.wmc o 1~1~C

239

s ituation, however, has since been modified by the provisions of the Internationol Agreement on the production and mal'keting of sugar concluded in 1!:l37, under which Cuba's reserve stocks al'e regulated, In 1928 the Philippine Sugar Association submitted a restriction plan whereby the U. S. allotment quota of the Philippines sh culd not be a static figure but be based on a certdn percentage say 19 per cent, of the total consumption of sugal' in the United States, According to Willett and Gray, during the calendar year 1933, the last year of unl'estl'icted production of sugar in the Philippines, the United States derived 19 percent of its tobl sugar consumption Il'om the Philippines.

0 1llSe

O}7OC O.4()8UC

It is obvious that the advanbge now held by the Philippines over Cuba would he equalized as SOOri as it bccomes necess~ry to impose an export t.1X of 5 0/, of the U. S. fuJI duty 2.nd thereafter Philippine sug~rs would sho\" a progressive higher cost over Cuba. The present rate cf duty \ on Cuban sugar is 0.9 e~nt per lb. by virtue of th\ Reciprocal Trade Agreement between the United States and Cuba effective September 3, 1934, and the duty so established will revert to 1.5 cent per lb. on the rate of the expiration of the J ones-Ccstigan Act which has recently been extended to the 31st of December, 1937. The duty of 1.5 ee~t pcr lb. would give the the entl'Y of Philippine sugar into the Unit"ed States would be limited by the pI'ovisions of section 6 (aJ of the Tydings-McDuffie Act, and there would be no limitation on the entry of Cuban sugar, Cuba would presumably seck a reduction of her produc~ ion eosts by expanding her crops, Cuba's maximum annual production prior to hel' adherence to the Chadbourne Plan was 5,600,000 short tons. Under the Chadbourne Agreement this quantity was r educed to as low 3S 2,234,500 shor t tons, By the Jones-Costigan Act, Cuba's quota for export to the United S~tes appro:dm<:.tes 2,000,000 short tons annually, Her surplus sto(;ks, however, were stabilized until recently at about 2,000,,000 short tons at the end of each crop ye~r. Cuba's policy to keep in stock this hug~ quantity of sugar at all times coupled with the ability to expand production on short notice would facilit.'1.te the filling of any deficiency in the U, S. sugar requirements. This the Philippines ha s nn advantal!e of 0.70 per lh., but as

Should the Jones-Costiga:l Act be extended, or some other similar bill establishing quotas for the supply of the U, S, sugar market be enacted, the Philippines will not be faced with the possibility of Cuban expansion of production as long as Such quota system is in effect. Whether the burden of the export taxes will then be the cause of the gradual disappearance of the Philippine sugar industI·y depends upon the trend of sugar prices in the United States market. The purpose of l'estriction was to benefit producers by inducing a rise of prices. The average of duty paid sugar in New York from the 1st of January, 1934, up to the signing of the Jones-Costiga n bill by Pt'esident Roosevelt in May was about 3.05 cents, representing 1.05 cents c. & f. for Cuba. The present value is around 3.40 cents duty paid but, owing to the successive reductions in the Cuban tariff, Cuba now secures 2,50 cents, an incl'ease of 1380/0 as against 8 0/(> for cont:nental and insular sugars. I n addition it might be pointed out that, wherens the Philippines has h:ld a severe cut in pI'oduction, the Cuban quota for the United St ates represents an increase over the amount which was allowed to enter the United States under the Chadbourne Plan. SU.g«T bldustry of l'ita.l Impol't«nee to the Phili1l1Jines; It is obvious that the Philippine sugar industry, without a change in current sugar prices and quota arrangements, cannot combat the loss of the privilege of frce entry in the American market, without drastic reduction in salaries. The disastrous effect of this eventuality has oniv latelv been recognized in the P hilippines, and the following data released by the Governor General in Septem-

240

THE COMMERCIAL & INDUSTRIAL MANUAL

ber, 1934, emphasize the contribution of the industnt . to the material well-being of the COU!ltry. 1t is interesting to r ecord here t hat the fiveyear average production of sugar in the Philippines (1930 to 1934 inclus ive) approximates 1,130,00U short tons, which cones ponds to the 1932 Jlroduction. In connection with t he drast ic cUl-tailment of sugar production in the Ph ilippines, as contemplated in the allocation of quotas under t he JonesCostigan Act, Governor General Frank Murphy, in a cablegram to the Secretary of War at Washington, dated September 8, 1934, presen ted a most able s ummar,y of the case for the industry, s uccinctly supported by the following statistical data· for the year 1932, which, as stated, was representative of the suga .· s ituat ion in the Philippines for the previous five years. "(1) Sugar accounted for 63'( of all income derived from expor t trade in 1932. Remove it from the li st and a favorable visible balance of trade $15,500,000:00 ould have been converted into a negative balance of $44,500,000.00. " (2) The total annual income f rom all sources is estimated at $20,000,0 0.00, suga r comprising nearly 30 '1" of the total. "(3) There are 10 banks ·n the Philippines and in addition 3 private compnnies engaged in agricultural fi na ncing. The t otal loans, overdrafts and advances of these 13 establishments amounted to $72,500,000.00. Of this about $34,000,000.00 or 47 <;., is advanced on sugar. " (4 ) Considering the Governmcnt-owned Philippine National Bank alone its loans, ove.·drafts and advances amounted to $22,500,000.00, of wh ich $17,500,000.0001· 77 '10 is ucivancl:d on sugar. "(5) The Govcrnment-owned Manila Railroad collected $2,300,000.00 as frc ight r evenue in HI::? . Of t hi s amount, nearly $1,000,000.00 or over 40(." was derived fro m handling s ugar. " (6) The Philippine Railways in Cebu , Iloilo and Panay, in large pa.'t guaranteed by the Government, a lso derives the bul k of its frcight revenuc f.·om sugar. "(7) Five of OU1· leading provinces, Occident.1.! Negros, Ori ental Negros, Pampanga, Lag una , and Tal'lac, nre largely supported by taxation from sugar. Extreme withdrawal of thi s support in these provinces would seriously affect the public works and closing of schools." .C" n\' ~rII ;"" froln

ellrrt' ''''}'. o "r' .

"';0::;"'"

1i~1I'~~

fl ~'o-! into dolla r! .

li. S.

Since it took the Philippines from fifteen to twcnty years to develop the Philippine sugar indus try, it seems improbnble that any other major indust l·y can be developed within the ten-year tran_ s ition period under the Philippine Commonwealth without an assured market. Should another such important product be found or should unforeseen improvements in existing industries be discovered, there is no assurance that they would be able to su rmount the tariff walls which would probably be erected against them. That we cannot successfull.y compete with Cuba in the open sugar markets of the world, because of exceptional advantages, climatic a nd soil conditions, is admitted by all authorities on sugar. Potentialities 0/ Domestic COJ!slm~ption: Consumption of centrifugal sugar in the Philippines during the last few years has been nominally estimated at 84,000 short tons. Aside from this, Government statis tics tend to· show that various lowg r a de suga r s increase the total consumption to approximately 145,000 short tons, equivalcnt to a per capita consumption of 21 pounds, During the year 1934 , the U. S. sugar authority ip the Philippines place the domestic quota of centl;'ifugaJ sugar at 70,000 short tons, which amount was found to be just sufficient for local r equirements. Thi s less than the qUantity of sugar consumed locally for the last few years, and is explained by the fact that since the operation of the J ones-Costigan Act in the Philippines, centrifugal sugar production only has been regulated, the production of low-grade sugars, such as museovado and " panocha" remaining unrestricted. However, even if it is taken for g ranted that sugar consumption in the Philippines may be so stimulated that as much as 145,000 short tons of centrifugal sugar (with the suppression of all lower grades) may be consumed with in the Philippines, there could still be available for export abroad 1,355,000 short tons of sugar, placing Philippine production on the maximu m milling capacity of the existing centrals at 1,500,000 short tons. In the absence of free or prefercntial entry into a market abroad, the Philippines cannot hope to continuc to .·ni sc sugar cane as an industry. It will be imllossib!e for the islands to compete with Cuba in the American market, since, aside f"om a lower cost of production, Cuba cnjoys a very substantial tariff preferential in that market by virtue of its reciprocal trade agreement with the United States and exceptional advantasr e.

PHILIPPINES QUS climatic a nd soil conditions. As before stat!!d, Philippine sugar has a very poor chance of COlRpeting successfully with Javanese, Japanese and Formosa und Chinese sugars, since it is produced by far more expensive labor, which accounts for its relatively high cost. Since Philippine sugar consumption potential. ities arc comparatively nil, unl ess t he Philippines can continue to hold the American market or develop another as profita ble, for which hope there is no justification, sugar production in the Philippines will probably cease as an export industry, and t he present level of consumption, namely, 70,000 short tons would be sufficient merely to operate Philippines centrals at 5 % capacity. OOte/' Ma rkets for Philippine S!lgaT: The socalled other potential markets for Philippine sugar, namely, Ch ina, J apan, British India, and England, cnnnot, fOI' the present, be considered prospective markets. Statistics for p~viou s years t hat J ava dominates the sugar markei in the Far East. It was only recently that, due to expanding sugar production in British India, Japan and China a s a result of their incI'easing nationalism and desire for self-sufficiency, Java's hold on these markets declined. It must also be statctJ. t hat Java encounters intermittently severe competition from Cuba in the Fal" East. Data al1e not a vailable showing t he sources of sugar importations in Japan and China du ri n g recent years, but as these markets have previously been dominated by J ava, whatever importations t hese countries may eventuall y require fl'om abroad can readily be suppl ied by Java and Cuba, at (excluding tariffs) prices considerably lower than the Philippine cost of production. Tn this connection, mention should pe made of the tariff duties imposed on foreign sugar in countries considered as potential markets for Philippine sugar . These duties are as follows: """,.. Iâ&#x20AC;˘.

c.",,)

â&#x20AC;˘â&#x20AC;˘ "

Chi .... .

j.""n 8","11

,",(61{6)

1 . 1S-I.CO ln~...

u";,,J K'.'do.....

O_~l."'"

1 .'5 1.765

It may be stated that at this writing the Philippine equivalent (exclusive of all charges) of the sales prices in China and the United Kingdom are 0.986 and 0.52 cents per lb., ex-warehouse, respectively.

24]

Limitation Itllder the Jones-Co stigan Act: The sugar outpu t of the Philippines during the 1933-34 season amounted to 1,578,000 short tons. As the quota allotted to the Philippines under the Jones_ Costigan Act dUring 1934 was only 1,015,1 85 short tons, after deducting a nominal amount for domestic consumption , there still remained a large surplus for disposal during the yE'.ar 1935. It was estimated that the cane planted for milling during the 1934-35 crop would have produced 1,500,000 tons of sugar if the restl"ictions under limitation had not forced the destruction of a large part of the ca ne. Due to the r etr oactive features of the Jones-Costigan Act, the 1034-35 crop wns reduced by t he quantity produced in 1934 in excess of the quota, resultill~ in the r eduction of the 1934-15 crop by approximately two-th irds. While the cane producers were compensated for cr op reduction, the centrals r eceived no such recoupment of enforced losses. Since the unit costs due to the dr astic curtailment of the 1934-35 crop w(!re naturally higher than the unit costs during a normal milling scason, it is estimated that the loss of r evenues on the basis of the average participation of the crop between the Central and planters approximates an amount equal to the benefit payments to planters for destruction of their cane at the rate of 0.86 cents per lb. of crop reduction. Since benefit payments available to planters are estimated about $14,OOO,OUO.OO, the non-participation of the cen trals in these benefit payments represent to them also a loss of about $14,000,000.00. It has been previously pointed out that the Philippine centrals are co-producers of sugar cane w,ith the pla nters, and that this relationshi p arises O\lt of a contract between the centrals and planters, by which t he mutual ity of operations is so strong that t he operation of the one is regulated and dependent upon the operation of the other. When one fully appreciates the nature of this relationship between the Central and the P lanters, the injustice of allowing benefit payments to planters a lone is very evident. Just as a central will pl'ofit by an increase in production owing to favorable weather conditions, hi gher-yielding cane varieties, etc., so does it suffer for cane losses sustained due to typhoons, pests, diseases and othor cal amities. Although there was a forced destruction of cane with cOI'I'osponding benefit payments to planter s, the central s, who are direct co-producers of cane. were not granted similar compensation.

242

THE COMMERCIAL & INDUSTRIAL MANUAL

It should be home in mind that in other sugar producing countries there is no similar relationship between the grower and the mide!" of the cane; either the calle belongs to the mill companies or the mill cOnlp:mies buy the cane from the producers. In the first case, the mill companies share directly in the benefit payments, and in the second case the mill companies may be compensated for the reduced volume of their production through the adjustment ":If prices of cane to a degree that will be mutually pl'ofitable for the mills and planters. In the Phil· ippines, neither of these methods is open to the cen· tral, which is obligated to receive the quantity of cane a plantel' is allowed to deliver and to mill it without any change in the pal'ticipation of sugar produced, Under this plan, the central is to I'eceive, notwithstanding the increased cost of milling due to l'ctl'oactiv legislation, a reduced quantity of sugar. C~CLUSION

After carefully co sidering the economic provision!', set out in Section 6 of the Tydings.iV[cDuffie Act, the Philippine Sugar Association recommended to the U. S. Congressional 1.1ission, which visited the Philippines in December, 1934, headed by Senator Millard E. Tydings that the following changes should be made therein: 1. Increase the quantity of sugar which under Sec. 6 (a) may be imported into the United States free of duty, during the transition period, from 800,000 long tons of unrefined, and 50,000 long tons of refined sugars to 1,,200,000 short tons of 960 sugar, of which 80,000 tons raw value may be refined. (It is recognized that this increase does not affect limitation under the Jones-Costigan Act while AAA is in force.) • 2. Abolish the export taxes provided for in Sec. 6 (e), and we further wish to recommend tbat the conference, provided for ill Section 13, for the purpose of promulgating recommendations as to future trade relations between the United States and the Philippines be held at the ear· liest possible date. As the Philippine Sugar Association represents tlbout 95 % of the SU1131' milling and refining industry in the Philippines, we believe that its stand on this question should receive the utmost con· siderations. MODIFICATIONS OF

OUR

OBJECTIVES

It should be appreciated that this report and

the recommendations contained therein were pn,. pared in December, 1934, and presented to the Con· gressional mission headed by Senatol' Millard E. Tydings. As this report fully covered all pertinent in· formation regarding the Philippine Sugar Industry it has been brought up to date as to the facts and statistics. Howevel', the recommendations made on page 26 have since been modified and the Philippine Sugar Association new pl'esents a s the principal objectives for the consideration of the Trade Conference, the following.-1. The elimination of the export tax provisions in the Tydings.McDuffie Act as stipulated ill ~ection 6 (e). 2. The working out of a mutually acceptable plan for the indefinite and preferahly pel manent continuance of the present trade }'elation3 be· tween the two countries. "In connection with the second objective and simil ar agreements by the other industries directly affected by the quantitative limitations of the T.ydings-McDuffie Act, the Association has given publicity to the intention of the Philippine sugal' industry not to ask for an additional pound 01 sugar fOl" importation into the UI1ited States. Similarly during the quota years 1936 and 1937 when the. Philippine-United States quota under the Jones-Costigan Act was substantially in excess of the Tydings·l\"lc Duffie Act quota, the Philippin'e Sugar industry elected not to claim the I:!xcess quota for importation into the United States duty.free nor to ship it as dutiable sugar. satisfying itself with the duty-fre2 quota sti l)u· lated in the Tydings·.McDuffie Act, namely 8(10.000 long tons of unrefined and 50.000 long ton;; of refined sugar, commercial weight, equivalen~ to approximately 973,000 short tons, net weigh~ . raw value. This particula" commitment has been made public on behalf of the Philippine sugal' industrr before the sugal' hearings in Washington in con· nection with the proposed sugar legislation a!' well as in the agl'~ement sigr.'ed on May 6, 193'1, by thE' I nternational SIJpar Conference held in London." The I nternational Sugar Agreement if finally ratified and put into effect does not in any manner modify the present position of the Philippine su. gar industry assuming that the existing t r ade relation!' with the United States are maintained for not les:;

PH ILIPPINES than ten years after the inaugumtion of t he Ph iiippine Commonwea lth. The International Sugar Agreement comes into force on September 1st, 1937 and remai ns effective for f ive years from tha t date unless the contracting governments agree that it ;;ball be conti nued for a fur ther period and on what term!'. Under the conditions of t he Tydings-Me

243

Duffie Act there would be no Ph il ippine s ugar admissible for a quota in the free market until 1946 or four years after the exp iration of the Intcl'na tiona I Agreement.

PHILIPPI NE SUGAR ASSOCIATIO N By (Sgd.) RAFAEL R. ALUN AN, Pro.~i<lent.

PHILIPPINE COCONUT INDUSTRY ' I s Vital to th e Countty and to the Filipino P eopl e S A COSMOPOLITAN TROPI CAL PLANT, the coconut is obviously ind igenous in the Philippincs. 1t. is also obvious that the original utiliza tiGll of the coconut was fOI' food and subseqtle!lay, a s nn illuminant and in soa p n1a nufact"'l'e, T h{' coconut, howeve r , only as::un1cd impoJlt.anee: in the world's commerce and trade ahout 50 years ago, when It was discovel'ed th t it ca n also be utilized in the manufacture of many edible products, notably th路 mal'garine-as well as many toilet articles. The coconut indush'y is indeed a viUlI indu stry to the countr. ancl to the Filipino people. The Philippine government derives over 1'7,000,000 in revenues in the form of cedula, wharfage dues, sales, land , income and other taxes from the coconut imlu~try,

THERE ARE ABOUT 4,000,000 people depende nt upon the coco nu t industry a nd more than 1"300,000,000 are invested in it (based on the assessed value of plantations alone). Be!';ides the fact that 28 % of the cultivated tll'ell of the coulll路ty is devoted to coconut, coconut products collectively runl, second in ou r export, Since the coconut acrellge is less than those of rice and corn, it follows that of the country's e,;port crops, the coconut leads in ac reage. Coconut products are now exported to 24 coun路 trie::, so that in numbe r of foreign customers they l'll nk thi rd, beinJ1: only outran ked by tobacco and ahaca products , To t.he coconut indus tl'y, the Philippines owes its fame as the world's greatest expol路tel' of coconut product.'> followed by the Dutch Indies, Ceylon, South Sea Islands and British l'Ilalnya in the order of tlu:ir i111portance, To the P hil ippines is actuall~' credit.ed 33 pel' cent of the world's export. l '" Eddtd bU Dmn~an II. 1'""ulllI(;,>.1< of Ih ~ 8"'0"" of PI"", {"'/"'I'II and "'"I;Q""I n"~nr~h Ca .. nril of Ih. Philippin . { da"df,

I.- C ULTURE

Philippille COC01tut P )'od,tCtioll,-The Philippines is the second biggest pr oducer of coconut!" in the world, being outranked only by the Dutch Indies, British India, Ceylon and i\'1alaya follow in the order of their impOl'ta nce, In 1936, the country had a coconut acreage of over GOO,OOO hectures with over 115,000,000 trees of which 75,500,000 wcre beal1ing. Tn uCl'cngc, the Philippines represents neal'iy 20 pel' centu m of t he world's totnl of over 3,000,000 hectares. The l'anking provin<'es in the order of their acreage during the sume yen!' arc: Tayabas, Laguna, Cebu. Orie)','tal and Occident.'ll l'.Iisamis, Albay, Samal', Leyte, Negros Island, Bohol. Call1arines SU I', Romblon and PangasinRn, The total !'Icreagc of the two adjacent provinces of Laguna and Tayabas alone is about 210,000 hectares which is almost 35 pel' centum of the country's total. TY11"S am! l'nl'ieficil Rai~"d,-Thcre are almost 100 variety mllnes listc!1 for Philippine cO>.!onuts which at'e no doubt mostly synony mollS, Althongh there has not heen madc a thorough study of coconut varieties, it is sa fe! to state that. thel'e C:ln not

THE COMMERCIAL

244

be more than 30 distinct varieties of which the most important for copra are the Romano and the Lagtma. Other varieties with special peculiarities are the following:

M."'••'

prod", .. null \Ohh m... 61linl ..ote Or 1<.. ,h •• bdl ~... i'r. (2) Ni •• i, ' ..... (}) T•• ;,•• prodUct•• ""Oct ... d cd,bl. h"'k, (4) a..1.1o. Iu. nUll "', • "«r 'hick h".~ (~) ,\1''''1.1" prolilic but ,I> OU" If. 'm,11.

(I)

fi'.

Cost of P1·oduction.-It is obvious that the cost of production of copra varies in different provinces, For PUI'poses of illustration, however, the data prevailing in Tayal,.as, the leading producing province, are here given as follows: To .. 1 (0" p<' bc<" .. " T" .. p<' bc<,..., , CoP" produ«d p<' H., .. Cop<' prodl>C.d 1''' ~cc" lu.."",., pc. H.,. I ........., pc' ... , . .. \ Toul CO" of pr04\ICini 100. k,lo<

The involves analysis, copra in

.. I' 83.72

INDUSTRlAL MANUAL Since the I.:verage price of copra during the last 10-yea r period, 1927-1936 is P10 per 100 kilos, we obtain the following summary of the economies of production per hectare: Inro ... fron' I .SS} kilo. of <opu @ 1'10

ea., 0/ p<odc""".,.,"

k,lo,.

Nc< inco",...

,. 1'\$8.:10 88.71

I' 69.:wI

It is obvious that the price of copra per 100 kilos must at least be P5,60 in roder t hat the coconut producel's may not lose. The fact is that besides low prices as in 1933 a nd 1934 when they were N,4 B and P3.93, diseases, insect pests and t.yphoons cnuse regularly considerable losses on the coconut planters .

2U,OO

l.SS} HI •• 7.().I k,lo. N64,OO

,.,

cop<'

cost of produ'ction in large plantations certain different factors but in the final the tota:l cost of producing 100 kilos of either case amounts to about the same.

H .-MANUFACTURE

The Philippines manufnctures fou r important product s: (1) Coconut oil, (2) des iccated or shredded coconut, (3) Soaps and (4) vegetable lard. Copra cake and meal although a by-product of oil manufacture is a very important coconut product. In fact in the Philippine export list of coconut pI'Od\lctS, it ranks third. Other coconut manu-

PH LLiPPINES factures are margarine, fatty acids, glycerine. charcoal and eoir. These Philippine minor coconut manufactures, having fluctuating demands for, as aggravated further by agitations against coconut products in the United States, have lest altogether any importance at present except a s local needs for them might arise. Oil m<1111t!fl cfltre.-Although there are ]8 registered oil fnf'lOries, they arc equivalent actually to 9 large factories, 2 of which are Americanowned. The rc)tistered total ca pital of the 8 really large factories is about 1)10,000,000 which is not reliable, considering the fact that one pbnt alone was originally capitaJi?cd at PIO,OOQ,OOO. Because the machineries used in oil manufacture weI'C imported and the installation of the factories patterned after the m('st modem ones abroad, Philippine oil factor ies mar be compared favorably with the best in America and Euro~e. Reliable information point to the fact that in the manufacture of oil PIO.OO is allowed for fhe crushing of every ton of copra.

245

On the basi s or the HI36 coconut oil prodUCtion, over 333,000 metric tons of copra were used in manufacture. De8iccated or Skredde(l Coconut.-There are 9 desiccated coconut factories in the Philippines but owned by 8 companies only, four of them being American-owned. Being r ecently built, they are indeed the last word in construction and organization. Data on the cost of manufacturing desiccated coconut are unobtainable but because the American market is a virtual monopoly there is not the least doubt as to the profitableness of the enterprise. Over 4:l,OOO metric tons of copra were utilized in 1936 in the manufncture of desiccated coconut in the Phi lippir.es . Cf!7Jrtt Cak'路 and M eal.-As n by-product of coconut oil manufacture, the manufacture of copra cake and meal is incidental and therefore the only expense incurred is handling. Sonp8.-There are only 3 large ones among the 137 registered soap factories in the Philippines.

CocONUT PU!<TIITION

246

THE COMMERCIAL

Althoug h high grade products are manufactured by the large fa ctories, on the whole Philippine soaps are of the quality suitable only fOI' domestic uses. They compose approximtltely 60 per centum coconut oi l of which, it is estimated that from 12,000 to 15,000 tOilS are used yenl'ly in the Philippines fo r the purpose. CuU!? tic soda, the other chief ing redi ent 11sed in soap mamlfadul'e, comes mo~tl y from thE' United State:;. Vegetftb/e Lel1'cl (I1/CI Edible O il-A lthou$!:h the Philippines C01'sunl(~S limited quantities of these co('onut products, their manufacture is m ~eting encouragcment by increasing eXflOl'ts to neighboring Mohammedan countries, notably British Malaya and the Dutch Indies. O/h e)' (Jllis('cilu7Icol{s) COc(llwt P)·odllcts.-Local mUl'gn rine, owin g probably to some infel'iority in its quality, is not gaining- any head wa\-. As already stated, fatty acids have been discouraged by taxation a gitation in the United States and glycerine a nd charcoal 'are in demand only in war time. The coil' ind ustry wi!! succeed only should the Philippines manage to bring down costs of manufacture to the levels prevailing in British ]ndia.

INDUSTRIAL MANUAL I II .-CONSU;'IPTION T he following table gives the consumption of coconub product:! in the Philippines 1935 (1936 data arc not as dUl'i!lj.'" the years, 193·1 and yet available). C01l1l1WljJtit>1I

of Coconut Prodllcts 19}5

Coconut ru, fOC>il • M~o~f><tur.J oil Hom.·",.d< ",I ',

Tub": ... _

V'f:;,ubk 1",1 . M>rf:;."n. ,

So.P' ."

194.170.000 Kh .

,7,600 M.T. 2.)11.810 Xh. 124.451.)00 Ii,.,..

u.ooo "'a' 1.000 CUtS

lS.ooo ron,

19}4

1)1.(' 74 .000 K I1

14.U4 M.T 1.l!lO,nO KI. 1l0.1U .ooo 1"=,, n.ooo .1>0. 1.500 cue 25.000 toO.

F'ol' consumption of identical products brought in f r om other countries, the reader is r cferred to t he discussion of Philippine imports of oils and theil' del'ivativp.s and related products . The loca l consumption of coconut products is so tremendOllS that evidently, it has virtually. reached saturu t ion point. Con sequently, for the coconut industry to survive it must at lcast maintain its export tnHle. IV.-TRADE E X1)0 )·t of Coconu t PJ'odllcls.-The average values of yearly exportation of Philippine P hilippi11tl

PHlLlPPlNES COCOllut pr oducts du ring the last 10~ycal' period, 1927-1936, with the values and percentages correspondi ng to the United States, arc shown in the

following table: Philillpim: 8:"1)0,.1$ o{ Principal Coconut PI'odw;ts 1'"".

1'<>0,

Tou l V. III(

------ Tou!.

s~,,<

of u.s

- -- --

!'SM02,U)

Export COCOIHlt products constitute nearly onofourth of the value of the total PhiliPI)i nc C~POl't.~ It is obvious that with t he exception of copra cake and meal and to a slight extent, COI)l'a, Philippine coconut products are a lm os~ dependent upon the American mar ket. Beside the Un ited States, important foreign consumNS of Phiiipri1W! coeqput products arc; (1) for copra-Holland, Denmark> und France; (2) for coconut oil-Canada, H olland and Ger many; (3) fO! copra cake and meal-Den'\l!\J'k, Germany and Holland lwd (4) for desiccated coconut-Canada.

247

Because the exports of lard nnd buttcr s ubstitutes and \'egetablc-butter arc not a s ~'et important in the AmeriC!'. n trade they have been delibel"ateiy omitted in the list of e:-:porte<l coconut products. c..;UstOIllS figures, however, <lm'in."" the last two years, 1935, and H)36, show that th" '/alue of C): I)Ort of these products, averaged about " 1,000,000 yearly. Philill1Jille E :!;J)o l"t.~ of P rincipul Oils a11d theil' Duivaliv ,.s a11cl Rela /ed P l"o clucts.- Th e followin g shows the averag e values of yeal'l y importa t ion of oil s and their derivatives and related product s during the 10.yea1· period, 1927-1936:

PhililJ}J ille hnpoJ"fs of P"'"ciwd Oi/l; tlll d Th eilDerh'ali1les and Related P rod ucts P,oJ"" ... Oil •..

P" .", ctc.

F,"ih,<n

""~

C h<m; ~. I. ·

G,.... G ri nd <oul

To .. ! V. lo< POlO'

PI6.;}).'·a 1.))8.0i9 3.91),)97 l .ll7.1·1

Sh.", of U. S. p«o.

l'IM12.OU 1.1)1.66S 2,1; 1.990

.,," ro ..

>on

1.18).6)1

,.~

~ .~,7U

}.U9,9l}

1_9.11_

70 'lS7}

l· l ~. _9'J.lll

1'11 .171.' ;)

784(1

2)).'"

It iSjevidcnt that with the exception of fertilizers, th Unit<>d States virtually has a monopoJ~-

P I NRAPptB$ AND CocONUT GROVE IN CoM&INIi D CUI.TIVATI D N

248

THE COMMERCIAL

of products id ~p.tica l to coconut products and their actual and possible derivatives. The other countries supply ing the Philippines: are (1) for oils and gl'casC!---Dutch Indies; (2) for fertilizersGermany and Can ada; (3) paints-Great Britain and German): ; (4) soaps-Japan and (5) chemicals -Germany nnd France.

E ccausc of their minor importance, imports of lard and butter su bstitutes, butter and cheese were deliberately omitted. During the las t two years, 1935 and 19::16, values of importations of these products amounted to about P300,OOO yearly. COPI'lL Equivalent of Coconut Pl'oduct E xported to the U1/iled Sfft/c8.-Since copm meal and cake is a by-product of coconut oil manufacture, only t he coconut oil :m d tl!;icc!lted cocon!Jt need be con~ verted into copra as fellClws: Co"u propct· CocOll.' oil. . D«icc;.,ed (0(0<1", •••

Tot.1. .

17S,886 M,"ic

,0<1$

166.)00 M."i, 'OIU ~J ,)l8 M.uic ."".

dS.:i04 Metri ••"".

INDUSTRIAL MANUAL V.-REAL U.

trees. FUI·thermol"e there are the .yea rly regular destructions by discascs, pests and typhoons. After deducting the 1,000,000 old trees tapped for "tuba" , ther e are left 74,0 00,000 odd trces utiliz. cd for copra on a total acreage of 508,000 hectares. According to the latest sta tistics (1936) 622,000 metric tOllS were produced hom this acreage. It is evident that the; cop ra exported to the United States yearly is equivt.lent to t.he crop of 78 pel' centum of Philippine coconut acr eage. According to the t!. S. Bureau of Census, the total American factory consumption of animal and vegetable fats I'nd oils for compou nds and shortenings, oleoma\'gari ne, food , soap, paint and var~ nishes, linoleoums and oil cloth, inks, etc., was over 4,000,000,000 pounds in 1934 and the Philippines contl'ibuting 500,000,000 pounds of these, supplies, only 12 r/ r therefore of Amel'icn's need.

BALANCE

There nrc, however. many factors, beside!; pllre~ ly exchange of products which influence the trade between the United States and the Philippines, chief among which arc the following: 1) Th. on, ... , .. . nd r,ofi. "" (<>coo., iD"e" ..,.' OWII<d by .... ""',ieo... in ,h. l'hilipPln... Philippi ... d.,ic .... d <<>COnU' f,.,."", .1000, ~ / 9 ......... ic. n,',,"n,d.

.1<

( l) valu', f«i,h' and i",u,,,~ of machioe,i..- imponed ('OlD ,b. Unit«! S,..rt (0< . .d.,i ... " .. in CO_", pl.n .. "o", .Dd (o«o<i...

n. (ui,h, chor,.. 0<1 DO. oDI, PloiliW"" to<O<>u' F'ooi.",. 'hlppo:d .0

(J)

bu. OQ on.lo,ou. ""001.",, .bipt>c<l (,om th, U~it«! St"" 'o th, Pbilipp"". lb, f" I,h.

<'1~i •• lcn.

of .hipm.nu 01 coconu t p<t>d ..... '0 .h. Uoi"d S..... in 19lo1i

.10<>1 w .. Oyer P 1'7.000.000.

(~) Th. ""emium p.id 0<1 .bipm.n" '0 .1., Uni"d S..... 0<> "o..,..d 10

In view o[ t he fact t hat by the time the non~ bearing trees begin to yield, practically the same number of bearing trees will stop bearing, it follows that the capacity of the actual coconut average is equivalent to that of the actual number of bearing

S.·-P . I. TRADE

Ftlrth(!.l· analysis of the tables presented in this report on Philippine exports of coconut products and Philippin!.' imports of analogous products and their derivative'S, during the 10~yeal' period, 19271936, it woule! appeal· that the Philippines enjoys a favorable balance of nCllri y 1'35,000.000 yearly, a~ainst the United Slates.

c,) which;n 19J6 wu «1., .. 1<0' ,0 0... PI-40.ooo.

prod""" "'«1_

~1) Th ..... "".;om aoo<!' .nd 'pc<i.U, , u,o""!bil,, purcbuod h~· propl. J.prnd,n. upon .1.. rocOllu' ioJult,y. (6)

L..

tI,. ,1.< .. I..i" ~"d to ... m..ic.D.... plor.d In ,I., Phili~pinccooonu.

,nd ...".

Considering the bct that all the factors affecting the Philippine coconut trade in the United States, just enumer ated, are all in favor of the United States , it is almost obvious that the trade between the two countries a s for as the Phi:ippine coconut induf:try is concet'ned, is virtually reciprocal and therefore mu t\tally b<'n cficial.

U. S. Dlttie8 on COC01Wt PI·odllcts.-The current world tariff rates (from latest U. S. Tariff Act) on cnconut products tire "the following: Cocoa". oil. CocoaD' "',.... .

(P. ",,'pb) S_ l< lb. I1&- H h lb.

(Sb,edded .cd d"icca"d)

c.,..

J:117-fr«

At present and of course until the sixth year of the Commonwenlth, Philippine coconut products are not affected by the above duties.

PHlLIPPINES Effect of McDltlfie-Tydi1lU8 Taxes 011 Philippim! Coconut P)·odllcts.-The terms of this law call for gl'Rdunroc! export taxes beginning the sixth vear of the Commonwealth with 5 per centum of the American duties then in force, increasing 5 per centum yearly until the tenth year when the tax will then be 25 per centum and thereafter 100 pel' centum.

Based on the tUl'iff rates mentioned in the preceding pUl"Ugl'sph bcginnin'g the sixth year of the Commonwealth, the Philippines shall pay the following on shipments per pound to the United States: 6,b

CtIccD., 0'1. DC'Iicc."cd

<O<OIIU,

,r.

I {IO< 7/11J<

7th

~r.

I / }, 7~ 10<

8tb ". 9.h yr. lO,b rr. Tb<r",J'<t l I te.1.l<" 21 IIJt 14 / 10<

JI lL

7/ k

2 / 1< H / l.<

It is most probable thaI! even on the sixth year of the Commonwealth, exports of coconut oil will cease but this will be replaced by copra because this product is not affected, While therefore actually thc Philippines will not lose in copra trade, its revenues wiu, however, he g reatly depleted, As regards desiccated coconut, people in the industry are convinced that the graduated taxes will permit the indush'y to survive until the tenth year only,

Effect of U. S. Excise Ta xes on PMli1Jpinc CoProductH,- A!'o a res ult of agitation, especiallyon the part of the dai r y interests and coHon growers (because of cotton seed oil), the United States Revenue Act of 1934 provides a ta,x of 6 centavos PCl" rumnd of coconut oil and copr:!.

cOllnf

While it is t rue that this fax reverts to the Philippine government, it is vel'Y unfor tunate that according to the provision!! of said Act, not one l'ent of this revenue is to be spent directly or indirectly fOI' the benefit of the coconut indu!'otry, With the tariff advantnge still enjoyed b~' the Philippines, the imposition of the G-ccmtavo excise tax would not be a burden but unfol'tunately thcre are so many fOl'eign oils and oils seeds which arc not affected by said Rev(>.nue Act, On top of this, these materials,

249

like the new babasil nu t, which is much cheaper than copra, undersell coconut products and as a result, American imports of these foreign materials are increasing at the expemw mostly of coconut oil. vr,-CONCLUSIONS

AND RECOMMENDATION

(1) The gradual loss of the American market as the result of t he excise and export taxes, unless favorable amendments are enacted, will surely be disastrous to the Philippine COCOllut industry as follows: (.) Th. wi,hd .. w.1 of ,h".,fo""b. of 'he pre,,", PhBippin. coconu, b«· w,ll .if«, .d ..... I' l,OOO,ooo Filipino. J'F<nd,", upo<>

t"'g, f,om ."loi •• ,,011 tb. '0::0""' ind",ar,

(h) Tbe P'''''''' 10","",,0, loc.1 "'en". of l'7,(XIO,OOO will be ,«luted ,0 f'1.7)o,OOO

~nly.

(2) As the hade in Philippine coconut products and American oil s and their del"ivatives and related products as supplemented by othCl' American advantages such as freight, ins urance, ability of Filipino coconut growers to purchase considerable other American goods, interest on American investments in the coconut industry, is obviously mutually beneficial for the Philippines and the United States, the statu,~ q1lo should at least be maintained.

(3) Because of the excise taxes resulting in less imports of PhiliPlline coconut oil, the United States has imported more oils and seeds from other countries, it proves that America must! import these materials anyway from foreign countries, Long association of the two countries coupled with actual mutual trade arlvantage lind the l'esponsibility shared by American capital in the promotion of the Philippine cocomlt indu!itry, should be sufficient motive for America's waving of rlny discrimination against this industry wllich is so vitrll to the country and to the Filipino people. Vl r ,-Ac":O;:OWLEDG~IENT

In the preparation of this report due acknowledgment is hereb~' Illllde of the liberal usc of the reports of the Division of Statistics of the Department of Agl'iculture and Commerce the rnsular Collector of Customs rind of Leo Schnurmacher, Inc of i\1anila,

THE COMMERC IAL & INDUSTRIAL MANUAL

'SO

REVIEW OF COCONUT PRODUCTS FOR 1936* N TAKING stock of the situation in the markets for copr a and cO('onut oil of tl'le world, thE:: most striking featur e is, of course, the extraordinary appreciation in v~lu es that has w.k<;n place, .. Whatever the factors have been which contribu ted to this upswing, t he fact remains that s ince t he lows of the depression, tremendou s advances have been realized, and whiJe it cannot be said as yet that prices have completely recovercd pre-depression levels, there seems to be no doubt but that they are well on t he way.

In the Philippines, the year 1936 has not brought g reat changes in the industry. The area planted, accor di ng to official figures, has hardly increased; commcl'cial and industria l factors huv~ remained more 01" less at the same level. The liqui:iation of one of the important oil mills in Manila has not changed the output ca !)acity of the Philippines, as being worked by other owners. T HE CONSTRUCTI ON of another modern Desiccnted Co('o~t F actory in Tayabas province shows the confidence which local capitalists have in this industry, an~ unless t he competing level of copra prices shou ld make the production of desiccated coconut a n unpro'r:~table proposition, this new factory, when put into operation early in 1937, will no doubt justify t he conr 'dence displayed by the owner s. Of outside developments affecting t he position of coconut oil, the outstanding one is the passage of the Bail ey bill which filled gaps in the E;>;cise Tax system wh ich had proved very detrimental to Philippine Coconut oil in that it had omitted to ta;>; a considerable number of oil s and fats which compete with coconut oil in industrial and edible applications. The political situation in Europe a t tIle beginning of the yeal' and t hroughou t the first si;>; months, with the application of sanctions against Italy and the r esul t ing di sruption of existing t rade relations, proved beneficial to the Philippines in that it brought consider able business in copra to Italy, who found it difficult to supply her needs from accustomed SOUl'ces due to the fact that these sources

.. [~ ep . odu cetl from "ncv i~\V of Coconut Prorluct!) for H13U" compiled by LEO SCU" UR" .. CIt En. I " c. , DnOO:EM, i\.IC"8t:R ;\1 .. "'L.\ S TOCK E:O;:CII""OE. M.UHL.. . W e .eg.M tbe neee.uit), of u! in): o nly s uc h Ulblu contnined in (hi~ nrtic1e ns npply direc t to P. I. NOT" : -'{"nila. Cop.a. pricu in this reviow nre in P MOS ( PI ~s.30) per 100 kilo •. Coconut oil p rie"" ou in U. S. cenl . per lb . c.i .f. Ne ..' Yo rL

were within the group of nations who applied sanctions, whilst the Philippines, under the sover· eignty of t he United States, was not restricted in any way to do business with I taly, where the state of war made increased imports of fats and oils necessnry. The result was that the copra business during the first half of the year was entirely under the influence of European demand which expressed itself in higher retur ns th a n the ones avaibOlc from the United States. With the cessation of £he policy of sanction s, the passage of the Bailey bill, and the application of complementary excise taxes, the pic ture chuJ.1ged and business to Europe ceased com~ pietcl y. The drought in the United States, combined with a general upswing in business and a cOlTesponding increase in consumption occasioned thereby and by the huge amounts of money spent by the U.S. government on relief, on the veteran's bonus, and on soil conservation, pubIlc works and armaments, drove levels of prices of fa ts and oils far above European levels ; and where under ordinary circumstances t his would have led to a greut. influx of fats and oils from Europe and those countries that supply the European markets, into the United States, the completed barrier of the excise ta;>;es prevented such a development and for the Philippines, the result was that United States values became again the barometer of the copra business, with Europe entirely out of line. The month of January opened with strong demand fr om Europe; prices in London rose steadil y

PHILlPPINES Crom £12.15.0 for F.M. and £13.10.0 for ecbu Sundried to £14.10.0 and £15 respectively; echu dealers sold all along the udvance, but business was transacted only in small lots at a time. 1n line with European quotations, local crushers h ad to advance t heir limits but found it difficult to get response from oil consumers. Prices rose f r om P9.25 for Reseeada and PS.35 for Buen Corrientc to PIO.75 ior the former and 1)9.65 for the latter grade. Oil prices followed reluctantly with only sporadic demand from the edible quarter , and while the mal'kp.t had opened weak at 4~~ centavos the third week brought transactions as high as 41,.8 centavos with sellers holding fol' 5 centavos. Local crusher s were hard put to susta in the competition with European consumers, us the lack of response from the United States oil market was aggl'a"uted by a heavy decline in prices for Copra Cake in Europe which carried p l'iccs down from P30.50 to 1'25.00 I.oD. pet· metr ic ton. In view of the ~mp lete lack of interest American consumers were s h~ving fOl" copra mea! , nu bu~in ess was transacted to A'merican destinations. AI"I"ivais: of COIJra in eebu uno:!. in Manila were way

251

above averages, due to large quantities of stol"ed copra which were shipped up from pl"ovincial port:.. as dealers took theil' profits on the rising market. At the very end of January, a decline set in, in Europe, which calTicd copm prices down to 15 / -for both grades; but upon r enewed demand, the market steadied up and prices recovered some of their Ill"evious losses. A fairl)' large amount of business materialized to Europe, where consumers and specula tors seemed to be interested to buy. Local crushers. hampered by the di screpancy between European and Americnn equivalents, gladly backed away from the market whenever London quota t ions seemed to indicate a possible easing-off; but in spite of the fact that most of the time the)' were quoting" lower than European equivalents, they were able to buy quite fair amounts of ready delivery copra, as only the large dealers were able to nandle export orders, while small middlemen who have no storage facilities had to sell to the mills at their prices. Prices dropped f rom PO.50 fOI' Resecada and P8.50 for Bue n COl"l"ieme to 1'8.50 and

7 COCONUT V"RIII"!"'"

252

THE COMMERCIAL & INDUSTRIAL MANUAL

P7.60 respectively, while coconut oil dropped to 4% cents; but while the latter price did not change any more throughout. February, crushers had to advance their quotations on t.he London rise again to )'9.50 and 1'8.50 respectively; when towards tll\: end of the month European prices dcclinea to £13.10.0 for Sundricd and £12 .15.0 for P.M., for a net loss of £1 in both grades, crushers were quick to take their cue from this decline and prices closed @I'S.75 for Resecada and 1'7.85 for Buen Corriente. Pacific Const crushers had had rat her the worse of it during January and February, and their prices yielded consistently less than European offers. Notwithstanding this f a ct, some business was transacted to Pacific Coast destinations at various points during the decli ne, due to the fact t hat EUropean lines were unwilling to go to outports to pick up less than 500 tons at ench ~~t; and those shippers who had onl y smaller quantities for sale, were com~lIed to sell to the Pacific Coast. Copra Cake prices dropped further P2 on selling pressure from the mills who were overstocked, but closed with a steady undertone when excessive supplies had been marketed, and when prices in th United States, which had declined from $18 to $16.25 per short ton d.f., steadied up on increased demand. Copra a r rivals in Manila and Cebu wer e heavy and shipments far in excess of what had been expected, with EUl'ope taking more than haiti of t he total.

Early March brought a fUI·ther decline of price3 in Europe; buyers reduced their ideas to as low as £12-2-6 for Sundried and £11-12-6 for F.M ., but at these prices no business developed. Consumer demand began to develop soon, however, and prices having recovered somewhat, quite fair amounts ot copra were sold at prices fluctuati ng between £12.15.0 and £ 13.5.0 for Sundried and between .£12.5.0 and £12.15.0 for F. M. Italy came into the market toward the end of the month with f .o.b. offers for shipment to Genoa on Italian Charters for April and May, and some business was transacted as the premium avai lable over current prices was sometimes as high as sh 10/-. With supplies becoming scarcer, and demand for shipment to Italy increasing daily, local crushers were reluctantly forced to increase their purchasing limits, and while they had been unwilling buyers at the beginning of January @ P8.50 for Resecada and P7.60 for Buen Corriente, they had to advance their prices gradUally until 119.50 and 8.50 respectively had been reached. The situation was all the more unfavorabl e for them as oil buyer s in the States seemed to be unwilling to increase their prices for coconut oil correspondingly ; the highest price obtainable during March was 4% centavos, but most of the time lower price.:; were quoted . In line with the sluggishness of the oil market, P acific Coast crushers advanced their prices reluctantly from $2.35 to $2.55, but were

EXPORTS OF DESICCATED COCONUT Un".d s,,«.

Shipp''' F.. n~lin B.h, Co. of .he Pb il ippi." . . Red . V. CocO"'" Prod." ... L'd ...•.•.. .

Mnil.

...

z...ba••,.

E~'op<

on.o

M,n '!'

IS.6}S 1.0S8

:~~ipS~~~~~:~.~.".~~ .~:.: ..

}, llS

,.., ""

l l.1H

1.116

). 61 ~

1.l16

" "

M.oil • .. .. .

z.. ..bo.na· D.nD. .

Tour Metric Ton • . .

Uo,t<d Sur" Eu,ope Chi", "'J'Pon 11,1.H

3.614 1,116 }S.914

" "

Toul M<lric Too. 19}5 1936

n,us 3.616 1.16)

~."'"

To •• 1 M, tr'. Too. 19)6 19)5 IS.1s) 7.0S.

16.1)1 6.110

),616

Ui"I 4,756

,'.m .... ,,.. " r.s16 1,16)

RECAPITULATION Pom

o.no

1 . 81 ~

Toul M, ..;, Too.

Cbina &; J.pao Z.mba. ",.

l.6H

~on

C.r.mb. Su,.. E.." •........• . . . ...•. . COOp<""" Cocon~l P,od",u , Lid .. F,,'"h .... PI.n""o. Co .• 10c ..•..•. Sun Rip< Coco<>" r P,od ............... Th. For E. .." . Mo n"f"l""O' Co .• O..do nd E. p' .... ....... Pluhl'P'" ' Cocoo,, ' P,od",,, . . Il lb ,;oo T. n,oco ...

Man ll.

".,." 4,197

~.'"

)6.064

'.m

...'"" "

1 4.7

PHlLIPPh'lES again only able to purchase copra from ports wher<'l shipping facilities to Europe were not avaiJable. The Copra cake market ruled inactive practically throughout the month in Europe, but due to copra supplies becoming scarcer, and the uncertainty horn from the heavy EUropean competition, crushers hesitated to lis ten to offers made from time to time

by European buyers. Prices fluctuated between P24.S0 and J>27, but very little actual business was

transacted.

The meal market on the Pacific (.:oast

improved due to the reluctance of local crushers to offer, and some small parcels wcre sold at prices ranging from $17 to $18 d.f. Pacific Coast ports per short ton. Arrivals of copra both in Manila and Cehu, while still in excess of averages, were considerably below those of February and this was reflected in the volume of shipments which did not attain more than about.. 50 % of those of February. Europe again took over half of the total shipments. The reason for the sluggishness in the oil market was attributed to the increasing importation in the U. S. A. of Brazilian Babassu kernels, which give a substitute for coconut oil of satisfactory quality; the ·fact that under the terms \of the commercial treaty concluded between the United States and

CocONUT

253

Brazil, neither these kernels nOI· the oil expressed therefrom could be ta:'lled, and reports about tremendous numbers of Babassu palms existing in the primeval forests of the Amazon Valley, evidently influenced buyers to take a waiting attitude. The scale proved to be rather exaggcrated, a s the extraction of the kernels from their extremely hard shells increases costs of production considerably, as do the primitive methods of harvesting and transportation to shipping points; besides, the bulk of the kernels consumed by the soap industry in Brazil, and the exportable surplus is not of a size to make considerable inroads into our coconut oil market likely. April brought a sharp decline in all markets. Under selli ng pressure from the Philippines, European quotations dropped £2 for Cebu Sundried and £1. 17.6 for F. 1\1., but American equivalents showed much less resistance and declined much faster; coconut oil declined to 3* cents in less than two weeks, and local crushers backed away from the market as fast as they could, and as a result the movement carried prices down to 1)7.00 for Resecada and P6.30 for Buen Corriente, a drop of about 24 0/. below opening quotations. Due to the Cact that Pa·

V ARIBTY

~S4

THE COMMERCIAL & INDUSTRlAL MANUA L

cific Canst crusher.'; also reduced their limits rapid~ ly f rom $2.55 to $2.25, exportcl'S continued selli l'!p, to Europe where, for shipment to Genoa, premiums were gencrally available, and a fail' amount of business was t r ansacted, also to i'llarseille and North Atlantic destinations. Copra Cake, however, recovcred about lO o/c and closed firm at P28.30 f.o.b. p :lr metric ton, as the demann coul d not be f ill ed due to insufficient oil sales by crushers. Arrivals of co· pra in Manila were heavy and shipments increaser. correspondingly, with Europe taking about 540/0 of the total. The shal'p drop during April could not remain long without a reaction, and after the fi r st ten clays of March had passed l'ather quietly, t he market became active again and London prices began to improve, rising from £11.15.0 for Cebu Sundried to £12.10.0 at about the middle of the month; in view of low arrivals, ane resulting buying competition, local crushers advan'eed thei r prices from P7.00 for Hesecada to P8.00 and 4'om P6.30 {or Buen Corriente to 1)7.20, in spitc of the it'lct that the U.S. oil market wns listless and dro pped ?L,nother Ij.jc. to 3~~c., I'ecov ering however during the second half of May to 3 7 i c. and closing at 3:l..~c. Pacific Coast crushers,

after having drop ped t hei r ideas to a nomi na l figure of $2.1 0 began to show some i n te r~st after the mid· die of the month and prices rose to $2035 with $2..10 available for prompt shipment. Both Copra Cak(: in "Europe and Copra Meal on the Pacific Coast rOSll st ead ily due to lack of supplies, and wh ile li~t1p business was done, buyers increased thei r offers fOl· cake to 1)31 Lo.b. per metric ton, and to $20 per .';hol"t ton c.i.f. P acific Coast for meal. Ar rivals or Copra were lower t han in April, but still above lwerages, and shipments were heavy with "Europe again close t o the 50 0/0 mark. Continued European demand thl'oughout the month of June was the main reason for a t ight ~i tuation which developed due t o the purchasing activities of speculators in t he provinces, where pr i c~s kept above Manila parities to the detriment of the local cr ushers, who were unable to purchase enough copra to cover their requir ements and had to dloaw on their stocks which, in spite of heavy arrivals. show~d a decI·ease on balance. 1n vicw of the aloofness of American oil consumers, IJriees did not imJl)·ove much and never during the month rose be o yom! P8.50 for Resecada and P7.60 fOI' Buen Carden'! and when the Bailey amelldm~nt to the Rc\O_

COCONUTS B~ING SIllPP~D TO CONC~NTR"'TJON CI1NTIIR

255

PHIUPPINES cnue Act wus passed by Congl'ess with the proviso that. the newly established Excise Taxes would not go into effect until after 60 days from the date the act was si gned, dealers, feuring large imports of UI:<-fn.'C oils and fats during those 60 days by speculato rs, which might press on the United States market, so!d between 2,000 and 3,000 to ns at slig ht. Iy weakening prices from P8.50 for Resccada (;'7.60 for Buen COl'ricnte) to " S.30 and " 7.45 respectively. London prices improved to £1 3 for Sundried, and premiums over this price were obtainable for F.l\L (:opru fo r shipment to Italy. The Oil market improved graduall y to 41,ic. but nob much trading was reported due to the tight copra situation which did not enabla Ol'us hers to operate freely , Pacific Coast cru!lhers kep t below European equivalents with their bids, and consequently were unable to buy much copra. The firmness in the market was not to a small extent due to repo{ ts of a drought of serious nAh:re developing in the Middle-West.-Copl·a Cake and Meal markets were finn with an upward tendency, and considerable gains w~·e l·egistered as European prices improved to P39.50 and P acific Coast quotations to $23. Arrivals 0'1: copra were phmtifu l during June, and exports he~vy' , with the European share under 46 ?'o of the total. The little selling fluny at the end of June had lost its impetus afte r the fir st few days of July, and while quite some contracts had been made by dealers to cover their July arrivals, at prices rang-

ing from I'S.50 for Resecada and 1'7.65 for Buen Corriente to P9.00 and PS.IO res pectively, Pl O f or Reseea da und JI 9 fo r Buen COl"l"iente was rapidly available by the middle of the month and throughout the third week; selling interest brought out fairly large supplies at this figure and enabled crushers to operate more freely on the oil market, which in tUl'n induced oil buyel·s to r educe their limits which had risen to 4%c. by the middle of t!1.e month , to 4%c. Local crushers tried to keep with in oil equivalent;; by reducing their limits to P9.25 for Resecada and PS.35 for Buen Corriente; on the drop, a large amount of nearb y and futUr e delivery cop ra was traded, but at the close dealers had w ithdra w n from the mal"il:et having soid ali their available s upplies. EUropean demand, fOI· the first time since the beg inning of the year, wa!!! no t very strong , and P a cific Coast crushers had an increasing sh are in t he business at prices ranging from $2.40 to $2.65, whieh afforded at times better returns than European prices which rose steadily during the month f rom £12.5.0 for FM and £12.12.6 for Sundried to £13 and £13.5.0 respectively. The feature of thc cafc and meal situation was very heavy demand fo r prompt and forward positions from Pacific Coast buyers who anticipated the effects of the drought. Prices rose to $2S per short ton c.i.f. and left European equivalents @ N1 f.o,b. fal · behind. Manila uni\'als of copra were on the average whil(> Cebu a rri\'als exceeded the average considerably. Sh ipments were heavy while below t hose of June,

EXPORTS OF COCONU T OIL Sb;~p,:r,

P. ci6c Co. " Ccbu

~j,nil.

Philippine R.linins Co., ,.c .. •. . .....• Sp<.«~ K~I~" &; (Pbil.), In•. . J.oCu, P,,~ ... " .... ........ PhillPl'in• "'.nu(. ... ,j.~ Co: .. l .... lnJu",i.1 C. ,po.. ,;." .. Mod,i,.1 II< Co.... . . •. . ..••. Cu""o, V,J.l1I: Co .• loe: · Lu Do &; l u Ym Co:' . C.umbo 'e'·.

So.,

S.,,, ." ...

~~l~=fli=5~.<:::_ . Son 1'.1>10 1«

II:

9,370

Mil

2.ll6

Gulf Po". M'nih C.b"

Eu,or'

10.171

M)9 ls,olS

,.".

I .S71

17.073

19 , 1~4

,,"" l.ns

7,719 S.76S ),~8

I,UO

,.=

M,",h

~,no

AIi ' "'ic Co .., M.nil.

1,~ 156

'.OM

Chin.&;].p'" O,h"Counlr iu To" IMcnie Ton, 19)5 ,,11.,1. Co bu ~1I . il. C,b" 1936

1l.1M

1,769

~.619

11.9<19

71,nS

4~ , li 9

)9.077

11.81 5

10.Hl 7.Sn

8.SO) U}S 6.1 1 ~

1,1, S

IL~87

I .U S 10,860

LUiS

Oil F.«o, y..

To!>1 Mctr;' Ton,"

7~ .S H

'" 1'10 "

lU)S

7.974

l.9I1S

" "

,,' "•

ISS.SOI

16).8H

RECAPITULATION Po,,"

M.n,I.· . C.bo· . TDul M«rI.Ton .

P,,,6.co ...

AII •• licCo . ..

Gulf Pom

Eu,opc

l!.216

Sa,619

)408)S

) ,99S

8.769

3\,9-19

7.97<1

1l,OSS

9O.S71

"....

) ,99S

O,b<t

Chin'l\:J.p.n

Co •• ,,; ..

'""

T. "I Me" " To •• 19)6

11 0.096

19)5 11l.916

' 3,106

'1 .893

I SUDl

16l.SH

256

THE COMMERCIAL

INDUSTRIAL MANUAL

and the European share of shipments doel'cased to 42- % O/C>. With arrivals somewhat below expectations, and the coming into effect of the new excise tuxes, most dealers decided to bull the m81'ket dUring August and started hoarding; the result was that local crushers, unable to purchase suffici ent copra at reasonable prices, had to withdraw from the oil market, and buyers in the U. S. had to bid prices up due to continuous demand from the edible quarter. Oil prices rose from 4*c. to 5%c. done at the end of August. In sympathy with this rise, local crushers advanced their limits from P9.25 Resecada and I'S.30 Buen Corriente to Pl1.75 (in some cases P12) Resecada and 1)10.55 Buen Corriente. Pacific Coast prices rose from $2.55 to $3.00 and a fail' amount of business passed, due to the fact that European consume,rs were unwilling to follow the rise of Philippine CQpra, being able to covel' their requirements by drawing on other sources where supplies had become ~eason ally more plentiful. Prices improved from £13.2.6 to £IS.15.0 for FM and from .£1 3~7-6 to £14 for Sundried, but these prices did not afford equivalents as good as Pacific Coast quotations. Copra meal prices improved to new

highs during the month and reached $31 at the end of August, whiCh prevented business to Europe where pl'ices moved between the nominal values of P41 and tt43. Copra arrivals during August were below expectations in Manila, but slightly above averages in eebu. Copra shipments were heavy, but the proportion of European shipments fell off to 261h % of the total. Strong consumptive demand for oil dul'ing September drove prices up twice in succession; Prices in New York rose from 51,.8c. to 5%c. and in harmony with this rise, crushers were ublc to advance their limits from PI2.25' for Resecada (PH for Buen COITiente) to P14.00 and P12.60 respectively. At this level, dealers started to unload, and prices sagged to P13 and PH.70 respectively. Oil prices declined to 5lhc. but on renewed buying interest from consumers, and with copra sellers withdrawn, prices staged a comeback and in Manila up to P14.50 and PIS respectively was paid. Again selling pressure developed and the market closed at PIS.50 for Resecada and P12.1S for Buen Corriente. Pacific Coast crushers were in the market throughout the month, at rising prices. and after a slight set-back closed firm at $3.45. Copra meal prices declined in an erratic market from ~S2

TIIB RSSULTSOP IMPROVBD MRTIIOOS Of CULTl\'ATIOl'l

PH ILIPPINES to $29 per short ton c.iL Pacific Coast, with European v~llucs pllr:!ly nomin'al between !'42 and P39 per metric ton Lo.b. Arrival s both in Manila and ecbu were above averages, and shipments slightly below expectations Europe took 25% of the total. Three-fourths of the month of October were marked by considerable excitement in the local market, which rose to PIS.50 for Resecada and PJ 3.90 for Buell Corrientc; apparently a considerable shortage of coconut oil for s pot del ivcry had developed in the United States. and large premiums were obtainable for prompt goods. While the highest price reported for future s was 6 !hc., immediate delivery wag reported rlone as hi gh a s 7l.~c. At these high prices, competition from othel' fats and oils, mainly palm kernel oil and tallow, l'esulted in a sudden withdrawal of buyers from th e oil market and the market declined l'apid)y dm路jng the fOlll'th week to 5% c. Copra prices drb.pped in proportion, and reached P13.25 Resecnda and 1'11.90 Buen Corricnte, buyers, with seUers showing little or no interest. Pacific Coast quotations. hnvit\'lJ~ risen to $3.95, dropped back to $3.60 at the end of the month. European prices were entirely out of line throughout October. Copra meal pl'ices dechned as demand pet-

257

cred out, and $27 was the best obtainable indication at the end of the month. Crushers, anxious to sell forward and unable to stir up any interest for forward positions on the Pacific Coast, inquired for bids from Europe and some business resulted for December fOl ward at 1'42.25 I.o.h. per metric tOD. Copra arrivals fell below averages both in Manila and Ccbu, and shipments were extraordinarily low; no exports to Europe were recorded due to the fact that bu siness to Europe had come to a complete standstill after July. The first week in November continued weak, with oil buyers withdrawn; but soon seller's, noticing a rather alarming decrease in arrivals withdt'ew f rom the market, and buyers in the United States, fearing a s hOl'tage of supplies result ing from the ;;hipping strike on the W est Coast, began to bid the market up. The market staged a quick recovery and prices rose to 7c. early shipment to New York; in Manila crushers were forc ed to anticipate the advance due to buying competition and th路; former h igh WRS soon reached and passed. During the fourth week of the month, the top was reached at PtO.50 for Resecada and P14.R5 for Buen Corriente. Dealers decided to sell part of their accumu-

258

THE COMMERCIAL & INDUSTRIAL MANUAL

latcd stocks and 11I'ice:; declined I I bit, but the mar· ket closed at 1'16, to 1116,25 bu~'ers fOI' Resecad~ (P14 .'10 to 1'15,60 for Bucn Corricnte) with sell~r~ nowherc ill evidence. Pacific Coast Prices reached $4,15 and drOP I)ed back to $4,10 at the end of the month, London, which had been !agging behind. sLnged a Sl)ectaculnl' rise from £15 to .£.l9,7,6 for Cebu Sundried in bulk, and although these prices were !Otill considerably below American equivalent!', the !'ise prevented an avalanche of offers of other oils from Europe to the United States in competi. tion with coconut oil, which was bound to come un· less European pl'ices rose suHicicntly. A ITivals of copra both in Manila and Cebu wcre way below expectations, falling sholt of HVCl'ages by a COllsider able margin, Shipments were fail', practically 100 % being fOI' U. S, destinations, December wa,\ by Iar the steadiest month of the year, Prices l'O{Ie in New YOI'k to 8lhc at the end of the month, w)th considerable premiums over and above this price available for prompt delivery, Manila was again ahea of the oil market, and at the end of the year P20,50 for Resecada (PI8.45 for Buen COl'l'iente) was rea ily available with some transactions rCllolted dOlle < t. P21 for Resecada, A

fair amount of trade was done on the rise, but deal. ers kept accumulating, for it had become quite ap_ parent that in the provinces usually supplying the i\fanila market, an acute shortage would develop dul'ing the first five months of 1937, due to the fact that gt'owers, in order to take advantage, as early as possible, of the high prices available, had stripped the trees, harvesting green nuts and con. verting them into low quality copra; this practice inVariably results in injuries to the trees and lowers their bearing capacity, To make matters still worse, a faidy heavy ty phoon swept across South· eastern Luzon on December 2nd and did a lot of damage to coconut gl'oves especially in the provinces of Albay, Sorsogon and Camal'ines, which had jus~ begun to recover from the severe typhoons of 1984, Pacific Coast crushers had a hard time due to the Shipping strike, bcing unable to discharge their co· 1)I'a from the ships in port, and to purchase futu!'es due to the fact that future space was unobtainable, Some space was available fOI' December and Jan· uary, but that was soon filled at pI'ices ranging from $4.30 to $5,25. The London market rose strongl~.. but kept its distance from American equivalents. At the end of December, £22 was reported available

ANOTlleR PHAse IN TUII MANUFACTURe OF HIIMP

PHlLIPPINES for echu Sundried. Copra meal prices were slightly steadier during December, and some business developed, but the market was l'ather inactive duc to the impossibility to take on new commitments on ac-

count of Jack of space. At the end of the year, the world outlook seems distinctly favorable lor prices of fats and oils; in the United States, the fact that after purchasing only slightly less copra and coconut oil in the Phil-

ippines throughout the year than in 1935, consumers there should be so hard pressed fOl' ready deliveries as to be willing to pay substantial premiums over the current price for spot delivery, seems to indicate quite clearly that consumption in the United States has increased beyond all expectations. Ii one takes into consideration that the U. S. Government has been spending liberally huge amounts of money on relief, on reforestation, soil conservation, public works, armaments; tliat {t has paid a cash bonus to all veterans; that dividends declal·ed during Dec. ember by corporations in the. United States amount to approximately $800,000,000; that all industries have seen a revival or trade to Jevels not seen since 1929 it is no surprise to see th'at the consumption of fats anr! oils has risen. In Eu ope, Uie situation

259

is somewhat similar even if it is not so clearly vis· ible; political issues cloud the horizon too much and too often to gather a clear picture of the situation; but there seems to be no doubt that many of the European countries which have been suffering from the depression most, are now back on the road to recovel·y; exchange restrictions are being gradually loosened; collaboration for reciprocal trade agree· ments and the lowering of tariff walls is being seriously considered, in many, if not in all countries; the steadily rising pUrchasing power of the Russian masses and the consequent increase in consumption of her own materials by Ru ssia will tend to decrease the surpluses which she has available f01· export; the prohibition of exports of olive from Spain, said to have been decreed by G<!n. Fmnco withdraws from world markets about 200,000 tons of a very highly prized table oil and is going to be felt sharply in many countries where popular taste prefers this oil for cooking to any other vegetable or animal fat. The whale catch which is now in progress wiII most likely not produce larger res ults than in former years, and the fact that practically the whole 1937 crop of Sumatran and Malayan' Palmoil is :llready sold is indicative of the intent ion on the part of

260

THE COMMERCIAL & INDUSTRIAL MANUAL

European and American Soap manufacturers to assure themselves a steady supply of this staple ingl'edient for soap, at prices which are actually way below the present market vnlues, Last not least, indicntions are that the copra crop in the Philippinef) will be short of normal, at least dul'ing the first six months, and estimates of the probable shortage during th is period l'un between 70 and 90,000 tons; whether this shortage will be made up by a corresponding increasc in the production during the second half of the year is l'ather doubtful. Thus, the situation leaves little doubt that present price levels are not exaggel'aled. and it must be considered that while at the beginning of the depression the drop in agricultural prices reduced the pUl'chasing powers of farmers and produced a shrinkage of sales of industrial products, thus in turn lowering the pUlfhasing power and consumptive capacity of industl'ial labor- -n vicious circle which resulted in dwindling interchanges of commodities and services-now, the increase in values of agri. cultuml products and the rise in the consumptive capacity of the farmers acts in the reversed dil'ection; it incI'eases employment in the industries, and thus provides a stimulus t \ the dC!Jnnnd for agl'icul-

tural products which in turn must rise in price, A lot could be said about the part. invisible stocks play in the interplay of economic factors; it is evident that in u period of dwindling consumer demanc'l and declining valu<:!s r(ltnil stores will be careful buyers and lay in much lower stocks, tending to rather l'un out of an article than have a few units on the shelves which may take a long time to get cleared out; while in a period of expanding trade, increasing power and rising values the tendency is in the opposite direction, There is no doubt but what stores practically all over the world must keep lal'ger stocks of practically all articles they carry in order to keep pace with the inereased consumer demand, and wholesale demand must be stimulated accordingly, Another stimulus to demand is speculation, which always sets in when upward movements become a rule rathel' than an exception; but there is palpable danger that such speculative demand may drive values beyond the proportion which would limit the range of prices growing out of consumptive demand only; and the inherent character of this speCUlative demand bears the seed of the reaction, as )vhen !)\'ices have risen sufficiently, specui:1tors

PH ILlPPINES invariably, take theil' pl'ofits and produce a setbllck in prices which may be accentuated by the rp.luclance of consumers to operate in the market where due to the speculative demand, they had been forced to pay excessive prices on the rise: and the I'e!lult is a 7.ig7.agging market which however generally rises highel' after each drop than it had been beforc, It is quite likcly that this typical picture of a boom arising fl'om fundamental causes will be the picture of t~e fats and oils market, and in particulal" of tht' coconut oil mal'ket, dudng the iiI'S!.. hall of 1937, a s all indicntion!> seem to point that way at prescnt, Whether the second half of the year, with increasing copra supplics in practically all pl'()(llIcing coun tries, will ('ol1tinuc to bring rising prices, is n doubt.rul issue, and must be left unanswered fol' the PI'cS~t, Too many factors infl\:ence the mnl'k(.>ts and ~ ~n'eat many of them arc as yet uncertain, It is generally hoped that the forthcoming Philippine-Amcricnn T!'adc Confchence will be able to achieve the (.>orrection of what'ls considered in the Philippines, a heavy burden to bhe people ~f these

261

Island: The excise lax of 3c pCI' lb, on Philippine Coconut Oil. This l(.>gislation was bl'ought about shortly after the passage of the Tydings-McDuffie Independence Act pl'oviding full enjoyment of the c~isting free trade lor the Philippi n'.:! Islands lor the fil'st hal f of the ten-ycar tmnsition period; and we cannot help pointing out that the about-face of Congress at the time, caused nothing hut pain<!d bewilderlllent in the whole Filipino people, The proviSion of the act which gave to the Philippine Government the proceeds of this tax,---of which, as yet, not one cent has been paid-with the condition that such proceeds may not be distributed , either directly 01' indirectly, to the coconut planters, did not better matters much, But apart fl'otll the fact that the iml}Osition of thi r:; tax was consi(lcl'ed a sUl'pl' isi ng change of policy, it appe,u's to us that it has not served any useful purpos!' as far as th'>:! United States 31'(.> con'Cerned , If this tax was imposed for fi scal reasons, the provision gnmting th<! Philippine Government the full proceeds would make it appeal' that the U,S, Congress took it upon itself to provide the Philippine Gove~nmen't with n source of income which, after all, tl\e Philippine Government could have ta p-

SCieNTifiC RESe"RC Ii fOR IMPRovBn

I!'lDU~T R IIlS

262

T H E COMMERCIAL & IN DUSTR IAL MANUAL

ped by ap propriate legislative action if it had been willing to ri sk the crippling of an industry which provides a livelihood 1'01' probnbJy one-third of the entire population of the Archipelago.

too cX llcnsive for use in soap. which is all the more objectionable as coconut oil is one of the few oils which impart the excellent lathering qualitie$ to soap that the public has become accustomed to; and the fact that no fat 01' oil produced in the United States has the same qualities, should havt: pI'evented the legislators from making it necessary for the Soap industry to su bstit.u te Philillpine Coconut oil with other fore ign oils the qualities of which '.\'ere not up to the standard of coconut oil and so tended to lower the quality of the soap produced. T h i~ argume nt does not take into consideration that it ought to have been evident that coconut oil from the Philipp ines-after all still a possession of the United States-should be protected from, mth er than exposed to, competition front other countries in whom the United States have no direct intercst. And the claim t h at imposition of a tax higher by 2c pel' lb. on coconut oil of other than P h ilippine origin would effectivel y p rotect Philippine oil, is unfounded in t hat the compctition fol' coconut oil from the P hilip .. pines does not come from foreign coconut oil only, but from a host of other .. foreign oi ls against which the protection of 2c did not a p ply. And besides, facts have shown t hat even the 2c additional tax docs not prevent the importation of fore ign copra, as il,l October, 1936. Malayan copra was sent to the Unifed States, and as this r eview is going into press, reports of large purchases of Dutch East Indies and South Seas copl'a by United States crushers hRve

If it was imposed for the purpose of reducing the impol'tation of l"hillppinc Coconut Oil, order to Jll'o\'ide I'oom for expansion for domestic fats and oils, this object was manifestly unattainable as the United States has never produced-not c\'en during the worst depression times when domestic consumpt ion was at its lowest-sufficient quantities of fats

and oils, and allY reduction in the importation of olle foreign oil would have to be made up by increased importation of another or more. If it was imposed with t h e idea that a heavy tax would tend to render more difficult the competitive manufacture of butter substitutes, the contra· ~'Y re~u.lts have bee~ achieved; for while before the ll'npOSlbon of the tax.. about 70 r ',; of all coconut oil impol·ted has been u~d for non-edible purposes, after the imposition of the tax, with imports hal'dl y reduced, most of the oil ,\>ld is used for the manufacture of margarine and vegetable lard while th~ consumption for soap- mak.~g has dwindled to a minimum; besides, the im!,o ition of the tax with the e'(ception of denatured c conut oil would have been amply s ufficient to achIeve this object, and would have prevented one of the adverse effects of the present act consisting in renderi n g coconut oil

EXPORTS OF COPRA CAKE AN D ME AL P.. ihc: Co,,, M,nd. Cob.

Shipp.: .. Philippin. R,finin, Co., lac.' .. Sp<.n.w.Kcllnu 6< So~. (Phil .). Inc. Ph,hpPIn' Ca .. J.o Cu, Pi,n" ., .... ... LUlon 'nJumi.1 Co'1"',,,ioo M,d",.1 & Co," ......•. Lu Do &: L" YmCo .... S.n P.blo k. '" Oil F... ary .. C."..o. \lid.! &: Co .• loc.'. F. E. Zudli,. In • .'· •.• C.lomb. Su,,, E"",·. Ikhn. M,,,,,, A: Co., H. Ur Pin, Co .. Ch .. wmco,., .. 1..00 AnI: Chi,n" L'Bun,OilCo ...... ,. . C.. G,n, d, T.b,co. d, Filipi...· O.b" Sh'ppe.<-191}. .•. . .. ....

~.047

15 .732 9.071

M.".r""",",

9.lO7

A,ho,ic Co... M,n,l,

'"'"

6.611 1.9}!

",. '"

Gulf Pam M.nil. Cob"

..,m

'".,.

1.4H

,.,

~.1i8

15.142

~.149

41 •• 58'

·IQcl~d .. ~}5

...

"" ... hif'PCd '0 Hoaolgl.

. ""

25.1H

I.no

12.984 9.176

USB

4.1W

1.436

L717 1.()46

1.165

W, '"

'" n-

'"" "

102

"" 11.796

1$.1~9

22.4506 9.101

5.0)) S.5H

'.= '."" ''''' '."" ,ro '"

'2.:IOJ .>00

1.~18

\,212

ro,

1.nS

Toul Mel.;' Too" .

Chi n. '" J'PIO Tau lMmi, Too. ,,~ M,n,l. 1915 19.101 ~5.871 -10,551

",.

·"il\:..

Eu,apc M.nll,

110,511

1.2)0 1.876 U.716

'00

'" '" '" W

IG),031

RECAPITULATION Po,,, M. ~il,

C,bu To •• 1 M.nitTo ••.

P"'licCou. ~1.~51

•• 149 41,6(;fI

"'''.';0 Co... 1.111

1.19S

,,."" ....

Europ<

Cbio. &1'1".

11.79fi lU.9

. .161

57.I~S

'" ""

Gulf Pa ...

To,,1 M:tri: To., ,,~ 1915 19.7>l

».n5

".W 23.745

II O.SII

101:O!,;

PHILIPPINES nathed us : it must not be forgotten that the equivalent of 2c per lb. of oil is only about 1.25c pel' lb. of copra, and while during 1934 the extent of such a protection may have appeared sufficient due to the fact that copra prices were just about that figurc-1.25c pel' lb.-today copra prices have soared to 5.50c and possibly higher, and the protection has dwindled from 100 S~ to less than 25 '70 ad valorem. The tax was evidently imposed in order to raise the general level of prices of domestIc fats and oils, and although several oil seeds and fats had been omitted in the originnl act, these gaps were filled by the passage of the Bailey bill in 1936. The purpose of raising the price level was a very commcndable one, as prices of fats and oils had sunk, at that time, below all IH'Opol'tiollate levels, and it is plain ~hat such a mensure was meant as an emergency device.. Copra Exports: The compal'ison of 1935 and 1936 figures show a decrease of shipments to the United States from 211,386 metl'ic tons in 1935 to 175,906 metric tons in 1936, a drop of 35,480 tons 01' nearly 17 %. The proportion of total shipments which went to the United States~howevel" shows a decrease from 82.35'1.. to 62.5". Shipments to Europe rose from 44,090 tons to 10 ,768 tons, for a gain of 56,678 tons or 128.55'iL European shipments mounted fl'om 17.18 r ;. of the total to 35.8% in 1936. Noteworthy is the advancement of Manila to second placc among the export ports, which reflects quite clearly the fact the Manila Mills had t'o let Im'ge pal'cels of copra go due to their inability to compcte with Europcan Export equivalents throughout the first half of the year. Oil shipmcnts as compared with 1935 show a S!1Ulll decline of 3%. Shipments of oil to EUrope rose from 0.68% of thc total in 1935 to approximate_ lr 2.5% in 1936. On balance, shipments of copra caKe to Europe declined fl'om almost 68 '70 of the total in 1935 to less than 58% in 1936, while shipments of meal to the United States show an inCl'ease from less than ;;2(0 in 1935 to ovel' 42 7r in 1936. The change in proportions came about after July, whcn in conseqllun~e of the drought in thp United States a considerable shortage of cattle foods had developed. . S~ipmcnts of Desiccatcd Coconut show only a slight IIlcrease in 1936 of about 4",4. over 1935 figures; there is no doubt that thc incrcasc .would have

263

been luger had it not been for the rapid rise of copra prices during the latter part of the year, with a simultaneous decline in production. The bulk of the shipments again went to the U.S.A. where Desiccated Coconut is fu1iy protected against foreign competition. The year 1936 shows a decrease in stocks on hand of about 387(1, due to the decline in production during the latter part of the year. Local consumption of factory-made coconut. oil decreased by a littlc over 8 % which is attributed to a dccrcase in consumption duc to the l'al)id advance of prices to which retail prices had to get adjusted. The compal'ison of total values of exports will give the following average pel' metric ton: 1m

1Jlf

I' 86 l< 14992

l'IOl .(lQ 17) .70

JI93 WlJI

249.10

H .&o

Comparison of figures for 1935 and 1936 shows that the numbel' of provinces where In'oduction incI'eased is about equal to the number of provinces which show a declinc in output.. The increases in production come from val'ying causes; in some prov_ inces they denote the coming into bearing of ncw p1,antations, in others simply the fact that at; thf; higher pl'ices prevailing during 1936---especially thc latter part of the yea I'- planters, who in deprel'sion times found it Unprofitable to market their coconut" in the form of copra, were ablc to reap more gaill from making copra. Figures on planted area, number of trees ~nd numbcr of benl'ing t recs, as well as the figures on nuts consumed for food, home-made coconut oil and Tuba are compiled by thc Division of Statistics of the Department of Agl'icultul'c and Commerce, and we wish to thank MI'. Antonio PCfHl, chief of th is Division, for hi s kindness in letting us usc his figures.... wc gather that all thc tl'ees plantcd in 1911 were in bearing in 1919, i. c. after 8 years: while the total number of trees planted between 1919 and 1920 only matured in 1935, 01' after 15 to 16 years.... The fact that these figures are compiled on taX-l'etUl'ns, and the fact that these taxreturns arc not nnd cannot be checked by I'cvcnue agents, makes us believe that many planters tend to delay declaring theil' new bearing trees; coconut land is taxed only when bearing, and the assessed value for tax purposes is generally so high compared with the rcal 01' mOl路tgage value, that we cannot blame the planters fOI' hying to revise theil-

THE COMMERCIAL & INDUSTRIAL MANUAL

264

. "'",.If... ~r:;~'

declarations dov..nW8I'd.

909.900 716.900

I.I~O.~OO

6S4.1oo

8.714 l.U<

<.401 5.101

I.S13

M/.e

1.105

4.lhl un, 953.700 1.195.100 U<} !.11J.l ',Jr6 The total value of coconut p roducts shows an JJoly I.l51.1oo 1,156,900 10.009 ).172 >,m 809.100 819.700 8,461 11.l9O 1.180 4,1ll appreci ation, in 1935, of about 4S.5 % over 1934, and Scp!<mbo' 871.-100 1.41!MO'l 1,9}1 1•• 96 "m 1,11* we have no dou bt that a further increase in value OC!abo," , 1.166.500 )101.~00 6.019 6,611 l.101 4,':1 Na,',,,,bC1. 699.700 872 •• 00 11.011 2 6 ,8).8 l.ll(; ',," will be noted when the final fi gur es for 1936 arc Ta uh , 10.865S00 II ,0,0.100 104.)80 85.819 H.)51 listed. 1£ will be gather ed from the monthly anivai ... figures that while the fi r st few months of 1936 seemed to promise a bumper crop, the decrease in The exports of coconut products it'om Ceylon , arrivals during the latter part of the yeal' reduced and here we wish to draw attention to the large it to less than the expected total. Noteworthy for exports of coil' fibre and coil' yarn, a material which exports from the D utch East Indies is the increas.! in the Philippines goes practically all t o waste; only in Copra shipments; while the decrease in oil exports an infinitesimal part of the pote ntial III'oduction is coinciding with the increase in cake shipments clear· being utilized at present in t he Philippine Islands. ly indicates increased domestic consumption. . ... The most difficult part to esti mate is hom ~ The figu res given for eXpol'ts from Malaya in- consumption, which varies considerably from one country to another; the consumption of coconuts pel' r1\ld~ a large qu,wtity of transhi p ment copra from the Dutch East I ndi~s; th~ Malayan Agricultural head of population is estimated in Zanzibar at 365 Joul'l1al, while mute on d~stinatioll s gives the follow_ per year, in Ceylon at 250, in Malaya at 1to; in the Phil ippines, it would appea l', f r om official figing figures for net exports of coconut products from i\lnlaya for the 12 months, D~ce1llber, 1935, to Nov- ures, to be only about 14. We therefore submit t his ember, 1936, compared with the p receding 12-months table for what it is worth, and should not like to have anyone cite us as a source. period: .... The United Kingdom, Germany and France acc9unt for con'siderably ovel' half the world imports c.,,~ c."•• , 0,/ "JI)' 19)) " I'HI' IJlJ / f of ~a ts and oils. As both Germany and France do T•• , .J 2.ua /", T•• , 'll.UO i! •. their trading in London, with the possible exception (},.,..,b« .. 1.101.900 8.925 16.197 2.)<7 ),905 of produce of the French colonies, the importance J,nu,," ,. 71S.7OO 962. 11 .156 7.l92 2$H ).IH F.btu..,.· HSS ~}~ !~t~ I~:m !:r~ ~:~~ ).7;9 of the L ondon market and its position in the inter~"r<h

',""

SYNOPSIS OF THE CULTIVATION OF THE COCONUT EXPOk T S

CULrIYATIOJ\' YEAR Ate. C.lti~" .d H«", ..

1910 1911 " 1912 191) 1914 . . 1915 1916 . 1917 . 19L5 1919

16-4.190 208.480 nO,680 21).210 145,950 26U5O 110.no lOI.110

m.19O

,..,~

}99,olO 417.960

19!~

"",-

1921 1922 192) 19H 1926 1927 1928 1919 19JO .. 1911 19H 1911 19l~

19)}

".w.~70

4S6.«O

~n.o5O

485.0JO ~.01O

51}.SIO 511,Q.l0 550.840 S61,4'\O 566.100

C'OO.,oo

,,",'"

608.160

Ta,,1 N.mt ..

of T,." 11.8111.S40 41.6\lS.I6Q 46.1}6,)~

4<.6-41.410 '9.190.):0 51.819.680 54.IH.85O 6O.2H,oso 66.218.400 73.720,100 79 . .f06.100 1),j91,9(O 84.536.710 B6,707.)!(l 87.460.(10(1 89.6)7,i7l) 91.90S.7oo 9•• R77.740 9M}6.)10 101.S27.0lO 10S.I69.IJ.IO

Numbo, T,<c,

H.",",

24.12~~~90

2l!.921.710 14.·Z.,550 n.65O.6«l 2l!.860.530 19.12O.\l4O )0.965 .• 70 }l.ln.oIO 'l.m.41t' '1.5S5.410 '6.·59.IM 49.319.910 49.1lO9.)SO 51.1S~.«(l

~'. 1 6U80

H,6'\O.4]1) 58.'14.)9(0 61.001.)90 65.081.Il00 6II.73 •. 1I0

1 07.~.'20

69.~)1.89O

107.916.120 1I<.OSl.100 115.\)9.)00 115.)11.400

71.541,<90 7l.l-5.SOJ 74,)71.100 7S.'I·.:WO

,.,

'.,

Car.. E'I"'",d V.I., Pua.

Q.'"lUf M«, rron. 110 .• S< 141.148 ];2.792 82,1,Q ".145 139.(9) 72,2n 91.180 55.062 2:;.09< 15.80) 15O.llS 171 .052 107.1)1 151.,., 14S.91i 176.980 196.414 !la.4l1 169.652 171,815 IlS.6)7 1)6.0711 )10.120 lSl.)49 256.611) 281.170

21.278.(.98 26,0)9.114 2S.166.9}2 19.09I.HI 15.960.540 11.12U09 14.2)1.9"1 16.654.lOl 10,1n.OI9 8.8)9.)16 7.4ll.741 26.146.91) 28.106.146

».49'.998 lO.70).7~

11.717.'~

)7.11~.'6S

)771) ."11 '4,5~4.071

H.BII,9l1> 15,~.45O

19.)20.070 10.l76.051 1'-891.590 17,~.50.8

1l.IU.99) 28.911.110.

Oil E, poned

C.k, &: M"I

Q.'""'!

V.I.,

5.010 11.94) 11•• 6-4 16.091 <5.198 115,U: 1)9.9;) n.571 90.291 107.208 69.181 108.716 10).110 120.111 142.84} 1)9.• 91 191.054 H7.751 161.501 IIl.6H 160.111 147.7i1 16).82< UUOl

1.192,678 l66 5.6-41.(0) 7.8)8,469 22.818.294 6).)2li.)17 1l.l19.loIJ.I 46.sn;,)} )2,10).0)6 31.4611.971

~k'.

Ton<

p,,,,,

~;."'.[!';;'.

E~pot,oJ

V.I., ,~.

~.1l8

28.1~1.1~

17,612.(161 )9.64<I.m H.690,41) '7.281,()}) 44.6)7.4.0 5M95.1l0 )7.)81.00) )1.065.190 15.DSR,9f.8 18.191.918 0.693.011 1<.:;61.531 21.m.UXl

.."" '"

H.597

16.9'11

••. ·19 67.146 67.503 SUI) 8),1)6 90.224 84.S9! 11).)86 90,69) 101.1~1

nOli 100.;1 10).;;66 un.oll 110.511

.,m

,"',

2.17).471 2.)9,.lll 1.208.9lO 2.~n.2!lO

2.361.740 2.99",920

~.o'\O,)&6

4.962.410 S.921.HO 6.916.S4I> ).0$4.~8

}.(I6S.4lO 1.J(W.'99 1,129.911 UlI.682 1.lli9.a!l1 ).71U~!

PHILIPPIN ES Th. u hp. ,..,.Ph ,liPI"" lmpot' &: £' 1'0'" 0"'0 Coop''''''' ''''0· ".,ion ,,_ ........ y<~ H., T.. dipl Co<po""On . ,

nlltionai tl'Ude of fat s and oils C31lnOt b. ovcl'crnwith the exception of butter , coconut phnsizt'ci ..

to be the most impor tan t as far as potentinl production ;, conCCl'nc(l. We must point. out, have been unable to obtain comhowever, that plete data of all co u nt l'i ~s, and ;( ;t should b. possi bl e rill the gaps, tho r esult may b. a change ~eems

oil

265

0.,;";';;.:"

M" ..no

w« a"" HOI>,. II. de E",.i.,., loc •. , .. Phihrl''"' R,6nin, Co. In ................ En, Bio J.", I...... Li SoD' Gi,p '" Co., lnf •.....•...... " •.

of the piclul'c in that possibly other oils 01' fats may be more import.'lnt. I t is quite safe to say, however, that coconut oi l is one of the most important oils in wo rl d today, and that upon maturing of all tho trees planted, ,n inc-rease in the f,\"oduction of coconut oil ;n the world ;, to b. expected.

G~"<tt .. H" ... <>o ••• Coco PhnlC .. !n~,,, ..,o,

Co •..

l>h''l.""L;,;;.::::-··:· N",,,o ... 1."" "'m •. Luw" [ndu,,,i. 1 ,",.

.h.

1'<'<" '00' ._..

In.< ........ _. . ..

W .. , '" Co .. [0, :

H.p,on O"b

f'.,i!r

Clo. em. d,

Go."

n b.eo,

I,It~,n"

Th,

p,Ot'''' . . . G.mbJ,

T.. d'n~ Co.'. Go,, ' oc<> H« ... """ln' .. Ur M«i.o &. Co

.\t.o",

1I,1•• t;' G.I! Go." p""

I'< Co.

0, T, .'< Co ~,(b« G.n L,tU T"n T, o,,,, Co

rum&.;n;: t!'\~~!JIco:" TLItlIL' lI,n~ & Co: JO"l",n C""o lI. Co. ~I.nucl Ill" S" [I Dou.io Od WOII,. ""!lh. TId! '" Co. L,J. o Yo Chu"_ It'"' Son", Co,. B'n I< Chu,,,. lo c.

16,968 ll.a8-1 11.9~

ILOIl 7,'lS 14,9'4 9.05)

11.07~

HOI

7,Hb

19,885

'" '"on

ro,

1.110 4.n)

'.'" I.9S)

1.616 l.m

) •• 96

~.9I} ~.816

~:m 1~2.

U,I9 1.115

T•• , 191'

70,12~

).1)6

Il.ns 7.7S1 6.021

'.'" l.5sa ).0101

),m

JA9J

'."

'.* 1.1.8)

J.IU

I,U}

1.117

1,111 %,

1,)9)

LM5

...

1,411

,.,

'" '"

.00

.,. "" '" .,.

""""

.,.

",.

Toul M:rd, Tons" I2S,711 20.,87 19,691 100.;611

'.-

16.662

.. z...,bo,.,.

' 'J

Cobu .. I>l>n'''·.

).In

l.658

S.ns

"'''

~~I';E;~;;-

4.I4S

Dum"",,, T,b,co· .. D~.ao •.. . 1. ..

.. :t:.:

',(l52

).167

f'."pr

C,."

RSn 2.09} ~.1S-1

11.'16

'.m 8.0i; 6.751 2,915

<t'.'.~,,,

Go.II

G.lf P.."

E.,."

I.S!!

'" " ",.

. ..

·.71}

'MoI 281.)70

1~.68)

a,h" T. t.I.I!/IIi,T,n c..n"",, /9J' 11'1

8.~!19

l o.}96

'.m .,

72.,52 !7.llO

).7~~

:.769

1.194

1 62.1~~

ISO.)"

1.19~

10.417 14 ..f07 12.719

11 ..·SI

..""

"" ••618

l'JlS

8.0017

6.1l 4 10.599 R.}O;

7.m

~.·9)

"',.

1,190<

'" m '" '" '"

m m

l.Il'

1.7~! 1,~11

I.H7

hidro M.1l0,,,' . Cho .. S• ., Cb.y __ .... O,b" Shipp<<I-19)s.

...

"" ,..., ., s.an

2,951

~~,'"l~:r~! ~~:~~f.. ",~~ '" i",

2MS3 11,778 1,1l6 18,)71 1',091 IUOl H.6S6 n 16.78-1 10 .) ~ 16.642 15.0n IS.761 1).901 1).1011 10,S18 1,~;9

l.OI!

1.7.8

Co, .......

l.IS9 S.n7

4,759

'"',m

/Ie S,..,o· ,on. [nc .......... ... ""d.o ~I""I<., ...... A,k,no. KtoU '" Co" loc .........

T>t.I,IJ.,'Ir

n,U7

1~.S9~

8.195

~. ~.I6J

2,)11

O.h" E"' F' Go •• "'"

\,016

1. ~17

Eloulol< Y ComF'O".

"'1""" Coco"u, C~.;::. Jh'11'"

.....

ITS PRODUCTS, DERIVATIVES AN D V ALUE 1910-1 936 DDMESTIC O"i<u'cJ Coco"., E.p.nod

Qo.nt"1

\1", To ..

V.!., 1">0'

M.n.'"",.,j 0,' """"mod loc>lh' V.!"'

Qua.,,,, M« . Ton .

I"",

r':l

':l

'.'" ~.13'

1l.ill IS,18}

12.m

17.m 1B.lll IMCIQ 16.106 16.696 18.1>61

"'"

)01,719 ~

<19,l4S 1,M6.147 ). 197.119

!;l

1),116 14.016

~,117.7~6

~.)I'

1,700.120 S.6}4.6)1 6.491.61S MUJ') 7,16).)00 ).714.141 l.llJ.110

10.'~

}.'~.I60

<.671.6S8 7.9U.0}8 1,95&.S92

7,S)I) 8.679 lJ.015 1}.916 lUll 18,101 19.908 11.1}',1 3J.(\69

~.n

U16.9}o 4.81U)o 3.1$9,)10 '.))).681 1.'91.4)0 1.m.UO 6." 7.0IXI .,016,7'8 4.l)6,110 2.411.)60 1.HS.IU U9S.543 5.647.562

6.ODI.664

CONSUMPTION

C...""." ,,",,'''mod for Food Qua.my

V~I",

(1000)

,,~

HotU,·M.d, COCOQu,

'" Qua""'l lit'"

)11.6011 ISMSI 911.261

6.4S4.)5O '.6049.'10

6.991.5io 6.60l.9iO '.86S.IOO

HMSI

},919.hO 2.510.160 1.097.580 2. 171.HO 1.'07•• 30 1.l27.190 l.lOS.1!O }.6J-6.J.IO ).951.020 1.0sa.OlO 1.91).760 1.616.900

5.010.~

6).OSS n."1 61.S I& 64.586 91,612 ;S.))\I 5-1.116 81.SS6 6II.lJ9 SMS6 4S.S83 110.6"18 1-18.159 160.176 16).211 llS,'1I 21l.9116 168.781 165.181 1)8.476 1'IJ,870 \}I .o-H

,.)

2.817.180

).8)(),1$0

5,199.050 6.111.290 6.28i.610 U6).9,SO 6.161.610 ).6lO,O8O 2,l1S.ilO 1.5-010.150 1.6,c;.)95 1.11011.811

,.)

}.S95.'lO 1.175.630 1.688.)00 1.6lJ.690 J,55S.110 5.1'!,21O U79.~5O

1.706.710

1.812.2JO 1.576.710 1.865.710 l.99l,' SO 1.187.810 1.97).710

1.9)),SSQ 1.619.6lO 1.874.51 0 1.971.nO 1.614.S'IO 2.)lO.6}O 1.)TI.810 1.00.510

,.)

V.I.,

1',,,,.

1.4'8.S60 1.9SQMO 1.-I6O.'lO 1.100'.160 I,U5.'10 66l,490 713.190 all.810 1.}11.190

1.871.100 t.71!.)10 1.427.)10 1.087.6)0 911.790 158.8-+0 8SI.660 8)9.180 &JU6O &01,150 6(905)0 66U10

"'.0<0

HI.96O

"".~ 161.5)\1 )10.7611

,.)

TOTAL V,I.,

T.I.. Qu,o",y L",,, 17M8MSO )7.649.580 lU~2.910

V.I"" P"o. 6.01) .'50 1,881.,90 1.992.1-10 2.101.190 ).SlI.IOO 1.)14.1)0

1'"". )}.~,'SS

)OSI.91' )',707.)U lO.91l.S16 18.<6S.516 }),948.8U 17,lOl.270 H.89'.9U

'2. 1H.870 5'.OiS.)90 )1.)71.l10 5l.9lS.610 4).674.S90 &).911.990 l OO.lIS.S10

1.181.100 S.174.0)(1 10.071.810

9S.06S,8-1O

11.'91.670

76,9as.)S~

10).$S4.1-40 10M)I,OIO 1l1.801.5SO IH.S81.6OO

1I.}68.1lO

71.n9.611 71,SI&,9)5 87.)51.119 59.)96.164 94 ,6)8,828 112.10S.826 115.555.8-88 HI.4'16.Hl 121,701.649 9s,sSS.709 71.'99.867 40,7 16,8j8 SI.I09.94.) '7.'lJUOi 71.199.151

a1.~12.1OO

99.001.810 1(11.712.910 1I1.69.i.610 IIU47.)lO 11 6.796.• 70 99.HI.570 9),.01.>10 &9.36S.190 114.451.l<XI 1I0.1II.000

,.)

UU.110

~:~~:~

&.170.610 7.107.1100 9.119.,10 10."'5.910 9.9J.S.0IXI 12.699.9)0 I1.SOil.l)O 7.8-+0.5)0 4.!I67.810 ).98).970 ~.97a.092

,.)

I.SU.5SO

&),995.lS~

97.820.7U

(.,

TH E COMMERCIAL & INDUSTRIAL MANUAL

266

,.,

110110-

),4H

Mub"••• Bul.,, '·

~,6H

C'II·y·"-MII,.,,,' ~""b.n

'" '.1.102

Gub .. ..

1.705 1,629 1,616

p"rt Ie.: Jolo . _, G .......

Ro",blon.

1,61~

Si.in .... HoaJ·su, Boron, ••.

..'"

c. .. n,u,,,',

2,(1)

'.m

l.a7~

2.661 1.)61

7.10-4 5.6}8

1.016

4,614

." "" '"

1.)95 ~. ,~

POlO> ••

Olher 1'"",-1915;"

'" '"

To •• ! M«ric Ton", 11.5.7Z7

'.m 2.IOS 1,91)

1.619 1.616 1,6H

Mtl 4.811

,...

10,.87

19,6\12 100,768

~,696

g':f:'·E.,~~!~:t'sd.!~.c~~ °M.·~;.~·~9;:~L.061 'OM cqu,nl,nt t" Cop .. ., 18% .

1.J.61

To"I._ ... ., .. , . . ' .. l ... COrta j",P<'uccl ,n'" .b, PhIlippi"'"

2.19-1

I.US

1,489

\'189

III,SOl

Toul

~j,"fu~:~d'~~~t':~"i;;~.::H;~ i:~:~~; ::'

1,41\

11,15~ }

H.2.a

'."

IjlL

..'."'" ,.",,.

1.~1l

SI!>."g

4,195

6, 297

5.m

<quiulc" " o CoP " U 58%.

5"6JH 51,961 }

17.014

~"" ~HoUl

Arr<0.i ...., C<op of COPRA du,ie, 19)6.

614,911

E"'~;;:,,~d'{r~':'[I.~<I'~:~~;lNc:mI::Dtucu 19)6

2111,);0 l56,683

1915

Commod",

Cop" ',,,., ... . Ta,.1 Cop.. al [he Phillpp,n,.

To.,l M.If[.T"u.

F<>< ,he y<u 19J6

(Can • .,I«I ham E. """ Fl8uIU)

COCOO"' Oil".. . .. , . Cop.. Cak e /I; M.. r, .. Oc.ic.... d Coconut •. ,

181,}70 1:18,801 11 0,511

1'18,981.110 1M98.100

~.'"

156.6al 161,8H

l.nS,ln

10J,OJI

8,958.S91

l-l,71.9

"6\1,173,174

18I,l7

J'U,IU,9!I) 14,561.51" 1.289,SSJ 7,919,OJS "57,916,451

., •• ISS,501 ' 0" )4 ,5)4 (00'

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PHILIPPINE COCONUT ASSOCIATION' H E PHILI P PINE Coconu t A ssociation which rc plnced t he old P h ilip pine Coconut Pl anb~I'S' Associa tion , Inc. and now includes as members eXllol·teI'S, mill ers and industria lists, hilS alr eady made a propel' stal·t of its long-I'l\nge pla nning f or the development and protection of t he coconu t indust ry both hel'e and nbr Oll d, a ccording to F I'l\ ncisco D. :\l arqucz , Chief of Agl'icultul'ul E xtension. Bu r eau of P lant Jndustl'Y and !;Ccl'etIlI'Y of t he association. In accol'da nce wi th the plnn approved a t its recent convcn t ion to establish local cha pters in each coconu t province, Director H il lirion Sila.\'un, of t he Bu rea u of P la n ~ r n dustl'~', working in close cooperation with the ussociat ion. hilS asked in ci rcullll'S sent to bureau field Illen to take steps fol' the forma t ion of locnl chnp tel's of the IISSOClatio n ill neariy all coconu t industl'Y l'eJt'ions. As a mea ns to stabi lize the coconut indus t l'Y, thc a ssocinti:JIl fll vorably endOl'sed the Ilbn of c\'~di ll g :!. coconut bOlIl'd wh ich wo ul d r egulate thc copra trade tllI'ough the! enfo rcement of of ficial ~1'lIdc I·CI('UIS\ t.iOI1l;,

. .. T"loon .... '\p. 1I lot . 19J1.

268

THE COMMERCIAL & INDUSTRIAL MANUAL

In order to carry out properly and effectively its program, the association had decided also to petition the propel' authorities that out of the excise tax refund which the Philippine government may receive from the federal treasury an amount of not less than Pl,OOO,OOO be appropriated for work on research and educational promotion on coconut industry and for publicity in America and in Europe. Francisco D. !\1ul'quez, secretary of the association, gave an account of the ]'ecent formation of the Philippin ~ Coconnt ~ ssociation anti its objectives as follows: WHAT IS THE PHILIPPINE COCONUT ASSOC IATION?

The Phili ppine Coconut Association which was recently formed and organized by a group of publicspirited and economic-minded citizens of the country with the cooperation of the government is in fact a continuation of the old Philippine Coconut Planters' Association, Inc. The only difference is that exporters, millers and industrialists of coconut products are taken in a s members in accordance with the suggestions of Ex-Secretary\Conl'ado Benitez of the Association. \ The Philippine Coconut Association may be considered a providential creation, because it has come to life at a time when actual and impending dangers' threaten the coconut industry. It is in these trying moments when an organization as this is vitally needed. The Association was conceived and took form through the inspiration of an unanimous response manifested dUring a get-together of coconut planters and industrialists under the auspices of the Bureau of Plant Industl',v, as a result of the coconut exhibition during the 1937 Philippine Exposition. AIMS AND OBJECTIVES

The Philippine Coconut Asociation is primarly dedicated to serve the best interests of all those engaged and dependent upon the coconut industry, numbering in all one-fourth of the total Philippine popu lation. It aims to improve the industry-to maint.'\in coconut production through seed selection, fertilization and cover-cropping; to suggest ways and means of improving the quality of Philippine copra (Philippine copra i8 of tlte lowest in the world'.!; market in 8pite of the fact that the Philippines is the greate8t e:I:porte,. of this product); and to

foster industrialization and commercialization of the numerous coconut by-products. The Philippine Coconut Asociation, through its various activities, also aims among others, to keep the members-planters and industrialists alike well informed of the happenings taking place concerning the coconut industry, particularly about mal"keting, so that better profits ma~' be realized. This information will be given in the form of weekly, biweekly or monthly news J'elative to the progress and l)l'oblems of the industry here and abroad. IMMEDIATE PROBLEMS

The Philippine Coconut Association has a g igantic task to perform. In the entire life of t he coconut industry there has never been experienced a more perilous and uncertain situation than the present, a more critical period than now. The existing excise tax on our coconut oil and the pending measures in the United States Congress which threaten the very safety and life of the Philippine coconut industl'y demand immediate and united action, especially now that the American-Philippine trade confer ence is about to be staged in Washington. Vigoroqs protests against the existing excise tax which is so unjust and so prejudicial to the interests of our oil and copra abroad should be made. A fight for favorable measures for the coconut industry mllst; be systematically waged. In this struggle the cooperation of everyone concerned must not be found wanting. The Philippine Coconut Association, true to its avowed mi ssion and as a decided initial stell sent on Februal'Y 17th a cablegram to President Quezon in the interests of the coconut. industry. The Presiden t in tum answered the said petition to the effect that he will have the petition in mind when the propcr time comes. Therc is no better step than the one taken by the Association and there is no better assurance of the keen interests of the government than that expressed by the President. Consider further the assurance given by the Secretar)' of Agriculture and Commerce and the Director of Plant Industry when they pledged to help the coconut industry on that memorable conference of February 11th, 1937, in the Hall of Coconut, Philippine Exposition. Very recently Secretary Rodriguez of the Department of Agriculture and Commerce submitted to the Association the bill creating a Coconut Board for study, and asked fol' suggestions so that the same may be passed by the Philippine National Assembly

PHIUPPINES in the coming session. Director Silayan of the Bureau of Plant Industry , on the other hand, has sent circulars to his fieldmen to pave the way for the organization of the local chapters of the Philippine Coconut Association in all the coconut regions. To this end, various researches on coconut production and industrialization arc now being undertaken by the personnel of the Bureau of Plant Industry. Such, in bt"ief is the history of the Philippine Coconut Association, its objectives, its scope of activities, and the dangel's it has to encounter. But the cause it is fighting for is a worthy one that it merits the attention and backing of each and everyone concerned. A sf'l"ony a1ta active organization of cocomtt 1,/u1Itel"s alld industrialists deali1!g in coconut p€H"801li/ied by the Phi~ipl,ine Cocol"mL AS80ciati01l is the need 0/ tlte }tOIlI". The new officers arc Arsenio Escudero, president; Assemblyman Maxim£ M. Kalaw, vice-President; Francisco D. Mat'quez,'-secretary; Dr. l\lanuel Calupitan, treasurer. The board of dil'ectors if? composed of K. Cronke, of Calamba Sugar Estate; Mr. Agudo of San Miguel Estate, Tabaco, Albay; Ramon Soriano, of 327 Eleano, Manila; Kenneth B. Day, of the Philippine Refining Corporation; Pedro Vera, of the Industrias Consolidades, Inc.; Delfin Mahinay, of Cadiz, Occidental Negros; Honorio Roxas, of San Roque, Cavite; Dr. Silvet'io Garcia, former Governor of Sorsogon; Jacinto Valenzuela, of Santa Cruz, Laguna; Gregorio Marquez, of Lucena. Tayahns; Maximo Rodriguez, provincial governor of Tayabas; Jose Teosejo, of Tinong, Tayabas; and Mariano Principe, Lucena, Tayabas. OIL TAX UPHELD THE U nited States Supreme Court ruled on May 3rd that the pt'ocessing tax of three cents n pound on coconut oil imported ft'om the Philippines is constitutional. Justice George Sutherland, reatling the decision. said: "Plainl~' the imposition of t:1X in itself is a valid exel'cise of the taxing power of the Federal ~overnment." Joru.:J.~~J'!1t~ ~103If~'" " The AmeriCAn Chnmber 01 Commerce

269

i!e> concluded by suying, " Whether the payment to the Philippines of the large sums of mone~' which will flow from this tux is unwarmnted in fact; whether the present 01' prospective needs of the i!'lands require it; and other queries directly or indi-

rectly challenging the wisdom or the necessity of Congressional action are all matters, as we repeatedly have pointed out, with which the courts have nothing to do. We find the legislation to be free from a constitutional infil'mity, and there both our power and responsibility cnd." The California representative asserted "we in America claim to be good sportsmen. It was certainly not a sporting proposition to promise the Filipinos free trade to the extent of 200,000 long tons of coconut oil annually and then !!Iap an excise tax on their coconut oil equal to 100 pel' cent of its value at the time the tax was levied before the ink on the president's signature affixed in approval of the Tydings-McDuffie act was dry." The Dockweiler bill failed of enactment in the last session of Congr ess. Several other bills on coconut oil have been introduced during the present session . One would impose a tax of ten cents a pound on oleomargarine containing Philippine coconut oil or foreign oils or fats while another would have taxed Brazilian babassu nuts and at the time increased the Philippine tax by one cent. When it became ap parent in February that plans were shaping for tt'ade conversations between the two countries, Rep. Dochveiler advised Philippine leaders to demand "partial repeal of the excise tax on coconut oil before entering into allY trade negotiations with the United States" as a matter of "simple justice." Otherwise, he declared "the Philippines have no assurance whatever that any trade agreement they make with the United States will not be altered by Congress to their disadvantage." In its report, made public in Februat·y, the Federal tariff commission reported that taxes becloud futu re domination of Philippine coconut oil in the American market.

THE COMMERCIAL & IND USTRIA L MANUA L

270

USES FOR COCONUT OIL EXCISE MONEY' FFICIAL CIRCLES backed up the position taken by Secretary of Finance Antonio de las Alas objecting to the use of the PIOO,OOO,OOO coconut oil excise tax money f::lr the redemption of the Philippine bonded indebtedness. Secretary Jorge B. Vargas and Auditor General Jaime Hernande? declared that there was morc urgent need for the proceeds of the oil processing t..'lX and that unless Commonwealth government could obtain new loans under more favorable terms it would be unwise to apply the fund s to bond redemption.

Both intim:\tc(~ thlll ti'c pnvJ1l(>nts which the national s'ovcl' nmcnt wou\(\ m:lke to the N.'ltionai Development Company and those which subsequently lllay be made available for the purpose would be p d (og·('thel· for investment in the establishment of a merchant lllDrine They hoth expressed t he view that it would be worth having" a merchant marine flee t of an u(\e(jllnte number of ships to handle tanspor tation of PhlliPlline products.

Ml". H erna ndez snid that the Philippine bond issues have fixed dates of maturity and arc weI! provided with sinking fUJ\{ls to meet the obligations when they are due. A ju dicious application of the money coming from the exc' se tax may "firing about adjustments that may mean improvement of the country's economic condition . It was intimated in other official quarters yesterday that government subscription to the capital stock of the National Development Company will be derived in part from the money from the oil tax proceeds. There is due approximately P10,000 ,000 thi s year from the national government for the Development Com pan~'. La st year another PIO,OOO.OllO was due but payment was made only last Febr uary. 1 f t hc Development company should receive the entire su m of ]120,000,000 this year from the national government tiS plnnned, it wa s s tated, it could be used to fOI'm part of the capit.""tl to fit the: p1'opo$ed merchant marine. It is believed, however, that this sum will be insufficient to meet expenses to be incurred in the establishment of the mer chant line. In such a ca se, a portion of the oil tax proceeds may be made available to covel' the amount needed. QUEZON ' HIGHLY PLEASE D'

While in Paris, on l\Iay 4th, 1937, President Manuel L. Quezon, of the Philippine Commonwealth, declared himsclf as "highly pleased" with the deci• •" lIernld". ;\1,,)" 7th, 1)37.

sion of the Supreme Court of the United States in the coconut oil tax casco SIGN If'ICANCE,j O F R EFUNDS

The motive of Congress in providing for the payment of cocon ut oil tax collections to t he Phil ip. pines was cha r acterized as helJlfu l to the insular dependency by Vicente Villumin, F ilipino economist, who commented upon the decision of the Supreme Court. Villamin said Congress earlier heeded the same motive when it gave P hilippine coconut oil a 40 Ilel' cent pr eferential treatment over other imported oils. Since the excise tax became effective, the volume and value of island copra and coconut oil have increa5ed tremendously, and t h2 refund has proved to be a godsend to both t he Philippine governn;lent and the coconut industr y, Villamin pointed out. "Let Filipinos appreciate these t hings and weigh facts when they talk about violations of the TydingsMcDuffie law," he warned. STEPS TAKEN TO OPEN CENTRALS

Antonio de las Alas, secr etary of f inance a nd chairman of the board of directors of the National Development Company, at once t ook definite steps for the establishment of abaca a nd coconut cent r als. Secretary Alas instructed Dr. Manuel L. Roxas, Malacafian a dviser on agriculture, to go to the Bicol regions and Tayaba ~ to select t he locale of the centrals. The abaca central, Sec reta ry Alas told the press is to be experimental in nature a nd will be established in Bicolandia. The National Development Company aims t o help the abaca producer s. Secretary Alas sa id also that a coconut central will be opened in ·rayabus. The idea is to improve the quality of local copra so it ca.n compete with Ceylon copra for the world market. The amount of P250,000 is sufficient for the two projects, according to Secr etary Alas .

PHILIPPINES A SPECIFIC OBLIGATION

A fitting use for a small pOI'tion of the hundred millionR of pesos coming to the Philippines as procecd!\ from the U, S, excise tax on Philippine coconut oil would be to meet the government's obligation to its retired servants suffering from the liquidation of the pcnsion funds for teachers and other government employes, The pension funds were liquidated on the official contention that they were insolvent and that the government had not the money with which to mcet the pensions,

Whether or not the funds were solvent depends on how one looks at the matter, But, assuming for the purpose of this discussion that they were hopelessly insolvent, and disregarding the fact that jf they were the govel'llment was responsible for their being that way, we still arc faced by the unfavorable fact that the government has failed to keep faith with its retired employes and has let them down at the stage in their Jives when they no long1:1' arc able to l!tep out and hew n~w can!l!r.s for themselves and reseeure t~mselves in their nonearning years, We also have the explanation thn~ th~ CX"l1~e \\3.; luck (If funds wit;) which to :!o othel'wil'lc. Now a windfall comes to pr O"icll: fUllus in proportions which never were expected, fund!'> fl'nm a source which had not been counted upon in this light, Officialdom is astir with discussion of ways for spending the cash, discussions wHich concem themselves to a considerable extent with theories of division of benefits between the present and the future generations, It would be nothing more than fair nne! equitable to give a small share of the benefits to thc retiring generation of public servants, sufficient share of it to put the government squa re in it.s obligation to those public servants. In the broadest sense all pens ioners, Filipinos and Americans, are in one general class. Th(!;t'" arc poinl<; of difference, but the large question of their legal and moral rights and contractual claims are fundulllenLuily the same. However, the Americans' case is distinctive as regards the claim they should have on the money which now is about to b~ made available. The money comes from the United States, was paid by Americans to American tax collectors and now it is an American court that declares it payable to the Philippines in fulfillment of a legal and nlol'al obligation. • "n"l1cl;n", )IIIY SIb. 1937, F.dl~o.~1.

2)1

There hus been no official suggestion that a s ingle cent of this money he earmal'ked to mC!<!t obligations, Illoml or kgal, to Americans, but the S\,. preme Comt that decided the cases' involvin~ the righ ts to the money made a special ])oint of discussing moral as well as legal obligations. A moral, if not also a legal, obligation calls fOI' the payments of the pensions which the teachers wOI'ked to earn, The American teachers who signed up to come to the Philippines considered that t.heir own government was morally, if not also legally, back of the contracts they signed. When the pension law later was passed and they continued in the service and met the t;equirements of that law to earn its benefits, they also considered that they were morally and legally assured of every centavo they were earning under the terms and conditions of all the contract;; and laws. That is why they have appealed to their govemment to guarantee them a full measure of justice in the present instance and why they have ever)' right to feel t hat when their government, speaking throngh its highest tribunal, dedared strictly for legal equity and moral justice it uph'~ld principles that should guarantee them faimess. That is why too they have ever y right to expect that fairness wiI! direct that they get their ea rned sh:Il'e of t he cash to be distributed. CO/ltMISSIO;\'£R AOVICES WISE SPENDING OF TilE COCOi\""UT OIL MONEY U. S, High Commissioner Paul V. McNutt counselled wise spending and the maintenance of good crcdit in the disposal of 1)100,000,000 due the Philippines from che coconut oil excise tax fund. Declining to comment as to what should be done with the money 01" how it should be disposed of, Commissioner McNutt, howeve.·, expressed confidence that the government will spend the money wisely and fO I" the benefit of the country, That the 1>100,000,000 oil excise tax fund due the PhiliPIJ ines may not after all be used to pay the bonded indebtedness of the national sovel'mnent with the United States, because the obli ....ations are fUlh' covered by the amortization on si~king fund wa~ the opinion eXJlressed by Assemblyman Felipe Jose, last night. Assemblyman Jose and fOl"lner Representati ve Franci sco Varona declared that a po.·lion of the money sho\lld be appropriated fOI' the development of agt"icultural colonies in lIIindlll\;lo,

THE COMMERCIAL

272

INDUSTRIAL MANUAL

The Department of Interior will submit a plan to the cabinet proposing that PIO,OOO,OOO of the " 100,000,000 coconut oil 1)I'ocessing tllX fund be set aside for the improvement of san itary conditions in different communities of the Philippines. This plan is eX I>ccted to be submitted at the cabinet meeting to be h eld in Saguia this morning.

P10,OOO,OOO FOR

REVOLVING

CALAM ITY FUND

PROPOSED路

Secl'ct.'U'y Jorge B. Vargas announced that not a cent of the 1)100,000,000 from the coconut oil tax will be used directly 01' indirectly, to aid the coconut industry of the country. H e made this st<\temcnt, commenti llg on proposals of some assemblymen to use treasury funds in advance of the receipt of the oil tal' proceeds with a view to helping the copra industry, Secretury Vargas declared it is virtually certain that the government will advance one to t wo million pesos to financ~ the extension of the southern line of the Manila R~il1"oad Company up to Legaspi, Albay, He was also virtually certain that President Quezon will not ,onsent to the use of ?fficial funds at this time to ~l'omote the coconut Industry, "Appropriation of government funds at this time to help the coconut ind\lstry will appear to outsiders as an attempt to circumvent the congl'essional revenue act which prohibits use of the oil tax money for helping this industry," he said, "Indirectly, the industry will benefit from the use of government funds for public works but any effort now to appropriate money for the purpose of aiding the coconut industry is likely to be misunderstood, "I am sure PI'esident Quezon will nob tolerate any move which wil! amount to bad faith with respect to the use of the coconut oil fund. That is n ot his method of doing things." The secretary stated that one definite use of the oil tax money will be a cash advance to the government owned raiJway to finance the construction of about 30 kilometers of rail line between Port Junc, tion and New Aloneros, This project will link Legaspi with i\lanila by rail and will eliminate the water line which bridges the gap between the two points, The railroad management has estimated the cost of the extension project at P2.000,000, If rail lines and other material s from unremunerative sec-

tions of the southern line of the railway are usetl for the construction of the extension project, only 1'1 ,000,000 may be needed, according to l'Uilroad officials. These unprofitable sections are to be ab~n颅 doned. "The extension of the railway line will help the coconut producers because it will traverse th rough Lhe coconut g r owing provinces." l\h路. Varga~ said, Antonio de las Alas, secr eta l'y of finance, has previously indicated that he is studying some way under which funds already set aside before thf: congressional act was [)assed, can be u5'~d for introducing new methods of drying ('opl路a. He said that the Ceylon system of copra drying is far superior to the crude methods in vogue in the Philippines. If new appropriations cannot be made, he intimated, a portion of the 1'680,000 New Industdes Act enacted by the legislature some three or four years ago, may be utilized for installing ncw equipment for copra drying. REVOL\'IXG CALAMITY FUND

The creation of a r evolving calamity fund of PIO,OOO,OOO out of the coconut oil tax refund to be devolved to the improvemen t of housing conditions in the Philippines was proposed by Manuel de l:l Fuente, president of the municipal board. Acting on t he proposal, the board adopted a resolution requesting the national assembly to enact a law for the purpose, De Ia Fuente proposes to extend loans to laborers and small salal'ied employes from this fund, to enable them to bllild theil' own homes, He suggested that preference should be given to victims of calamities. He pointed out that calamity sufferers finrl diffic<llty rebllildill'g their homes for luck of funds, G:mel'ully, they resort to money lenders, who charge them exhol'bitant rates of interest for the much needed capital, he said. Speaking ill favor of the proposal, Councilol' Hermenegildo Atienza, decJal'ed that "the proposal to set aside P10,000,000 of the oil tax refund for improvement of housing conditions is one of the most progressive measures to ameliorate conditions of the masses, We cannot talk of social justice and reform without taking the first step essential to any program of th is nature-the improvement of the housing conditions of the masses," Councilor Jose Advincula declared that "if granted, this will be providential as it ,will inlpr~ve living conrlitions of the poor," CounCIlor Celestmo

PH ILlPPINES P. Ramos expressed the opinion that "it is a right step in the right direction", while Councilor Vicente Alindada said that "it is a good investment from which not only the government but also the nation may profit considerably in the [orm of a healthy and contented populace." THE POSSI81.E USI:: OF THE l\IONEY "

Of considcl"Dblc interest was the statement issued by Jorge B. Vat"gas, secretary to the President, rcluting to the possible use of the oil tax money. Commenting on the suggestion of scvcl'ai assemblymen to use trcnsut-y fu nds in advance of the receipt of the oil tax proceeds with a view to helping the local coconut industry, t he secretary said: "Appropl"jution of government funds at t hi s time to help the coconut industry wilt appeal' to outsiders as an attempt on OUt' part to circumvcmt the congressional revenue act which prohibits use of the oil tax money for helping this industry I am sure President Quezon will not tolerate auy move which will nmoul!t to bad faith with respect 0 the use of coconut oil fund, This is not the metho of doing things," Virtually certain, howevel', is Sect'etal'y Vargas that the govemment will advance one to two million pesos to finance the extension o..f thu southeIT.' line of the Manila Railroad Company\up to Legaspi, AIbay, Consoling the coconut men, ~e said: "The extension of this railway line witl help the coconut producers because it will traverse through the coconutgrowing provinces," A boon to the masses is the proposal of President Manuel de la Fuente of the Manila municipal board to cl'eate a "calamity revolving fund" of 1)10,000,000 to be taken from thl,! hundrcd-million-peso oil tax money, Thc "ca lamity fund," according to Mr, De la F'uente, will help solve housing conditions in the Philippines, discourage usury, F'avorably acting on the suggestion, the municijlal board adopted a resolution requesting the nation_ al assembly to enact a law lor the purpose, The proposed measure provides fOl' the issuance of loans to laborel's and wage-earners to help them build home!; of their own, Preference will be given to victims of calamities. COCONUT l\1t:N I NSIST ON SL ICE " The Philippine Association of Coconut Planters and Manufacturers st;u'tcd a move to get a slice of ·"Gmllhie",

MR)·

20th, 1937'

• "BuUetiu", Juno 1st, 1037, u " ,\ d"~ni!"r" (Celou), June 11th, 1037. Editori.. t,

273

the PLOO,OOO,OOO oii tax refund to the Philippine government, for the purpose of developing the islands coconut industry, Altsemblyman l\laximo Kalaw, acting president of the association, in a circulal' sent out, brands the proviso of th'~ excise tax to the effect that " it shall not be used directly or indirectly for the development of the coconut indUstry of the Philippines," as an attempt, to kill, if possible, thc production of copra ill OUl' countL'Y, If other entities at'e desirous of having a slice of the huge sum, the coconut 1)lantel's, upon whom the tax was levied, should not be discl'iminated against, Assemblyman Kulaw declared. If entities which have nothing to do with thc coconut industry of the country will be given a part of the fund there is no reason why the coconut planters themselves should not benefit in a way from the mOney, The benefaction should not necessarily come in the form of a benefit payment, but to hcll) the industry in some ot her way, l' llO,OOO,O{lO EXCIS E: TAX · The excise tax on coocnut oil amounting to PllO,000,000, 'w hich legally belongs to the Filipino people, will be spent for the economic development of the Philippines, This amount will be apportioned to the different pl'ovinces, according to 'Secretary Eulogio Rodriguez of the Department of Agriculture and Commerce, In this connection the developmcnt of the Philippine coconut industry must be considered as one of the phases of the government program to develop the country economically, The mOlle~' i ~ there, and it can be spent fOl' the promotion of this particular industry, While the intention is good on the purt of the Commonwealth government, caution must b~ taken not to impress an idea on the American government that the Filipino peOI)le are acting in bad faith, Those who are concerned in the disposal of this "big money" must sec to it that it will be spent wisely, If this amount would be properly distdbuted and wisely spent the economic development of this country would become a practical reality, Now it is wisely planned that 1'23,657,000 i~ to be set aside for the realization of the five-year road and highway constl'uction progrum in Mindanao ane! Sulu, The execution of this plan needs no unnecessa.ry delay as soon as funds IIl'e available, The remaining a.mount cun be Silent for the development of the fishing industr~' , and other infant industries

274

T HE COMMERCIAL & INDUSTRIAL MANUAL

goose which now lays the golden eggs is being gl'!ldlIally strangled, For of com'se, if the downward trend of our expol-ts to the United States continues un che~ked, the (:orresponding taxes due the Philippine t reasury must also decl'ease, Thus caught between t wo evils FUTURE OF P . J. COCO"UT OIL 路" which must operate at t he sa me time in the same The reimbursement to the Philippine treasury direction, we have all the more reason to support of P100,OOO,OOO in t he form of excise taxes levied 011 our coconut oil exports to the United States should the Filipino members of the commi ttee now endeavornot blind us to t he gloomy I)Ossibiiilies of the coconut ing to find a means to adjust the economic relations industl'v itself. According to figures r eleased by the between the Philippines and the United States on U11ited 'P rt'ss, Un'iter! St:lt~<; eOI1 !>u ll1ption of coconut the basis of early independence, oil in oicomal'gul'inc during the si x months ending RECI PROC ITY SCHE~lE UllGED ON SAYRE EXPERTS D\: i\1arch 31 decreased by 45 per cent, while thC! conKALAW'S COMM 1T'l'EE 路 sumption of cotton-seed oil for the samo period Official pr esentation to the P hilippine-AmNshowed an increase of 42 p Cl' cent. ican joint committee of expel'ts of a p lan for a tr~~e That these f ig ures are directly related is furthreciprocity and another calculated to do justice tl) er proved by the fact that a sim ilal' inverse ratio the Philippine coconut indu stry, will be made b l, exists between impor.ted cotton-seed oil and importthe commi ttee on ways and means of the Nation3l ed coconut oil from the. Philippines, What the PhilAssembly and the Coconut Planters' Association of ippines lost in every transactio n seemed inevi tably the Philippines, Assemblyman Maximo M, Kalaw, to have gone to offshore. producers of cotton-seed chairman of the committee and president of the asand soya bean oil. sociation, Thus, in t h e first three m onth s of 1937, t he cotC!;hai rman Kalaw said that the public hearings ton-seed oil imports of the l\nited States amounted of t he committee of experts, will enable the legislato a bout 64,000,000 pounds, \ hich was barely t op- t ive committee to present its views on the trade reped by its coconut oil imports from the Philippines lations between the United States and the Philipof 78,500,000 pounds, pines, Kalaw's committee is now preparing data These figures indicate a clear trend towards the showing the advantages of a trade reciprocity plan, gradual displacement of Philippine coconut oi\ i:l On t he other hand, Chairman Kal~w, as presthe Amel'ican market by impor ted cotton-seed and ident of the coconut planters' organization, will soya bean oil. The imposition of t he exci se tax on present the views of the entire industry, with speCOCOllut oil is universally blamed for having plac..ed cial refe rence to the harm wrought by limitation and the Philippine product at a tremendous disadvantage. tax imposed by Congress on this particular PhilipIn addition, the American manufacturers of oleomal'- p ine product. garille arc 1)laying up the protectionist theme by all, 'fhe tl'ade r eciprocity plan, according to comnouneing in their adverliflements that their products mittee members, has been found by legislative invescontain nothing bu t domestic oils and fats , tigators to be an ideal sul.;stitute for the present free Nor is coconut oil tlll'eatened only in the field hade arrangement which is being gradually restrid~ of edible manufactures, Previou s l'eports concerned bv the United States Congress, ing the use of this oil in non-edible products such 'The 15-year trade treaty whi ch will govern thl' as soap have also shown t hat the position of the trade relations between the two countries, as sugPhilippine export is a lso under a ssa ult mainly by gested by President Manuel L. Quezon, is also b(!steadily mounting American imports of babbasu oil ing carefully studied by Kalaw's committee, TI~e颅 from Brazil. proposed trade reciprOCity plan may embody the 1:>So while we may be inclined to feel that the reyear agreement, it was also said, imburscment of the processing t.'l.X to the Philippine US E Of' OIL TAX REFUND government assuages the imposition of the tax itself, ON June 24th Pres ident Quezon intimated conwe cannot afford to just calmly look on while the cerning the uses t~ which the $50,000,000 coconut oil tax refund will be put in the Philippines,

that nC!cd the help of the government. Here is hoping that this P11 0,000,000 coconut oil excise ta~ will be spent to the greatest advantage of the country and people.

PHILLPPINES He said he would devote part at least to the pur. chase of large landed estates for resale in small parcels to tenants, and the "readjustment of Philippine economy as the joint American.Philippine experts' session presently may decide." The state department simultaneously announced that the treasury would transfer the funds to the Commonwealth. PROGRAM

OUTLINED ·

The state department made public a statement from Quezon: "I cannot, of course definitely assert what the National Assembly will do," he said, "but in a special message which I shall send the Philippine Assembly and on the authorit.y of which the National Assembly may pass a law appropriating said funds, 1 propose to make the I Bowing recommendations: "That so much then~after as nccessary be appropriated for the pUl'cha\e of all large landed estates fo)" the pUl'pose of res lIing them in small parcels to tenants of those estates, or in the absence of tenants to such othel' Filipino citizens as may desire to purchase said parcels of land, th~se parcels in no case to exceed more than 250 acres; that so much thereof as necessary be apPl'opria\ed for the purpm:e of establishing credit under such terms and conditions as the law may prescribe to purchase of those pal"('els of land for working animals, agricultural implements, 01' in general for the development of the land, "For building I'oads ill Mindanao and such other undeveloped islnnds of the Philippine Archipeh!g'o as may require uI'gent attention j for building schools, pnJ't.iculal'lr in I'lll'al districts to pJ'o\'ide vocational education and for the establishment of government institutions to take care of the insane, the indigent, the aged, children, and other individuals that mny require care of the state, $30,000,000 I NT,\CT "I do not think that for the purposes above mentioned more than $20,000,000 will be necessary so there will be left in the treasur~' $30,000,000 which we shall keep intact to be spent fol' the readjustment of Philippine economy as the joint committee of Alllel'iean and Philippine experts Illay l'CX'ommend," •

"1I~rnld".

JIIIll> 15th, 11137.

27)

The state department's announcement said the entire sum will be held on deposit in the treasury "pu r suant to the authority of applicable Federal and Philippine statutes." It added that "tl'easuI'Y officials are now ('ngaged in perfecting t.he necessary formal details rpquire(\ to effect t he tl'3nsfel' :l.Od deposit which is anticipated to be completed in the next few weeks," Dean Conrado Benitez, lIlember of the Filipino committee of experts, said that Quezon's plan of buying up landed estates is a continuation of the policy of William Howard Taft when he was governor general. Benitez explained that the attraction of landowners to the Islands will not be affected by the plan, Benitez said the President's plan "applies almost entirely to religious ol'del's of friars who have held enormous estates, sometimes whole municipalities, in the Philippines since the revolution against Spain." He said Taft in 1903 began a IlOiicy of buying these lands and making it possible for farm tenants to own them but that the policy was discontinued and "ever since then there has been a lot of dissatis. faction." Earlier, President. Quezon released a statement saying lie would send a message to the Philippine Assembly J'ecommending the disposition of the $50,000,000 refunds as follows: 1. A undetermined appropriation for the purchase of large landed estates, to be subdivided for resale to tenants, These subdivided parcels will not exceed 250 acres, 2. Establishment of credit for tenants to enab1.~ them to buy working animals, agricultural imple. ments and other things for the development of the land, 3, Building roads in l\Iindanno and such other undeveloped islands in the Philippines, 4. Construction of schools, particularly rural institutions as well as vocational and educational bl·anches, 5. Establishment of government institutions for the insane, the indigent, the aged, children and other individuals requiring the attention of the state. 6. The balance to be used in the re,tdjust m<:nt of Philippine economy as recommended by the joint committee of Filipino.Ame l'ican experts. President Quezon estimated the first five pro· jects would cost around $20,000,000, leaving the balnnce for economic projects,

THE COMMERCIAL & INDUSTRlAL MANUAL

276

Filipino members of the joint committee were guests of honol' last night at a. dinner given by the American members of the group. All were dis: appointed at the belated alTivai of President Quezon who wa s delayed en route from New York. On' June 2'ith, the St'lle Department announced it would transfer the $50,000,000 in coconut oil excise tax collections to the Philippines account in

the U. S. tl'casuQ'. The action wns expected to make the fund

available for use by the Commonwealth government soon. SOLONS CABlm;T l\1F.~IBBns TAKE STEPS To CARny OUT QUEZON'S WISHES '"

L eading members of the National Assembly and the cabinet took de\!,nite steps to help carr~t out the pians of Presidl!n t Qut:zon l'elativ~ to the expenditure of the P100,000,000 oil excise tax refund. First among those to a~llounce their full approval of President Quezon's ideas as to the expenditure of the fund were Assembll'lllen Guillermo Z. Villanueva, chairman of the com'Vittee on public instr~~ tion; Cecilio N. Maneja, member; Tomas L. Cablh, of Lanao; Apolonio G. Curato, of Cotabato; Antonio Villarama, of Bulacan; Arsenio Bonifacio, of Laguna; and three ranking members of the committee on agriculture-Dominador Tan, of Leyte; Justino Nuyda of Albay; and Justiniano Montano, of Cavite. Both Assemblymen Villanueva and Maneja, in representation of their committee, declared that they will draft bills to appropriate a portion of the oil excise tax refund for the construction of additional school houses throughout the Islands. However, they declared that preference would be given to agriculturnl and vocational schools. They will recommend that these be constructed in suitable sections or Luzon and the Visayan fslands. The public works bills will be sponsored by Assemblymen Cabili and Curato, who aim to have such improvements constructed extensively throughout Mindanao, financed with money from the oil reimbursement. Roads and bridges, har'bor, river and port works, sewel'age and water systems for the impl'ovement of sanitary conditions are COIltemplated, The purchase of big estates will be provided for in bills which will he suhmitted by Assemblymen Villa"ama and Bonifncio. They will recommend • "lIcf"ld". June 25, 1(137,

purchase of haciendas in Bulacan, Laguna, Cavitt!, Bataan and other provinces where extensive land holdings exist and where agrarian 01' tenancy prob~ lems are present, The committee on agriculture, Assemblyman Tan explained this morning, will sponsor bills designed to appropriate a substantial part of the refund for agricultural development. Eulogio Rodl'iguez, Secretary of Agriculture and' Commerce, who has just returned from the southern islands, told the press: "I see in President Quezon's proposal a permanent solution of the agrarian conflicts in central Luzon and other parts of the Philippines. I believe that the National Assembly will approve the scheme." Mariano Jesus Cuenco, secretary of publie works and eommunications, sa id that his department has already submitted a road-building program for Mindanao to be financed from the coconut oil tax fund. "In the department's annual report for 1936. UndElr~Se<:retary Vicente de la Cruz, who was then running the office, requested a pOI'tion of that money for the construction of roads not only in Mindanao but also in other parts of the country," Secretary Cuenco declared. The secr etary said that there is no question that the opening of highways in Mindanao wil! hasten the economic development of that island. " President Quezon has certainly a high vision, a nd his plan for road·construction should be carried out," he continued, Antonio de la s Alas, secretary of finance, who was one time secretary of public works and communications, recalled that as head of the department he had occasion to recommend formally to President Quezon that a part of that big sum be set aside for road-construction. He said that he had prepared a prognl.m of a network of roads for Mindanao. Members of the National Assembly, particularly Assemblvman Antonio ViJlarama, even before theannounc~ment of the Quezon plan, had announc(>c!: their intention of filing bills appropriating PIO,OOO,000 for the purchase of the landed estates, Assemblyman Villarama, who has been looking into the agrarian h'oubles in Bulacan', told The· Hemld sometime ago that he planned to present a bill buying the Buenavista estate in San Rafael andJ San IJdefonso for some P3,000,000.

PHILIPPINES SccI'clary Rodrigucz disclosed to the press that he had rcccived petitions from interested parties for the pUt'chase of landed estates, The latcst petition came I)'om Romblon whcre two large haciendas owned by Spanish corporations are located, PROGItM.1 FOR SPENDING OF SUM

Secretary of Finance Antonio de las Alas, explained that there will be no need of nctual transfer of cash from the United States to the Philippines, saying it will be sufficient for the amount 01' amounts being transferred to be crcdited to the account of the insular treasurer in the federal treasury, There now are the Philippine treasury certificate fund and the Commonweulth general fund in addition to the special funds such as that of the gold exchange, Secretary Alas .!<aid that it is possible that a new fund or the Philippines may be created in the federal treasury when the excise tax money is tumed ovel' to the Commonwealth government, "If we want the money li:~pt fOl; us for short time demands in which case th money will receive a lowel' rate of interest, something like two pel' centum, we may so indicate," Mr, Alas said,

Both Secretary Alas and lbsulal' Treasurer Antonio Rnmos declared that provided the. NO,OOO,000 installment from the P100,000,000 excise tax fund is transferred to the credit of the Philippine government, the national assembly can proceed to spend it as it deems proper, The Philippine trea. sury has sufficient funds in its vaults to meet expenses which might be so incuI'red, they said, l\'Ir, Ramos said he has not been notified of uny transfer so fal' of excise tax money to the cl'cdit of the insulal' govel'nment, He believes it likely that the transfel' will be made first to the credit of the Commonwealth general fund, To avoid cash transfers, the federal treasury will bc asked to again transfer the money to the eredit of the treasury certificate fund so that the Philippinc treasury can proceed to draw against that fund, REFUND OF OIL SUM ARRANGE!) Accordingly, payment of the ]1100,000,000 due to the Philippine government from the coconut oil excise tn1t hilS been arranged through the setting up of a special fund in the federal treasury crediting the Islands with the amount, and a repOl't was made to the cabinet by Jose Yulo, Secretary of

277

Justice, Secrctary Yulo was understood to have advised the cabinet that President Quezon had already signed the warl'ant or vouchel' form which acknowledged transfer of the funds to the cl'edit of t!le Philippine government, Recently Philippine officials filled out forms forwal'd ed by the United States treasury to Manila relative to the payment of the PIOO,OOO,OOO, Contranl to pl'evious indications, the accumulated coconut excise tax refund due to the insular government wilt be paid in full and not by installments, it was stated, The amount will not be made available for a]>propl'iation by the national assembly, however, More than halI of it, 01' something like 1'60,000,000, will be kept in l'eserve for futu)'e u sc, Plans of Commonwealth government officials indicate the setting aside of HO much of the oil tax money to replenish Philippine surplus reserves, This move is viewed by Philippine officials as wise since it would considerably strengthen the financial position of the insula)' government, which has been somewhat>: weakened by the tremendous apPl'opriations m a~e for this year by the national assembly, Outlays authorized for this year amounted to abou ~ r83,000,000, one of the largest ever made by the insular legislature for any year, Secretary of Finance Antonio de las Alas and Budget Commissioner Serafin Marabut have on various occasions made hints of the importance of replenishing the government reserves, The 1>39,000,000 surplus reserves of the national government in '1935 have been gl'adually depleted to from 1~7 ,000,000 to P29,000,OOO because of heavy appl'opriati'lIlS during the succeeding two years,

It was understood CommOllwealth officials planned to ask PI'esident Quezon to set aside some P20,000,OOO of the excise tax refund to replenish the govel'nment l'eserves, '''hile the government's present financial position is declared to be strong and sound, financial officials desire to make more robust and unshakable, that position by the addition of further monetal'Y cushion to ward off the effect of any financial or economic shock. P)'csident Quezon had previously pointed out his purpose of spending the excise tax money for the purchase of frial' lands and to accomplish plans of adjusting the nationul economy, Part of it, he said, would bE' used fOl' Cinam-ing his socill l improvemE'nt program,

278

T HE COMMERCIAL & IN D USTRIAL MANUAL

BRAZILIAN BABASSU N UT SUCCESSFULLY INVADES U S. VEGETABLE-OIL MARKETS RAZ ILIAN BABASSU nut continues its successful invasion of the vegetable-oils mar kets des_ pite the extreme displeasul'e of Philippine coconut oil producers and American dairy mel], Imports of this nut were unknown in 1934, amounted to about 15,000,000 pounds in 1935, and in the first seven months of 1936 reached 43,865,000 pounds, The competitive effects of this large importation are suggested by the fact that its physical characteristics a rc very similar to coconut oil. according to a bulletin of the National Dairy Union, Its three chief ,lses are identical with coconut oil-namely, fol' ole::)JTI:'Il'garine, hud compound and soap,

"It solidifies at almost the same teml)erature as coconut oil. This and other charactcl'istics make it a substitute for lard, tallo\\', cotton-seed oil, soybean oil and corn oil, the most important oleagenous jlroducts of United agriculture," the bulletin said, "THE POTE~TIAL WORLI' sllppl~' of babassu oil is 'palm oil: The Q:abassu palm tree, native of Bra_ :.:il, grows in great p1-ofu"ion in the tropical sections of lhat gt'eal country, A recent report by the United States delJartment of commerce places the number of bahassu trees in one .sing'h' province of Brazil ;It 800 million, the trees 'capable of producing 19 pounds of oil (average) pe~tree, It floul'ishes in other provinces, pl'obabl~' 4 U,OOO,OOO in anothel', and greater numbers in still rhel' sections," Protests from the National Dairy Union, the ~ational Cooperati\'e Nut Producers Federation and othel' dairymen's groups have 1'1Icged that the brg~ imports of babassu oil are due to "an errol' if! judgment" on the part of Secretary of State Cordell Hull in agreeing with Brazil in the l'cciproc:al hade agreement negotiated last year that no tariff or internal tax should be placed on babas~u nuts or babassu oil. Assistant Secretary of State Francis B, Sayre, in reply to these protests, A':,\ve no indication that the agreement would be modified, He held that the trade agreement provision fol' continuance of existing excise treatment of babassu nuts and bab:lS3U oil is authorized by and in accordance with the trade agn:ement act, The success of the reciprocal trade agreement, he said, is of vital interest to the American dairy farme r s as to all other Amel'ican agricultural and industrial producers, who have more to gain from the reestablishment of prosperous domestic markeb for their products through the restoration of abundant foreign tJ'ade, than by a policy of excluding even the most remotely competitive products, • HII 11,)<",' \\', F""",'rl, U"il<d Pre • •

\\'.,,1';"'1/"'"

Co'r.. pond~nl,

Since that reply the National Dairy Association probably greater than that of eithel' coconut oil or r equested aSSUl'ance that when the Brazilian agreement is extended it should omit any commitment with respcct to babassu oil. The association also asked that notice be given to the Pan-Americnn conference in Buenos Aires next December "that no concJssions amounting to special privilege in the American market should be given any commodity which interferes with domestic agricultUral production," The United States bUI'cau of internal revenue reported in the usc of babassu oil in oleomarganne manufacture as follows: 1935-1,838,000 pounds; 1936-Jallual'y, 656,455 pounds; February, 995,889 pounds; March , 2,856,289 pounds; April 2,864,050 pounds; May 1, 1,035,283 pounds; June, 1,181,f)8:! pounds; July, 1,288,920 pounds,

coco P LANT ERS UNION FORMED A cooper:ltive assocIation of coconut planters was organized recently in Samar following a tneeting called by Illunicipal officials of Guiuan whn were alarmed at the sudden decline in the price of copra from 1 ~,17 to 1' ,07 a kilo, The meeting, was presided nnd addressed by Municipal President Alejo Guimbaolibot, one of the largest coconut plantation owners in the province, discussf'd ways and mean~ of improving market facilities, Following the meeting, the farmers and planters orga nized a coopel'ative association to deal in buying and selling of copra, 'Phe association, it was lear ned, will be capitalized at 1'10,000, During the meeting, the municipal president called the attention of the audience to the fact that t he co ntrol of trade by the Chines!! in Samlll'

PH ILIPPINES accounts for injurious effects on the economic condition of the local coconut planters. He said that the decline in the prices of staple crops including

279

copra and abaca, is not the result of economic conference at Washington, but a r esult of the manipu\a. toin of the local market by Chinese merchants.

RI CE AN D C OR N Bureau of Commerce Reh abilirarcs Fund Old Loans R enovated; Coop erative Mar ketin g und Credits Association s Revitalhed EHABILITATlON OF THE RICE AND CORN FUND is going on surely though quietly through the efforts of the Dureau of Commerce. 'fhiii fund consists of Pl,OOO,OOO originally appropriated by the Government for the purpose of lending to farmers to encourage and stimulate the production of better yield and more quantities of rice and corn, which are the staple crops of the P hilippines. When first urproprialed in 1919, the fund was entrusted with the Department of Ag:iculture and Commerce (formerly Departmcnt of Agriculture and Natural Resources) and then to old Bureau of Agriculture for administration. In April, 1933, however, the collection ~nd administration of the Fund passed to t:1C BU!'ea:l of Commerce. At that time. there were P40,OOC cash in hand deposited in the InSl!lar Tre~sury. There were then 193 associations indebted to the Fund. The total loan amounted to 1'92'1,358.29.

TODA Y THE F'UND has cash in hand P170,000, out of which 1'34,000 is appro riated .yearly to pay

off the salades of personnel and the expenses of operations incident to the adminishation of the Fund.

MAlZJI. DJl.MO~'TTRATION PLAT 5-LASQTAO, CBBU

â&#x20AC;˘ Ilv

I\~A8TAC10

C~;'I. Ctrf>ptral;r~ Co",,,, ..c~.

IÂť: CAdTIIO.

CTt,W. DiriJ't>n. 8urwu 01

Mark<l,"p and

THE COMMERCIAL & INDUSTRIAL MANUA L

280

Besides this amount, 11100,000 ha s been paid back the Rice and COI'Il Fund might not collect much to the Government up to June 30, 1935, from loans long since collednblc. But the Bureau of Commerce has been able to rehabilitate this Fund as may be gleaned from its activities. I t may be said that with respect to this line of work, the Bureau's activities arc twofold: missionary and rehabilitation of the associations themselves who al'e indebted to the Fund. Offi cials of the Bureau of Commerce believe that by rehabilitating t he agl'icu!turnl credit associations which are indebted to the Rice and Corn Fund . the ]:;I. tter itself would also be rehabilitated. Acconli ngly, they encourage these associat;ons to Imlin tni n the stability of their finances. They also believe th;\t by taking personally to individual debtors the offi cials could point out to the farmerdebto!"!; the advantages of maintaining the Rice and Corn Fund. They could educate the farmers as to the necessity of cbepcrntive e fforts to bring about production and marketing. Then they could also per suade them to pdy thei r debts which are their moral obligations. In brief the Bureau of Commerce has deali ng with the debtors in a diplo-

.... s of July l 8t. l!l3G.

matic way instead of resorting to all kinds of pressures 01" taking their cases to cou:路ts of justice. As is known the work a ssig ned to the Bureau of Commerce, with respect to the Rice and Corn Fund, is si mply the collection of the loans due from the agricultural credit cooperative a ssociations . which now amount to P747,900.86 ti for principal and P80,160. 16" fOI' accrued interests, which make a total of 1'828,061.12.\). This amount is distributed in loans among 180 associations in 32 provinces. The Bmeau uctually is performing not only collection work but also rehabilitation of the asso路 ciations so a s to make the collection easy and without obstacle. To do this due Bureau 1s concern is to help the a ssociations collect the loans due f rom the individual members . A house to house CUlllpaign has to be resorted to in many instances. The Bureau of Commerce agents are l'enovating old loans so as to pluce both the associations and the Government on a safe side. Old documents have to be scrutinized, renewed, and reinforced with good securities, so that if Court collections should become necessa ry there would be

PHILlPPiNES it':;s probability of losing a casco Court actions at this time are not advisable because the majority, if not all, of the individual lonn documents arc not well secured. This is the main reason why the collectors have been hesitant about drastically dealing with the individual debtors in the collection of their debts. They preferred to use tact and diplomacy in order to collect what they could rather than wait for a long ordeal or COU1'l procedures without being sure of winning every case. The collection of the loans due the Hice and Corn F und is done by Bureau of Commerce agents in the fie ld. The office work consists me:'cly in keeping the accounts, r eceiving the collect ion sent from the fi eld, and consta ntly sending letters and answering inquiries. I n t his work f OUl' men are nctually engaged, one of them, who is the eo:Jecting officer that also keeps the subsidial'y ledger, is pa id f rom the general appropriation of the Bureau of Commerce. The Jield work is most exacting because it needs constnnt supervision over the 180 agricultural credit c'ltopel'Dtive associations actually indebted to the f u nd and over the Bureau of Commerce field personnel "ho are assigned to this partkular activity.

281

Be it sa id that COllection of the Rice and Cor n Fund is not t he only work attended to bv Bureau of Commerce age nts, because, lor a better 'coordination of work, they are also given th~ task of supervising the operation of agric:.:iturai cl'cclit cooper ative associations ar.d they act in that capacity as duly authorized repn~sentatives of the Director of Commerce, aside from attending to diverse 1":ctivities of the Bureau, such as the organization, promotion, and su pervision of cooperative mal"lreting associations, In this way thc~' are in a position to eX': !n more influence over the managing bodies of sucn associations than if thcy :\I'e to do nothing but mere collecting. T he organization of cooperative marketing associations among the members of rural credit associations is another phase of our project to insure the collection of the Rice and Corn Fund. Bureau of Commerce agents have explicit instructions to organize, promote, and supervise cooperative marketing associations, and whenever possible, induce the members of cooperative rUl'ai credit associat ions t.o I become. a~ so members of the cooperative marketmg assoclDtlons. The PUl'Ilose is to enable

NATI\'II FIBl..m RESPOND TO SCIBl<TIFIC CUI..TI""TlON

282

THE COMl\>lERCIAL & INDUSTRIAL MANUAL

every fal'mer, especially those who secured loans from the Rice and Corn Fund, to pay their debts out of the proceeds of their crops, when the rnal'keting of which is made thl'ough the cooperative ma r keting associations. If a farmer is a member of both a well managed rura l credit association and an equally well administered COO I)CrativC! marketing assoeiation, he will have less difficulty in solving his financial problems. The ruml credit association cun g l'a nt him the Joan he needs during the planting season, and as soon as he. sells his crop, through t he coop,cl'utive marketing associations, he can pay his debt easily and without fUl"路 ther delay. In t his way, the collection of the Rice and COl'll Fllnd becomes more expedi\:lnt. The campaign, therefore, is not confined to collecting alone. Proper attention to the educational feature of bhe work is also given so as to elevate the standarii,. of living of the s mall and average f:n mers by i~ulcating in their minds the spirit of coopcration and by making them realize the importance of punctuality, and for this work, the agents in the field are required to follow a definite educational progra'\n by cooperating with t he Bureau of Education in the organization of banio and community meeti gs. Provincial fede-

rations of agricultural credit cooperative associa_ tIOns are also or ganized so that the collection of overdue loans may be constantly attended to, and the lack of propel' su pervision due to the shortage of personnel may be supplied by such federations. This al so one of the rea sons why the collection work is being done in conjunction with other activities. While all the agents paid from the Rice and Corn Fund are pel'iol'ming the varied activities of the Bureau in the field, the agents of the Bureau lhat are paid from the general fund and tobacco inspection fund are also devoting part of their time to the collection of loans due the Rice and Corn Fund. Aside from this the directing forces that al'e primul'ily in charge of the Rice and Corn Fund collection, such as the office of the Director and the Division of Cooperative Marketing and Credits are paid from the gener al fund, and still, are devoting part of their time to the collection of the Rice and Corn Fund. In this way the servi('es rendered by the personnel paid from the Rice and Corn Fund to the general activities of the Bureau, both in the Office as in the field, are overcompensated in a way by the services rendered to the Rice and Corn Fund by the personnel that are paid f r om the general fund.

VILLAGBR$ AT WORK F OLLOW ING INSTR,UCTION IN MOOIIR,N SCIIINT!FIC CULTIVATION MllTllODS

PHILlPPINES

283

PHILIPPINE MONOPOLY OF ABACA IS MORE APPARENT THAN REA.L N T HE PH ILIPPI N E S, the name "abaca" applies to both the plant and its fiber. Allhough ill many

foreign s tat istical publications, the usage of the name is being (ldopted, the plant and its fibe\' arc both still universally h.-nown us "Manila hemp" or simply "1\lal1ihl", The use of the wOl'k ';hemp"

is of course enoneous, because it refers to t he rcal hemp plant ~' ields a soft fiber while the abaca f iber is hard. As attested by the natural mnllopo]y of abaca the Ph ilippines enjoys to date, it is obvious that the plant is indIgenous in the Islands. While the first mention of the use of abaca cordage was made in 1686 by an Englishman, it should be obvious that its u se not only as cOl'dnge but as texti le for clothing, etc. must have long before been ill vogue in the I slands. T HE PHILI P P INE N ATURAL MONOPOLY leadi ng C\lstomer~ in the order of their impOl'tunce of abaca, u nl ike a re;,l monopoly , does not involve arc t he United States, Japan and Gl'cat Britain. control of prices. Ou the contrary, even now, some It is o\llmJll;erl only by tobacco products amo ng planters do not mak::"\ a ny profit at all. Not only Philippine export;; in numbel' of foreign customers . does abacn meet com petition in metal cordage but also in various veg.:lt'lble fibers. And latest fi ndI . -C ULTURE ings by the Bu reau of Jant Industry and the The Philip»!ne still enjoys a vinual nalural College of Agriculture point to two dangel'ous factmono poly in abaca production in the wo r ld. The ors affecting not onl y the yi~d but the quality of plant had been introduced into many tropical coun P hilippine abaca f iber. T hese are: (1) plant dis- tries a s nlready men tioned, but no fiber IlI'oduced eases, notably the bunchy-top a n,d (2) the fact t hat has as yet equalled the best P hilippi ne grades. Of 28-yea r-old pl::m tations yield so low as to render t he couJl~ries that Jlroduce abacn, 8umatl'a will most fu rthe r ma intenance u nprofitablel Lastly, the pos- likel~' offer keell competition to the P hilippines, sibility of successful prod uction eventually of abaca because it possesses n climate sim ila r to thnt. pr ein any of the various t r opical countries, especially vailing in Philippine abaca region!l, thnt is, a cli in countries of the D utch East Indies, into which mate similar without dry season . the plant had been introduced, should not be overAs a lready pointed out that unl ess Philippine looked as a real threat to the P hilippines a bacn in- planter s are decided to let their present plantations dustry. to lie fallow and open virgin lands f or new plnntaThis industry gives to the Common wealth gov- tions every 28 yenr s at least, the reputation of Philernment a n incom(' of a bout P2,OOO,OOO annua lly or ippine a baca m ight not only be destroyed but the about 4 pel' cent um of the total Insular Governmen t production wo uld certainly be greatly r educed. revenues. I n 1935 the Philippines had a lotal ave1'nge of About 2,600,000 people are di r ectly 01' indirectly 488,120 hect..'H'es planted to abaca. the total prodepe ndent upon the industry, and the capital induction in same year, being 3,171,170 piculs. The vested in it nmounts to over 1'95,000,000. leading abaca-producing provinces in the order of Onl),' around 15 per cen tum of the countr y's their importance as bnsed upon averagc nrc: Davao, total cultivated area is plnnted to abnca but it Albay, 8orsogon, Leyte, Camarilles 8u1'. 8nmnr and ranks t hird among P h ilippine ~ports, bein g out- 8urigao. ranked only by sugar nnd coconut products. In The total average planted to abacll of the prov1936, the vnl ue of e...'i:ports of abaca products was inces of Davao, Alba~' and 801'sogon is 259,690 hecequivnlent to nbou t 12 pel' cent um of t he count r y's ta r es, and nlthou gh t his is equivalent to ovel' 53 total. per centum of t he country's total, in value, t he proAhaca is exp orted to 30 countries, but th e three duction of these th r ee pr ovinee!; in ]935 was equi valent to over 67 per centum of the countl'Y's total • Rdi/etl by DO)ll SGO B. P .\OUlf11 0-'S t>11~r Bw."", 01 I'la .. 1 value of almost P13,000 ,OOO. 1",h•• 1rv a"" ,\ '"Iio .. al I/nco,~~ Cou",iI of/h. Philil'l'i"~ hl"nrl~.

THE COMMERCIAL

284

V(trielies 1'aised.-There are morc than 57 known varieties of abaca but only eight al'e important at present. These eight vul'ieties arc presented in the following key so that they can be better identified: KEY FOR THE EDENTIFICATlO-': OF STANDARD AEIACA VARIETIES

Stalh m_O, 1.... ylinJ"~,1.8r<cn"·i<h purple p,,,.h ... ,i.ld low. ... . •. ", •.. ,Sin.b, AI Sulb more 0, b. u S.. lh .. 1I .n~ bi,. ,iolJ hr,h. III S,.lh ",odium" A

"re,in,.

I"""

"f'C""'

n.,

Sulk, veer D D Sulk. ,«<nub whue. "ooho, !food lJ,y.boo 01 Sulk, bl.ck wj.h pmk(.h ",.. kIn,. "ooho, law, ~b.:r

dull ",hu,., (I S.. Jb .Ii.orbd ...

...... , . . .5'0'111000

"",in,

E S.. lh d>rk purple 0, rod .. F S';lI~~~r~: !:;rJ<'~":,~$~~P"Ch~'~

FI Sulk.

~"k

",on,.

f'~:l'JUrh".n

il,.

flom

fed .110 ... ' block. fiber

""",,10 pink"b ..

, .... , .... 1"'."

whu,. yld~ ~. (,n, .d c~«Ucn •• oolonl .............. :. ·l>!'luind.n.o Gl S.. I cl",p 1'«0 .~d Browo. f,dJ 10 "0010"1100.1.· .. · l,bu.on G

Sulkll~'n"h

:& ~b<r

V<')"

Cost of 111·o!lllctioll..-As a general rule the methods employed in til, production of abaca all O\'er the country are morl\ 01' less the same, hence the cost of pI'oduction doe\ not vary sign ificantly. In Southem Mindanao, ho vever, particularly in Dnvao, ihe methods of pl'oductton' are more advanced. Moderll s trippers with a capac\ty of 8 piculs an hour p'Jr machine, have been inst..1.l1fd very recently in 2 big ahll('a plantations. And t~e innovation had not only decreased the cost of production pel' bale. but also l'educ ~d the number of grades produced. A major portion of abaca producers still use the "Hagutan", a semi-automatic stl'i pping m~chine. The following is a summary of the economics of production per hectare, b:lsed en the In'oduction of the seven leading nbaca-pl'oducing' provinces:

\~~~'~~nf;:~!lpf!":~', ~ I'!I .OO ""rp'''&

Co., of huv<";nl >oJ To •• ) CO" of

proJ"""""

I' \J6.loO I' lO.OO 5400

I' B4.00 I' $2loO

The Philip!)ines I)roduces not le<:s than 35 grades, the highel' ones being costlier to produce. Further, these ~I'ades fall under two majol' sta nda r ds Imown as the U. S. (United Statcs) and U. K. United Kingdom) /!,rades and the t'cst are cJa!'sified as Damaged, tow, and strin~s. it is cO!itlier to produce the U. S. gm(\es but this is compensated by t he better prices paid fot· them. Within this group, the price per pieul t'an~es from 1'14.00 to P~2.00 as per present (Illotations while in Lhe second ATOUlHI, that is. the t 1• K., the pt'ice ranges ft'om 1'f).75 to PI3.00.

INDUSTRIAL MANUAL I I.-

MANUFACTURE

The principal products manufactured from abaca are: cordage, !motted abaca, and thread and twi ne. CQl'fia[Je manufactur...- There al'e tit present 5 corclage factories in the Islands with a totaJ investment of around 1'4,900,000 more than 50 pel' centum of which is Amel'ican. The total spindle capacitv of the five factories is cquivalent to 125,450,000 ki_ los with an annual commmption of abaca fiber equivalent to 38,247,000 kilos or a little over 600.000 piculs. It cost from 1'92 to 108 to manufacture one short ton of abaea cordage on the basis of low price;;; which prevailed from 1931 to 1935. I<1!Otted abcrca.-This product constitutes one important item in the country's CXpOi'ts of abaca products. It is, however, mostly exported to Europe, especially to Gel'many and France. During the last 10-year (1927-1936) period, the United States got only about 4 per centum of thc average total value of exp0l'ts, Abaca tltrC(Ul a1lft t1Ui)!e.-The manufacture of these products is still in its infancy and tends to remain stationary. While in 1930, the value of the exports of these products amounted to over PI5,000. in 1936, it amounted to only a little over PIO,OOO. The United States gets most of thc countl·y's export, Laking about 77 per centum of the avera/!,e total value. Ab(lCl~ sflck manllfact!tn::.-Because of abulIdallce of poor grade abaca now being produced locully and, the realization that the country is importing around PI ,500,000 worth of bagging materials ~'eady, the Bureau of Plant Indus t.I'Y st~l:ted to make investigations in 1931 regarding- the utllizRtion of the grade in the manufacture of sacks. An~ while the locally-made sacks so fa\' cannot be substItuted for th; i~lPorted jute bag due to the difference in texture, at least the forme)' is su itabl~ ~or copra, rice and other coarse and dry. com.mo~ltles. And although local sOlcl, manufacture IS stIll ill the household scale it is hell)ing to reduce unell1plo~' Illcnt especially in the Bicol region s. Miscella11l!Oll8 abaca 7IIamtfaclul'lul l,rodllcts.The mOllIufacture of abaca textiles :lfl a bns;ic ma.terial in the making of various common articles hke 11l0~ qllito nets, Sillflmay cloth, etc., has long he~n II widespread household industry in the Philipplllcs. li is only I'ecentl~'. however, that 11 compan)' wa!;

PHILIPPINES

_ _ _ _ 28 5

form ed in Mani la which engages exclusively in the

the 11Cl'Centage corresponding to the United States

mamlfucture of many articles on a commCl'cird scafe. These al,tic!es include uppers fo r slippcrs, shoes, zapatillas, cu shions, doilies, vanity cases, men's and women's helts, pUI'ses, billfolds, cigarette cases, tics and hats. The same factory also manufactures rugs, dool'mnts and foot.pads (mops).

are shown in the following table:

The Bureau of P lant Indu stry recently demonstrated nlso the possibility of manufacturing a sort of linen cloth out of abaca which is suitable for men's suiting. II I.-LoCAL CONSUMPTION

Abnca is exported mostly as a I'nW product. The locnl cOl'dagc factories utilize about 8,690 5hol,t tons annually of fiber for the manu facture of cordage but only aroun 30 pel' centUln of the total factory outfmt of cordage is consumed locally, 01' about. 2,600 short tons in terms of fiber. The 10year 11927-1!l::l61 average pl' duction of the country is more tha n I S3,700 short to1,ls and deducting the local consum ption s till gives tne Islands a balance of about 175,000 short tons fo r xport. Unless th e manufacture of knotted abaca, ~hread, twine, textiles, and especially sacks, progresses significantly, the local consumption of abaca fibcr would remain morc 01' less stalionary. It is quite discouraging, how!!ver, to note that since 1£131 UI) to the present, the cOlllltt y's exportation of knotted abaca has cont inually declined. The chances to increase the local consumption of abaca fiber by increasing the ou tput of the cordag-c facto ries arc vcry sl im, becuuse of the pl'ovi"io n C'mbodied in the U. S. Cordage Act limit.ing' lhe country's exportation to 6,000,000 pounds only. On top of this is the provision of the T ydin~:; McDuffie Law, which limits P hilippine shipments to th!! United States of duty-free cOI'duge to 3.000,000 pounds only. But for the Cordage Act, the lower quota should have been in force since the inllugumt.ion of the Commonwealth. I V.-TRADE

Plti/i1Jpilie exports of (I/Jac(t aml malllt/act ul'cS (I1/(/l'C/IIIcd /Jl'odllcls.-The uverage value of yearly exp01·tnt.ion of abaca and its manufactured p r oducts during the last 10-year period , (1927-1936), with

It. is obvious that with the exception of knotted abaca which constitutes only about 4 pel' centum of the country's total value of abaca exports, Philippine abaca 1)J'oducts arc considerably dependent upon the American market, especial!y as regal'ds cordage. Duri ng t he Jast 10-yeul' period, out of a yearly total value of 1'36,000,000 of Philippine exports of aba ca products, over Pl:!,OOO,OOO 01' about 37 pel' centum corresponded to America's share. With the int1'oriuction of the most modcrn stripping machines, which turn out mostly high quality fibel', t.he Philippines will be in a better position to sup ply more of the hifh grades demanded by the American market. ThT leading customers of abaca fiber are Japan, Great Britain and the United Stutes; of cordage, the United States (gets about 40 ]leI' centum) and Siam, P eru, Dutch East Indies, Ha waii and Hongkong; of knotted abaca, Germany, France, Netherlands and Ita!~'; and of abaca thread and t.wine, besides the United St~'\tes, t he Japanese Empire, China, British East Indies and Hongkong. Philippine intpo)·ts 0/

fi/Je)·.~ aJld tlteh' de)'illat-

ives (tntl )'elated pJ·oducts.-The average value of yearly importation of these products during the last lO-yeal' l)eriod , 1927-1936, wi th the percentages corl'esponding to the United States arc shown in the followi ng table: Ph iiipl)illC 11ll7}0)'ls of Fibel's. Theil- Del'ivati lles (Uul Related Pl'oducts

To~.~.!",

Sb'K of u. S. 1-;;"c.,="C,:-"C~::";c,"::""C"C,

-----1------11<""",. ,.

1I""h.... F,b("

M '~.II."..,".

S,ll (N "",,l .nd .... 'ifi<;.I)..

~i:~':'.~:;dc~~I;;·(W;;~i6)::.:'

lHl.ll2

~.H(\.9U ~.loCI$.~19 )7.!,o.~18

1.on :i}O

1'51,0«6.9\12

1 ·1~ .I64.9J2

With the exception of misccllaneous fibel's, the United States sUIJplies mostly the countl'Y's imlJOl'tation of brooms and brushes, silk and cotton g~ods.

THE COMMERCIAL

286

INDUSTRIAL MANUAL

per centum in the tenth year. The payments of and wi l'cs and cables. Brooms nnd brushes come these duties will be as follows: most.ly frolll the United States, Japall, Germany, and Chinu j miscellaneous fibers from the British UNITED STATES DUTIES East. Indies, United Slates, Belg ium, Germany, and ,'u, of Com<Danw •• ltb Pc< Too % on p" Pound p" K,\o Japan; silk goods f.'om the United States, Japan, \Valid 1\.,. U. S. un" t.n, ..o, China, Great Britain, and Fnl.nce; cotton and its manufactures which constitute over 78 pCI' cen tum ~ "b. 'ro" 1.32 1)20 of the countl';"'~ total value of imports, from the 0' 1760 lUI) U nited States, Jupan, Great Britain, China and 'ro UOO T ~«.>i",·· ' .0 "0 H on gkong; and wi1'cs und cables from the United States, .Tapan, Germany. Belg-i u m, Great Bl'it:lin and If lhe tenth yCIII' of t he Commonwealth and the Czechoslovakia. full duty of 2 cents Gold per pound or 1'88.00 pel' Japan in spite of its n'earness to the Islands ton of cordage is imposed, it will be impossible for and its cheaper cotton goods, is bei ng' h eld in check Phil ippine cordage manufacturers to market their in competing with Amcl'icnn goods because of tariff p roducts even as far a s the Pacific Coast on the banicJ's and a Gentl cmCr!'s Agreempnt between the basis of t he lowest possible price which is only United States "n4, .Japan. This agreement limits 1'1 60 pe l' ton (3/4 inch and up in diameter). The shiPlllents fron' Ja l)an to the Phili ppi nes to 45,450,- cost of manufacture is about 1'100 per ton and the 000 square meters, in~~udillg carryovers. etc., yea1'ly . pr esent freight rates per ton of cordage are the following: V.-REA'. U. S.- P. I. 'I' RAPE BALANCF. 1' 10.00 By referring to the tables presented in this P"i'" 41 .Xl article on Phili ppine exports of abaca and manuIt is clear that the total delivered cost per ton factures and related Jlroduct~ and Philippine impor ts of fibers and their der ivatives and r elated products, of cordage to the Pacific Coast only, equivalent to it will be noted thab the Unit~d States has a favorP235130 would result in a loss to the manufacturer able trade balance of over Pll ,OOO,OOO annually in equivalent to over 1'75 aside from the payment of the pure exch'mge of products. Considering, how- a local sales tax of 11,6 pel' centum of cordage exever, the other important factors, affecting the trade ported. Of course the finest grades selling at P300 between the United States and the Philippines, this per ton might survive bu t their production is very balance would almost double itself. These important limited. f actor s al'e as follows: Effect of the Cordage Act.-This act which was

, "

,," ,," ,""

''''"

( I)

Th,~<~n:~i::~.n1.r:::.'. on~;~~<:h:~"~i~~h~~~~!~ ~f~~':~,:ti~~.~~:n~i~

(otd.S' (.«o,i. . . Ion, ;. Am";,,. (1) Th. (,oiSh! ch"S" on .b.e~ .od

.nolo,ou. prod", ,, .~r.<d ,0 .nd (.am

~~I'~'"~f':b~~:':h;~~~n~n,~ ~~.'~'n::~~ ~~:~~;IO!~ !9,. .~~.'p~~~~~:

(l) Th. p«m,um p,;d on .b .... h,p""." .0 dl< On;«d S..,". if .h. in,u".", ,,«. h.ndl.J by Am." ... Compani.., a<ued a,"« '100 in 19}6 .Ion •.

"oukllu..,

.h.m

1'5).-

Efferl of the :1'lcDuffie-Tydilz{18 £ ftw.-The McDuffie-T yding!; Law affects Philippine cordage. twine, cord, r ope, cable, tarred or untarred, only. The law provides that 3,000,000 pounds of cordage would be admitted free of duty during the fil'st 5 years of the Commonwealth, which amount is only half of the average annual shipments from the I slands during the last 10 years. Beginning on the sixth year of the Commonwealth, on top of t his limitation there will be collected export taxes progress i vel ~' incrl'asing from 5 per centum of the full duty of 2 cents (4 centavos) per pound, to 25

"" ""

" '"

...."

,,~

Co."

approved all June 14, 1935, and made effective on Mav 1 1936 amended the cordage provi sions of the McDu;fie-Tydings Law by raising the quota from 3,000,000 to 6,000,000 pounds annually to be admitted free of dutr to the U. S. After its expiration, however, on May 1, ] 938, unless extended, all Philippine cordage ex})ol·ted to the United States will automatically be subject to export taxes and limitat ions provided for in the Independence Act. In a way this Act is more unfair than the McDuffie-Tydings Act because while it doubles the quota of du ty free Philippine cordage, beyond 6,000,000 pounds, the Philippines cannot ship a dditionnl COl'dage even upon the payment of duty. Relati011 of Plz-ilippi'le cOI'clage und twine to A ,w~rica'l im1JOl'f8 (If JICL rrl fib",· fwd twil!e O?rly.The United States import~ from 23,000,000 to 58,000~

PHILIPPINES 000 pounds of hard fiber cordage and twine ycal"iy of which the Philippine supplies from 12 to 32 pCI'

centum only. \'I.-CONCLUSIONS AN I) RECDMMENDATIONS

(l) So long a s raw abaca fiber is unsubstitute~ able, its American mal'kct is secure because thus it shall always r emain in America's f r ee list. Abaca manufactures which consists virtually of cordage, however, will barely survive in the American market duri ng the last ~'enr of the Commonwealth. Inevitable loss of this market unless the McDuffie.Tydings Act is amended so as to acco]'(1 the Phili ppines a preferential mtc, would Jll'oduce the following adverse effects upon t he Ph ilippine a baca industr y . (0) Th< Comm""wuhh wllllOle .bout " SO,OOO of ,,,.""' )... rly. (b) More ,n •• ""e.~.IICo' .bou, 2,7(0) ..1 'he r<"I'le n"'~ del'<rnien, up"" C<l<~' "< m,nul."u« '"u" I",,\: 10< .. ,I,,, m"no ,....'" ,he" h,·ehh<l<>li. (e) The rc<iuCli .. n 01 ,h"'" l'<oJ~ion by mOf< 'han 10 1'<' «"um will mUM abo ,b" • qu,,,,, 01 • mil 1""1'1. now depend, .. up<)<! ,b". pl.n ... ,ion' m"" loo~ (Ot "'hot •• 0 pl •• ,.

(2) T he United Stal;fs imports tremendous quantities of hard fiber COI"~gC and t w ine besid<!s

287

l'aW fiber yeady, of whkh the Philippines sUPJ/lies only from 12 to 32 pel' eentulll. Is it not just and proper tha~ An-erica shou ld at lea st continue to tolerate this, if fOI' no othel' reason than that th ~ cordage supplied Ly the PhiliPllines, is equivalent to about one-half only of the output of Am~rican owned cordage factories ?

(3) Like the sugar centrals the Philippine cordage factor;!'s nrc relatively young and were developed thl"ol:~h American encout·agement. Consequently, they should be given every opportunity at least to r ecover the capital invested in them.

v [f .-A CKNOWI,EDG!'>'IENT In the pl'cr,aration of this article, many valuable informations werc obtained [l'om the publications of the Fiber Ins pection Service and the Statistics Division of the Department of Agriculture and Commerce :lnd of t he Bureau of Plant Industry, Intel'nal Reven ue and Customs.

PHILIPPINE TOBACCO INDUSTRY IS COUNTRY'S BIG SOURCE OF REVENUE* OBACCO WAS I NT RODUCED I NT O THE P H ILIPPIN E S BY S P AN I SH MISSIONARJES

fl'om

the New 'Wodd.

The tobacco industry became popular almost from

the start

t.hat the government mn<ic it a mOJlopo!~' late in the 18th century. It was then the gl'entest source of revenue, supplyin:; practically one-half of the colonial government expenditures, The ll1011oJlol~' lasted till 1882. Howevcr, the tobaeco industry grew by leaps a nd bou nds, nnd not on ly had Ma nila cigars became a by-word wherever cigars

worc sold, but the industr y continued nnt! rem 9.i ns to-da t e the most importa nt of revenue of the government,

singh~

item as a sourcE'

If there is a ny industry that should descl've the foremo st attention of

the PhiJi}lpin(! government, that indust.ry is toba cco,

TH E TOBACCO I N n USTRY is the chief source of dh'eet re\"~llue of the government, virtually 50'7<. of t~e ext'isc taxe!! collected being from it. The uVCl'age yeal'iy collection during the six-yesI' pE'riod from 19:10-1935, inclusive was P8.858,689.20, This l"Cp l'esrnts direct collections from sales, ilpecific nnd privilege taxes; U. S, s pecific tuxes collected in the P hilippines and revertible to the P hilippi ne • Ed,'",j I,v OO)IISOO Il, 1''''0111'' ' '''''''' ,./Ih O"U,," 0/ Pia", }ICoJudr/l ,,,,,I SoliD",,1 RNro reil CD""co"lo/ '", Pldlil'pi"r [dnn>! •.

Treasury and to bacco inspection fees :dorl'e. All other r evenues der ived indirectly from tobacco as !nnd and incomes taxes are not included beeause of difficulty in theil' determination. There are over 600,000 people dependent upon the tobacco industl'? and nenrly P30,000,000 are invested in it, While only about 2"/... of the cultivated Rrea of t he countl'y is devoted to tobncco, this product and its manufactures, mnk fifth in OUI' export list and first as an employer of labor,

288

THE COMMERCIAL & INDUSTRIAL MANUAL

As should be expected, beclluse of deeprooted habits of the growers, who plant the cigal' filler type yeur in and year out, ilTespeclive of changes in the open market, there is at present a tremendous surp l \l ~ of the product which accou nts pal't!y for J. - CU!. TURE the lowest prices in years now being paid for it. l'ltilil)pi'lle Len! T ohacco PJ'od"c.:tioll.-The Phil- Isabel a alone is producing 233 ,500 quint,llls yearly ippine:; I"anks seventh in the world among Nle whieh is ;15,000 too much and the rest of the Philcou ntries producing tobncco. In the fi scal year ippine tobacco regions, 289,000 quintal s which is ending June 30, 1935, the country produced 623,160 94,000 quintals too much also, quintals (8 quilllai 46 kilos net) of tobacco from On the other hand although since 1925, the an estimnted area of 61,600 hectares. The ranking cigal' wrapper type has been commerciall~' gl'own pr ovinces in the order of their productive capacity in the Islands, through t he initiative and researches dUl'ing the same ye:ll' are: Isabela, Cagayan. Pan- of the Bureau of Plant Induslry (formerly a part J:asinRn, La Union, ecbu, Ql'ientul Negl'os. Iloilo. of the old Bureau of Agricullul'e), the present Iloeos Norte, Occidental Ncgros, Leytc. IIoc05 Sur, production is 2,000 quintals which is still short of Nueva Ecija, Cotabato, Surigao, Abra, ~ueva Vi7.- 5,000 to 6000 quintals to satisfy the local demand, caya, nnd Occirlental Misn mi s. The best varieties of tobacco for the production The lobi production of Isabela and Cagayan of cigar wI'apper tobacco in the Philippines are the a lone, amounts to al'~und 300,000 quintals or about Smllat1'a, varieties in open cultures and the native 42 pe l' cent of the total production of the countr y. Vizcflya and lIlal'og lti (or Simmn ba) in shade I t will be noted that P ilippine leaf tobacco prod- cultures, The shade-grown cu lture is the more dependable method at pre!<ent because it is not uction has declined fr0ll'\ 64,000,000 k ilos in 1920 infh,enced \"er~' much by the weather. to only 28,665,360 kilos in 1935. Tobacco ranks sixth among Philippine crops as p'he Cagayan Valley, the inter ior Vallevs of to area cultivated or about 2 % of the total area the llocos coast and plateaus of Southe,'n Luzon al'e t he cigar wrapper regions at pl'e ~ ent, The tinder cultivation, as shown in the following table: [lro",pect of open cultures in the Visayas and 11:.... "," , V'" Southern Mindanao, howevel', are great, 1.85).720 P.h,. 619.HO CO<Q. The situation is not so good a s yet in the .J 600,700 C<JC ..... u, production of the aromatic cigarette filler type. Ab •.,• . 441.170 While the local factories can u se about 25 ,000 168.~60 So,.. T<>b. «o" 7M1O quintals, only about 200 quintals were produced last 1'ypes Raiscd,-The Philippines now produces season, and this experimentally as yet, As r egards the minor types it is estimated that t hree principal distinct tYI>es of tobacco namely: cigal' filler, cigar wrapper, and aromatic cigarette the total product ion' of the same is ove1" 113 ,1GO filler. There are fOUl' minor types also grown but qnintnls, the different types being r aised in t he with the exception of the l/ oca1l0 batck, their following regions. The S!tlco'~ is a dnr\{ tobacco raised around importance is loealized. It is only recently that the the bou ndary between I1ocos Norte and Tlocos SUI'. /locll-no bat ... !:, espcciall~' the product of La Union The B atck is spotted tobacco, the 1I0cono bntck pl'ovince, has become an important item in our Icaf tobacco eX[lort trade when it fou nd appreciation being gl'own in La Union and in the northeastern part of Pangasi nan and the l'isayall Batek, in parts in the J apanese market. 'rhe cigar filler is the p rincipal tobacco type of Cebu, Negros Oriental nnd Negros Occidental. The Romcro is disti ng ui shed from the others by r a ised in the Philippines, the best quality being t hc petiolate form of its lea ves, It is a charprod uced in the Cagayan Valley and the best varieties being the . MCl ro[JlIi, Vizc flya and RCJ)ollo, acteristic crop of the Itawis di stl'ict which composes the southwestern part of Cagayan pl'ovince. This t~'pe should of course be divided into two All of these minor types are strong and hea"y sub-tYl>es the mild and strong. The mild-sub-type and as alt'cad" stated with the exception of the is ch aracteristic of the Ca:;ayan Valley while the Jl ocC!'TlO balck ~\'hich is n ow partly ex ported, their sO'onl!" s ub-type is of the other toba cco regions,

ToLacco is !>ngandist for it the world, while to Jll ':\ ct ical!~' 2

also the country's greatest prois exported to 44 count.ries all over nbaea to 25, copl'a to 10 and sugar countries only.

....

PHILIPPINES import.nnce is localized and t.hel·efore t.heir production and the demand for them t..1.ke care of themselves. COfl£ o{ Pro((uotion.-Genera l!y, the production of cigar fil!er tobacco does not pay but because of recent t~' phooll s and floods which caused considerable crop destruction and thus forcing the price to rise from 116.00 to PIO.OO, a profi t of about 4 % is at pI'esent being realized as follows ;

('uo.oo

rDl:OtII< rIO'" lS quio ... r. @ ('10.00 Tourc'l'<olCJ

"'"

289

presents a comparative statement of the quantity of raw material s used in the manufacture of tobacco products during the years H13,j and 1935 as reported by the Bureuu of Internal Revenue ; RAW

Us.,o

M AT£nJA LS

THE

MA NUPACTUR E OF

TOBA CCO PROOUCTS

12"",/) U"J

19l-l (K,Ios) Ci, .«II..

c" .....

(.,

Sh.J, \ ...... Tout (,om 7~J"ro< To"t c' p<nd"un: re' h~n:

'DeO""

(',}I).OIl

5 42.00

N" '1ICOlII, ret h«Llrc.

I'JO!I.OO

0". (,••.

!,..,.). Tout in«> .... f'o", 600 kilo< Tout ,"[!<nd,,"tc per h«."c"·

[' ~oIO.OO

291.7}

Nu rroli, p<' h« .. tc··

[' HS.2S

I n the ca'le of aromatic ciga~ettc filler to bacco, about 17 % pl'orit might be rea)ized nol'mally as follows; [tIC""" (..,,,, 10 q""'Llb ® 1'10.00 .. Tour eO>l oll"oJ",';oa ..

"200.00 lill.-IO

N" pcto/i. p<t b«r .. c·· •

1'29.EO

Batok to bacco is always profitabl e as the minimum price paid is P20.00 per picu!. On th is basis fllone, one can r ealize a net profit of at least 100/0 as fol lows ; Tour '",Orne ('Om II 4uio"l. (8 b."k @ "20.00 .ncl @ "8.00) Totor "re~d" .... c.

fill"

1'192-(10 Ill.5O l'I7}1)

I I.-MANUFACTURE

M01l1t{a ctltrccl Prodllcts.-In the ordel' of their

imllor tllnce, the to bacco nwnufactures in the P hilippinc!l nrC! cig-ars, cigarettes, smoking tobacco ~ nd chewing tobacco. To these must be lidded st.ripped and other pUl'tinlly manufactlll'ec\ tobacco. CignrcUes tnke mote leaf tobacco than cigars but t he best and finest leaves as a rule a r e pr efelTed in the manufaeture of cigars. The following table

B,)18,716

8.81USl

1}I).146

I' 20.20

In n favo!"able season, thc production of either shade or open (sull-grow n) cip;ar wrappers is profitablc as may be noted in the following data:

116.188

1,I.SO,S69

",10"0>.

S..okio. Cbewin, ,ob.cco Toul

191~

(kdo» 5."-19.810 2,91O.1S7 198.'18 IH,ll7

},lll.!})

The adoption of the individual cellophane wrappers has been II g reat step forwa rd in the eigar industry. Thcy keep the ciga l's in fre sh condition fOI' a considcrable length of time and Ilrevent breaki ng when handled, or carried in pockets. And above all, ever y ciga r-reaches the smoker in the same hygienic condition a s it left the factory. A great val"iety in shapes of cigars and cigarettes is generall y offered by a factory. Cig'arette are In'oduced in varied diameter s and in d ifferen lengths, and pI'ovided with either whi te or bro'yn (licorice) paper. S ilecially flavored cigarettes are al so made in a ccordance with local demand. Philippine smoking and chewing to bacco are of entirely differ ent styles compared with American products. Philippine smoking tobacco is the same cut tobacco used in the manufacture of Spanish style cigarettes while chewing to bacco is just a flattened cigar, except that coarser and therefore stronger (in taste) leaves are utilized instead of mil d leHves which are reser ved fOJ" cigal·s. Costs o{ Mamt{rr.ctuJ'c, - The following are typical cases of cigarettes and eigal' costs of ma nu facture:

I.-Cigarettcs (8. "", on "Uli .. n·· b.. nJ)

F'~fO<r

P';cc o( 1.000 I",k ...-{)O.ooo ",..,,,.,,) F'p<n •.,.Spcd6e Tn «7I I'L .)O 1'<' 1.000 Ci''''''<1. Co .. o( I,,',ob.cro. CiS""" P'P<' ( I toll.). M"hin. 0l"",or', l.bo,). Hand pock,,', I. bot • . . Co.. 0/ pock.,c P'I'<' . CO" 01 !i.hop.~b<tl p><k« ..• TO,.I C"1'<DO<.···· B.lon... d k(, /0< o,,,hucl. ;",«'" .nd ....,"" of !"oIi,

l' \9.00 1115

l,Ol

290

THE COMMERCIAL & INDUSTRIAL MANUAL

-----=~===-='--=':..::.::..:..:.:==-=.:.:==-----2.-Cigal"s &ocd onCI", A c;J!'" which .dl in ,he Am,,;,.n m.. ku .. 2 for 19<..,""00.) P. I. In,.,n,1 Rue"", 'nof1<C'''''' fcc" U.neJ S.. ", In,,,ul Revenue Tn P.<kjo~ & ""FT""I <'pc"",," l<.f ,ob.<co Phd'PFin< hi.".!. Jill" .nJ b,nde. LuI ,ob.teo "'<>1'1"'"' GC'OrSi. ut FIO(IJ. Cit'" m.~ .. ·• w'Jl'

0.)0

' .00 M.

..'.00 C;8 ...... i..<.f tob>cco .. C'8>«"" Smok,.,. ". AU o,her ,ob.«,,·

1'26.10 2.10 1'19.l0

The above data do not include managerial and other overhead exp<!~ses. It is obvious that more pl'ofits nt·" del'ivabl" tTom the hig her priced shapes 0 1' brands but the sale of these is not big. Production 0/ Il /amt}t,ctlU'ed Tobacco.-During the eleven.year period fron) 1925 to 1935, inclusive, the average yearly producqons of manufactured tobacco products we t·(, a~ foli~ws c"....

c,_,,«'<.

)IO.(lOCl.iX'OWliu ~.)()6,IXXl.ooo\m' ..

,gi,occo

6SO,IXXl kil ...

""rp<J "n" <f(

1.500.000 k'\o<

! 11.-CONStlJl1J>TION

The consumption of tax·paid manufactured tobac:'o pI'oducts ll1:ly be sllfficiently de1l10n~trated by t he ]934 and 1935 statistics as follows: WI

T""I SlDobn, ,ob,,:co. Ch<w;n, tob.«o . C;8'"''

C;,,,<,,,,

!.oe.1

% ~s %

119.S04 "'" 96 ~81.07)

K, •.

8U-46,789 N.... 100 % No •• 60 %

~.677,1l0,SSO

7,16-1,)9(1

Sa'p •• ,,!(.··

To ..!.

end,.

\,.1""

Sh.,< of U.""dS ..",

'0•

, .~

B.bu<.d 101, /0' .,v•• h,,,I. '"tere" .nd m",in of profi,"

So;'" r<. oi,,,

To"l

lI'uplX' ""PI"''' Ci,>r "" ••• P'per .oJ I.ber.. IJ.oIl (cn v... do,.,). L.bell.rS· .(P,cc,",,"") •.. Ccl1oph.ntn8 & hindin, by m>thi". ( m.«ml.oJ I,bor).

.m~lon,

PHILIPPINE TOBACCO EXPORTS

4.l0

"'<pm., m.,,,,.,.,] FIll« ""pp:"".

Che"... , .nd

Philippine tobacco products during the ten-~'ear period, 1927-1936, with the percen tages correspond. ing to sh ipments to the United State!;:

I"S

Too.l

toe.1

2l7.4H K,., 91 % 4/16,2(;6 K,.. 45 % 1Is.;t06.692 N.... 100 % ~,9SS.}64.}.~R

No<

S9 %

It is obvious that the abo"e data stand for both domestic and impoI'ted products. And as nl:l ny pcople, esp(>cially ~hc tobacco ,e-rowcI'S, 1!SC tl:eir own products which are tax.free, evide ntly also the Philippines is great toharco consumer. TV.-TRADE

Phili,,})iup Tobacco E.q)()l't.-The following shows t.he swcrnge vallie of yearly ex portation of

U19,S}7 6:.0.966 117,loOl 11 ,)11 S,~1l

6,1ls.l79 40.179 SS}.SS}

H.m ,~

1t is obviolls t hat Philippine cigars which constitute the vital tobacco export item of the coun. try, a s well as the t.rade ill partially manufactured tobacco (scraps, stripped rillel', etc.) are virtuall y de pendent upon the American market, E;;port tobacco products constitute 5 to 7 per cent of the valu e of the total Phil ippine export. As the result, however, of increase in the local con· :mmption of Am<'I'ican tohacco products. noblbl y t he cigarette, t he value of P hili l)pine tobacco exports has been on the decline. F r om 1927 to 1936, it hnd been reduced f l'om nearly 1118,000,000 yearl~' to PI 0,500,OOO, the lowest being a little over PlO,OOO,OOO in 19:33. Considering the fact that this trend is pal'allel to Philippine tobacco exporLs to the United States, it is obvious t hat it is dep endClr~ upon that country. Indeed the value of P hilipp ine tobacco products sent to the United States has dcereased from nearl y 119,000,000 in 1927 t o a little over P5 .000,000 in 1936, which is t he lowest beilrg registered. Philippine tobacco products go to at least 44 countries allover t he world but the chief customers aJ'e: ( 1) for cigar-U ni ted States, Chi na, France, Straits Settlemen ts, England and Spain; ( 2) for leaf tobacco-Spain, Ko r ea, Japan, China, France and NOl·th Africa; (3) for scraps, etc,-United States, Holland , Ch ina, Gibralt.'Lt, and Belgium; (4) for cigarettes-China, Japan, Cana ry Islands, United St."1.tes and FrRnce and (5 ) for smoking tobacco---Canary Islands, Gibraltar and China Philippine T"barr.o i m.1JOl't8.-Pa radoxically a s it mav seem the Philippines although a n important e):porter of tobacco, largely due to the stead)' increase of tobacco products comi ng from the United States. The avenll!,e values of ~'early importation of toba cco pl'oduct.s into the country dU I'ing the tcn-y(>nJ' period, 1927·1!)~6. a l'e alt follows:

PHILIPPINES Tou l nl .. 01 ,oboecoproj U(" ''''I"""d I'om 'he Uoi •• dS..... T",al ~.I •• of 1'. I. ,0",«0 prodo, .. <>rorr.J '0 'h, Uo".d Soar<,

PIIILII'P IXi: TOBACCO IMPORTS p,,,,,,,,,,,

Toul Valu,

,,.

1....I'otu<.,,,o .• CI,.", .. 5aoG~'"r·

1.087.9"

4.062.49S 7)9,49)

U,4X1 I,}-l("

.\It Otb,"

1·!.712.1~1

1'"

C<..I<

915.~S! ,~

I,On.9OS 7195i9 ·S.67l ll'~

It is evident that with the exception c..f the rathrr insignificant it('m-smoking tobacco which is partly I'll1p,lied by Chinn-the tobacco imports of the Philippines might a~ well be considered as entirely Amel'iclln. Of course 11 limited quantity of \\'I'UPllers (abollt 15 % of the tollll leuf tobacco imports) is supplicd by the Duteh Eust I ndies. During the ten-year period, 1£)27-1936. the value of Philippine tobllc<!{, impol·ts fl"om thc United States, had risen from nendy 1)5,000,000 in 1927 (a little over ')'I,OOO,OOO' n 1933) to about " 7,400,000 in 19:16. Leuj Tobacco b:f{lti-mf \It oj Tobacco P J'od ltcts B.eprll't6fl to tile U. S .- On the basis of the 1935 data of the Burcau of rnternal Revenue, the Ntuivalents in leaf tobacco of ~ l tobacco shipments to the United States were as follows:

g~~'(6; ~OSof~\~.c:,~",),Ioo~ S"'rr«i fiU«. <to. (77% Tot.1.

_ I.HO.)OO k"

vX' os).

1·14.4!'.170 II.iOI.Ill;

---,

----------+--."-.--I -:.'~-=___ '-"u",,, Ch< ...,n,

291

1,830.0::0 1,7.j(J.700 1.573,~X'

This qUfl.ntity of leaf tobacco is equivalent in turn to 13 pel' centum of the yearly tobacco crop of the Philippines. On the basis of figures llotcd in the United Stutes De\llll'lm('nt of C01'11llcr c.c Stati!;tical Ab!;.tl'act (01' 1!)35, by wright, the tobacco products fl'om the Philillpines fOI'm ~/ 5 of one per cent only of the yenl'ly tobacco consumption of the United Stntes Y.- REAl, P. I.-U . S. TnAlJE BALANCE In the st!·ict scn!lc of tnHlill!! und 011 the basis of the ten-yeul'. H127-l936 period, the PhiliPllin'es, with a )'carl)' lIvernft:e value of I'G,80(;,273 of tobnceo pl"oduct ~ exported to the United Stntes, would appeal" as enjo~'ing a favol'llblc blllance of over I'I.OOO,OOO ycal'1y. Indeed the trend of the bnlance of trnde in tobncco between the two countries is to become and finnlly st.'l)' in favor of the United States. Let us take the 1935 and 19Sf. (the latest avnilable) data which Ul'e as follow s:

It is evident that dul"ing the last two years (1935 and 1936), the yearly b<lI<lllcC in fnvOl ' of the United States, is nearly Pl,400,000.

In ordel", however, to do I'eal ju sti..::e to the PhiJippines-Amel'ican tobacco trade, one must consider evel'~' item, eS I)cC"ial!~' lhe invi:;ible Olles, in making an inventOI·\·. The items that affect t his tmde nrc the foll owing:

,i,..

(J ) Th. . . I". 01 A", .. icon (Conn<cc;,", .nd G,or,!a) "'"PI''''' ,h.. ,,~ telU,n,d '0 ,b< Unh.d S,.,,, ""«u", .e,o"'in~ '0 fn ..,n.1R.<~.nu: fi8"'<1 I,om 191R 10 19)s ,...,I".i«. ,h. a...., . p<'«n"t< 01 . h. ei~, ,, upot,ed 'h ' U"i«d ~''' ..... IIp,..d wi,k "un,,;"n I."" WI> ll.;f() 1'<' ''''''. An,! ,hi. i •• 110 in .h . "p.."J '"nd, 'l'i"~ ('Nn leu ,h,n 1% ;n 1915 '0 78H%i,'9'S, On'h<b..;.o(lkiln p<' I.000<l..,A,ijl.....nclJ.l ~ kilor 1o. th' hijlh " tI ..,«, , h. 108. 1 8 I ,9f'~ D. ', A .oJ ~H,OOO Jl.I' "8' " , hippe,l in 19)s ,o,h. IJni"JS,,,,, .t ' h' minimum 'or""ol !"').(Xlp" kilo. ,h,,, ,..." ",u,n,d ", ,h" too,n"1-Am<licon "'''1'1"<'' \o",I""d "", ...11 !"' sm.OOO. (1) Th. in ...." ood 1"'06 ..... ,ob.C(o in .... m<"10 oWo>r:d b, Am"';"' " in ,h. Philipp in .... ""cor"'! in .."ed .od ""I"",e olbu.'n, ... i.<.,,,,,,,,.d coo"" ... ,,!"'lX',OOO r""" () Th~n".,.. ,..,,1, • • 1u.of""Cfi.I .. ~J .."hi.... ,i.. irorn""clI""" , b. Uni"J Sca,,, r", ,,,,I",;., u<t ,n .h< Pk,,"f'I"" ''''''-.c<> ind.", .. du, in, .b. fo~,. , .., P',;O<I. 191H 9lS ,,·s, '" \?O.Os.>. The ",,,,,d. coo,;.. of ,ipt<,,< ';P' b.nd., . nd o,h,. l"bOjl'orh'. "n/o.l . ... «h". "~toph.", •• te, Th<", a.. o,b" matl'u!. boI, ,1m< ClftOO'r "" 'C(OoI.,ed lor bt ...... ... no' "'P' "'''' " 'mi"J i~ .h, Philirpi ... Cunom. "1'>''', (~) n.. I";jlh, oh" ." 0<1 ,,'" Dol. Philippine ,oblC<D rroJ ..... boI, "'."ie..' &1...,,10. &:<1 on Am"i"n '''I<I! .od "il,cad •. II 'h' 10Uo""nl ",«(I.".. per , 00 of -10 <.boc I... ).

".,I,

"',..d

pI"",

".co<

\".~.ic

1.0<.1 c,~"""... od

Tob.«"

Tob.«<>

I"f...

Cir"

'"•

""II>, «"'" ..

~ i~

Q",bnJ

« Gull

S 8 7S 61S < ~

~) Th <l f't<miu",. rai.! '0 Am«'' ' tt ;"'U"OC' com!"ni .. on in,""",,, of ,,,b,ceo ,hipm,n,> I,D", rho Philol'l'i.".o rlm "j.. "nJ .'1< .......... 'h, ,.. '0 01 1 % .nd) . ~oll '1 '''I'''",i.tly, who- ,h . u'e On Philipp"" .hirm,"" i. hirh", "nno, be u rl,,·n.d.

J""

On the basis of data on in!;u!"ance and freight collect on tobacco Jlroduct~ shipped from a nd to America and to and fl'01l1 the Philippines during the !)criod. 1933-1935, the yearly bill is Jl858,997. (~)

r..."lrlh, .. I"ie. ,,>oJ to AmrtiCiM <mrloy.d in .h< Phllil1"c, '"~I<~ in· du", •. "hi<h i.h. "d "" h'rhl. raid .... a.,. ..... J .~a .. onlr."J."""""'·

i., ,0 ""..

Iy .j(J,OOO pelOI furl,.

(7) 00 'b. o,h.o b. nd. th, Phil'ppi... i. be .. 6,,,' by " i4i,~I ~ ,u,lr '" 'he .ob.o<o ,,,,d, be ....,. 'h, .... 0 <0<10'"" ,n 'h< form of 1."",,1 R.... ou, '12," coll:c"J ,n 'h' !'hllirFia.. . nd ",.·."ibk '0 'h: Pb,lo!,,,, .. T,< .. ",,·.

To sum marizc the actulli P. r.-u. S . tobacco trade balance, a s fn\' back li S 1927:

THE COMMERCIAL & INDUSTRIAL MANUAL

292

For the United Statet,V,III< of .obl«o p<oJ""<o .hipped .0

P~ih rp,<>e

[. I.nd •......

"S,674,8S7 ,."."

~,:I'~'h~f.!J'"~':'~~a:-:r.;:":%-;:';i.~p::~;'f;~Qdbr.:.dJ~ ~'.!d

(,a," . "d .0 .b. Pluhpp'<>e. (l91J.-U .s...}..... . ........ . . V.!I>< of A"'<f,can 111>1",,10 and ...... b'","" u,," In P. I. ,<>1>.= ind_u",.y" • : . . '. _ ...•.. S.r • "<:,,, •• d by Am"ie".. <>etUpr"" hl,h ,II P. I.

8SS.997

}90.OS4

p'"''''''

.,Cf

,<>1>'0:0 .<>dum,•.

."."

To .. ! fo, U. $ .•

F Ol" the Ph ilippincs. -

~::::: J: l' !~~~r::. r;~":II~;rr:! I"~ I~~'~~~',~~:b~ ',~ p~ I.

"6,806,2;1

T"uury ( 19J,().1.91S)'"

747,416

To,.1 (0 . P. I.. .

l'U53,78\1 l' 60.149

Ihl.n<:< ," (.,. .... o( U. S

To better appreciate the balance in favor of the Unite<l States, let us take as basis the trade during the last two years, 1935 and 1936. sum* mal'ized as follows,

FOI" the Unile(l S ta) ..s.V. I", Df .<>1>><<0 ",CHI"tt.

M'K,II'D<OIU ""....

jb'FP<~ .0 P. [ .

1'7,I6I,68S

2,918,124

To .. 1 r.... U S

'"IO.G79,!"09

U',~~~::;;~!I R.'_""... ~....c"~~,.<.• ~d,ja p~ ~.n~ :::~".i~.k .'~,P. J. I' pt~"'" . h'PFd .0'Uoi«d Su«.··.

V,I", of P. 1. ToI>.cco

Toul f .... Ph,ilppin ... ·• fhbll« '0 ( ....". of U. S

1' 6.t8\I.n a I'J.J.89.8i1

Tot(d (I. S. To/wcco hllpo,-ts.- According to statistics of the United States F oreign Commerce a;s compiled in the 1935 U. S. Department of Agriculture Yearbook, ill 1934, the United States imported a tot~l of 7],748,699 pounds of all tobacco products of which only .1,672,320 pounds carne from t he Philip!>ines. The Philipl)ines share in America's tobacco imports is barely 7 pCl" centum therefore.

Under this trade agreement, the total qnantity of cigar leaf tobacco, cigars, and cheroots of all kinds permitted to enter from Cuba is not to exceed 18 pel' cent of the total quantity of tobacco used in the United States during the previous years for the manufacture of cigars. The figure of 18 pel' cent is based on the percentage of the lO-yeal' avel"age of Cuban imports to total domestic consumption of cigar tobacco.

".de ",,/I" ..... ""

N«h"I.<><I., ..I..

(1) Und« , n.",· 'I..,m.n< with th< ,...J Dc«mbt, nt<!. .b< Un;<<<l S...« "''-'Pf'<' ,01>'«0 ;"'po«,d from ,h.. <oun't)" .1<<< un, 10, 19}6 .. nd ,her"f", Ju,in, 'he lIf. of <h ' C<,,,y, ... <he (ollowiol

Un."mmcd F' pound... S"mrn.d Fr pound..

$1 .so 2.15

The above rates autolllatically I"educes t he duties on Cuban wrappers to $1.20 per pou nd because .according to Al·ticle 1l of the Cuba n tl'eaty, Cuba IS allowed 20 PCI" centum reduction on lowestrates of duty.

Effect of McDuffie-Tyding s Law E X1)OJ't Ta xes Uprm the P1dli1>pillt Tobacco Trade in the UlIited States.-Although the Philippines suppl ies the United States with many forms of tobacco, virtually the rade is made up entirely of cigars. For this reason, suffice it to consider only th is product in this connection. 1t has just been noted that the American duty on cigars is an ad valorem tax of 25 % plus a specific tax of $4.50 per J'ound. At present 99 0/0 of the eigal's shipped to the United Stales are of the 2-fol"-l -nickcl 01" class A, weighing about 20 pounds pel" thousand. Applying the tariff rates we get the following: Sptdfi< ... lOX~.50· . Ad . alo,, ", (25 % of $16.00, .h. ,nvo;« P';«) To,,1 .n F' 1,000"

U. S. TobflCCO Dutics.- 1'he United States has

three sets of dtlt ic[< 011 tobacco products-the world and two pl'efcrential rates. They are as follows: ~J)

II'""U , .. '" ( f,,,... I"". U.

s. ·r..,,1T Act) ....., {oUo..,·

2i;!,rk.?~~;I";)'!'~":~.d0~'<m"''''

$2 ~-1 /2 [~:

C,.,,"" kaf, .o",,"m.d Scup tob,cco._ C'8 .... >oJ Cb'fOOl>

e,."<",, .!< 1"1'<' (',..,

".. LuJi", wul'f'<1"

•

3S lS

so lb. pi",

so [b.

IS% ~l"" 15%

'«i~~i.J~~::~~::~n:.:::<:~•. k·~<~~n~~~;::,':, fr: ~~::"i~ t4~~t~:'rr;/.~~:~;~t

""F,II.. ,01..

W'-'PI'<' rob.><<o <"n"'III"",<I). «0 ( .. n.",,,m,d)"·.

F,U.. ,01>"'0 (",,.,,...!). Scur ,ob.«o... C, . ............. ____

51 so 1""

_.... . .

17S -•.. IS .. 175 , .... 22S pi ...

~:~~ ,'h: o~~.7 r..;.::;~~. Uoi"J S",,,-C,,b. T,.d. R«iproci.y)

Can it be imagined the effect of adding $0.094 to a Philippine cigal" now retailing at $0.02-1/2, so that the cigar will cost around 12 cents (24 centavos) each? Indeed it is useless to tabulate the efiect of the progressive taxes star ting at 5 ~er CCI'.'t on thc 6th year of the Commonwealth Government. At this time any profit as yet to b2 realized woulrl be so insignificant as to be discouraging. Because of some hints which recently appeared in the papers to thc effect that as a possible alter native to the tariH rate embodied in the McDuffie-Tydings Act, the preferential rates for

PHlLIPPINES Cuba mighl be extended to the Phil ippines. it is not amiss to make a study of t he possible effect of such t..."l.rirr rates on Philippine Tobacco. As only cignrs and stripped filler, scraps, etc. arc imporlant in the American trade, suffice it also to consider these two products only in this connection. The following arc the preferential rates for Cuba:

<"."' .....d filkr)"

S.,.ipp«! ~Ik, Scur ,ob.& ......

PC' 11>. 175 ,- .• 1}

2 lS-U-1 it

CIrri....

Ad \',Ior,m !'-..,. I~

"'rr~li).(!~<,i;~~·(;O fl;:. ~~ ~~~~s " .,- .-" ,-" Ad .. rOf<m. IH 11% of SI~.OO (;"~"'« 1'",,).

VI.~Cor-;CLUS IOr-;S AN D RECOMMENDATIONS (I) Th. lonot,h. 0\",,,,,,, ...... ,~ .. wlucl> w,1I bo ;o.~, .. bk ""I... ,h. M,DulIi. Tydio,.l.w ".",.od,"", w,lI.d«" .. 11.1I«, .10. Ph,l'pr''''' ,ob.c:co",d"'<ry .. follow>: (.) Th. ,,",,.,,,,... 01 ,b. """«0 " ...,. 101 0 pe' <..... u'" ... ,11 .11«, 6S.000 to_ b.<co ,.ow.n .od <hci. dCl'<ooknu. ( b) S'~'l!;':~ «n. oI'he """'1 b.nd • .., 6S,OOOhborcn . 100 ... ,11 bo PO'''''' "",ill muD ,10, ,,",,.,,iO<l of ,bc "".;"... 01'010'«0(><:'..,'" to ""'. 10.11. ,b. ",."nme"' ... ,11 ... nd .0 los< """"d r~.ooo.ooo ,. ««0"". a'h .... do:pe"den. upon 'he ,010..." ,ad.my, ...10, m'Du("",,, of 0'" bu,,,, li,bo .... ph •• «<_ w,1I .110 I>< ./I"""d. (1) As .h. ,ob.«o ,,,de """'ccn ,h. Ph,lIpp'." .ad ,10, Uni«d S", ... ", mu<.,lIy .,J •• """ou••• hcr. "oo" .. on .... h1 .. I, .., .h, ,""or f " .bguld nO, I>< .",.wn_

(c)

Ikuu..

ind.",,,,,

whil,'1" Pbllippi., ,u rpli« w"h ' oJ " 'bieh .10. mu ;" 'mJX>!' .nyw. y {'Om g,h« eOU"".". (l) While rd",.o 1915, 'he Pbllippin.. h.d 'h, .dv •• in 'h, ru,dy ,ob.«o ,-.d •• lI«w«" ,b. 'wa ",,""trll'. (.om ,he. '0 d"., lI .. m .. h... "u"'..! <he .dv' 0"" h, ","!y 1' 1.000.000, ,0 which, ,f .h, i•• i"blc ;«m. w." .dd,d, ,h. '0,,1 f,.o,.bl. boJ •• <c on f••o, of ,be Unlt,d S,. ,.. would be .,,,If 1' 1,:10(1.000 , .. ,Ir.

u,.

Tout In 1''' 1,000"

The tax pCI" cigar would then be $0.047. As the Philippine cigar tmde in the U. S. is dependent upon the 2-fol'-a-nickel 01' Class A, it is obvious that even the Cuban rate will drive out Philippine cigars in the U. S.

~.I

average $0.1 4 in value, it is obvious that raising the price of the Philippine product it will indeed be eliminated from the Amel'ican market, unless Puerto Rico cannot supply the American demand.

:d :,~';.t;~l;~(':..~:;;::r:;~i:';it ~~~:~',~:,u~~:~~ '~h:~~ir.pin;~,","'~:~ ~:fi~:~~~ ,n .~m<d.~ ci,... ""rpc~ fi~'

Sl"'dficu~.WX2.lj ...

(1) Smpp<d 611Cf .~~ ..... p ,ob.«o(A",..,. du,y $0,118 p<t lb. ) A,=,!< .. I..., 1'<' Ib • A.... ~. du'r pc< lb.. . \

29)

$0 lOS

0 21 8

SOW

II in spite of the fact that without the duty, Philippine stripped filler an'd scrap tobacco cannot compete with Puerto Rican identical products which

V I I .- A CK NOW LEDG~I E NT

The writer wis hes to acknowledge that most of the statistics embodied in this report were compiled from reports of the Collector of Internal Revenl.Oe, the Ins ular Collectol' of Customs and the Division of Statistics of the Department of AgricultUre and Commerce. He wishes further to acknowledge his indebtedness to the prominent men in the Philippine tobacco industl"y for many valuable informa· tion incorporated in the I'epart.

ECONOMIC ASPECT OF THE TOBACCO INDUSTRY IN THE PHILIPPINES' HAT THE tobacco industry in the Phili PI)ines has enjoyed world recognition as early as

the Span'ish regime is very well known. The progress of the indust.ry may be characterized as conservatively gradual. In spite of the fact that it is the most heavily taxed industry in the Philippines at present, still it remains very stable. The Philippine Governmen t de·

rives around eight million pesos annually from the industry in the form of taxes. This mYlounl is atmost 20 Ilel' cent of the annual t'xpt'ndltul'(, of the Government. The indu stry is very important in relation to the economic life of the Filipinos as shown by the following facts: About one million persons are dependent upon the indust)-y. Among the manufactul'ing concerns in Manila, cigar and cigarette factories employ the greatest number of laborers 01" around \2,000_ THE ANNUAL EXCISE TAX on tobact'a was mOI'e than million pesos in H134, or approximately 6(1 pt'r cent of tht' total specific taxes collected. Among the Philillpine exports, tobacco ranks fourth

,,,</..:::. JOBe

C. nH")~ ..h . /oIo'" Awonom,-.t. /Jurcau of Plant

with a total value of I'lore than ten million pesos annually, or about five pel' cent of the total exports. The total capital invested in tobacco manufacturer is about 10 per cent of the grand totul for all manu· facturing establishments. As cigar exporter the Philippines ranks first among the cigal' exporting

294

THE COMMERCIAL & INDUSTRIAL MANUAL

countries of the world. In leaf tobacco production we rank seventh, excelled only by India, t he United States, Dutch East indies, Japan, Korea, and Italy. SUITAB ILIT Y OF

THE PHILIPPINES

yer:rs is valued at almost six miUion peson in round figures a s s hown on the tablc bclow, TIIIlLIl SHOW ING TH E PHILIPPINE IMPORTS OF TOIIIICCO PRODUCTS,

c,,""<e

FOR

TOBACCO PROOUCTION

Because of the wide range of soil types and climatic conditions in the Philippines, there arc some regions suitable to the production of certain types of tobacco. This statement is ba sed on the resul ts of field and laboratory investigations conducted by the Bureau of Plant Indu stry. For instance, I"cgions with short dry periods, like the Cagayan Valley, are found most s uitable for cigar fillcl' tobacco; regions with well-defined dry and wet seasons, like La Union and Pangasinan, for batck and shade-grown wrapper; Central Luzon provinces for aromatic cigarettc fillcr tobacco; and regions with short Gry periods, like the Cagayan Valley or those with an cven di st:-ibution of rainfall like thc Cotabato Vallcy, and other coconut regions for open-grown rappcr, The re is no reason, therefore, why the Philippines should il1';po:,t tobacco products from foreign countr :es, And yet the PhilJ~pine averr.rre annual im pol'l:l t ion of tobacco prod~ct s' fOl' t.he h~ s t five

y."

i 9}1 19.\1 19.). 19.H. , I t )} .,

llveu, .,,'

Q""UU)'

!~JH9j}

Lo.f Tob. «o

V.I.: Q.. n""

1'.,.,

",I"

\ .Iu ,

,\ OW,." I'm' l.lJl,lI, 6,869 },811 ,JB j}o, ll ) 601,(189 I .Uh,S ' M9!I j .o>lO,~'9 8-l~. )S~ 8I S .}J~ )~l.<ll.J~ 2" IL,<>o1 1,I:06Il,<><,1 I._.\ln I .W • . ,) .......l i. J~. ") SI ••VO I 1 ,04l.~!JO 1.0~.l~}-'1J 0./5'+,1),,1 20<.»)0 oo~.oI7

Cb,\Y,n, Tob. = Q.an"" \ ·01 "" M /"

}','"

oW},9JJ

8SJ ,8)9

l~j .OOI

<:07,-14)

J I ~,W4

lO1 .b71

67M}6 ill,H)

1il.'.H

Sn .918

- - - - --- -bli,\'('9 - - -19~.1 - -16 --1,)O(),}6j. 198 i ,IOCI, IIB 7)0,1») 6lHOI - - - - - - -- - - - - - - - - -

It w:11 be noted that cigarette is the biggcst item imported with an aveu!.ge ~nnual value of 1'4,106,1'78 for the last five years , Thro;lgh persistent eifol't.s thl:! Government finaily succ(wded in the inlil'oduction of aromatiC! cigarette tobacco va!'ietics into the Philippir.cs, the cuILul'C! of whic~ is not only adaptable to local C!on' ditions but also the quality of the local product is compa:'able to the imported as well. Laborato:'y stu(!ics whkh were C!onduded l'cC!ently by the Bureau of Plant !ndustry revealed the Iact that with re~al'd to firc-holding capacity, color, aroma, text.ur e, and chemiC!al C!omposition of leaves, the local , product and the impol'ted leavcs are nearly itiC!ntical in many respeds. Another proof of this is the excellent quality of the ciA'al'ettes being ma-

•

T VI'IC,U, T C BACCO PL Asn-

II,Ml ,\ S , I SA BELA

PH ILIPP INES nufactured by Lhe Manila factories out of thc locally grown Virginin varieties. But why is it that they do not. become very popular to the consumers? To our mind there is only one answer to this. It is the Filipino psychology, i. e" anythi:lg foreign is supcrior, What is needed, therefol'c, is to inculcate into the minds of eve:'y Fili l)i:lo more of the NEPA principle, The production of suitable r~w material s is no longer a problem at present, Only al'o~nd 20,000 quinta!s of leaves are needed to be pl'oduced to supply th-e local demand which would require only about 1,000 heetal'es of lan<.l. The provinces of Pangasinan, Nueva Ecija , and Pamf!ang-a alone can easily meet his need. In fact then:! is enough lanll available in these Il:'ovinces fol' the In'oduct ion of even three times as much. China il}".ports annually severel million pesos wo)·th of Virginia leaf tobacco from thc United States. She is, therefo e, a potential market for the P hilippines of this \ roduct, The rhilippines has the advantage over other tobacco-growing countries DoS regards China becaJ 2 she is in t,er neighborhood. Our importation of leaf tobacco is n ~xt in imporbnce. For the last five Y(!lll'S tl:e Philippine average annual importation o~ led tob~cco is valued at 874,009, consisting of ¢ig~.r Wl':!ppCl' and Virginia tobacco, The coollerative trial pi:l.ntings conducted by the Burea:.! of Plant Industl'y during the last three years has 11I'oved conclusively t hat high gradE! wI'apper could be IU'oduced in many part.5 of the Philillpines, especially in the pl'ovi :lces of La Union, Batangas, and Laguna. The shadegrown wrappe l"~ I'aised last season from these provinces \\"en~ actually sold locally at &n aV:Jrage price of I~ g kilo. I n this conne~tion it is interesting to note that very recently the Bm':Jau of Plant Industry received requests fl'om severnl tobacco :firms of other countries fol' samples of the Philippine-grown ciga)' wI'appel·. They have expl'essed their desire to buy our product if the quali~y is satisfactory nn(1 the price is r:lasonable. The Philippine aver age anr..ua! import.."lt ioll of chewinc: tobacco fOI" the ID ~t five years is valued at Pfl32,r.Ol. As a rule, strong tobacco like our "batck" is used in the manufacture of the rrative chewin g tobacco ((Mascada). As already mentioned this type of tobacco is now grown successfully in Pan~a :; inan and La Union. So far the manufacture of chewin~ tobaceo ~im ilnr to the Amel'ican product is not yet an estab-

295

lished industry here. Very recently ont;! or two loc&1 factories have attempted to venture in thil1 industl'y. They a)'e, however, using partly imported leaves which is generally known as the clark fluecured tobacco, L et us wait and see whether this local product can compete wit~ the imported in the market. PnZSENT ST,\TUS OF THE TODACCO I Ni>USTRY

I N THE PHILIPPINES

So fal' the best market for our tobacco products is the United States whose share in the total Philippine tobacco exports is 64 PCl' cent in 1934, which consisted mostly of ciga rs. That the re is a host.ile campaign going on in some sections of the United States ngainst Philippine cigars cannot be dl'nied. To overcome this precarious situation there is only that the Amel"ican public may continue patron izing OUt· cigars of high quality. For the last few years and until now there has been an ovel' production of filler tobacco in the Phiiippines, the quality of which is g:meraIl,Y poor. Since the system of buying tobacco aaopted in the tobacco ?istricts is by ~veight, there is no inducement fo r the farmers to prod:.!ce leave:> of high quality. As long as the prescnt system of buying leaf t obacco in the Philippines exists the sa:'ne, the quality c;:f our tobacco will always re,main poor. To encourage the tobacco farmel's to produce leaf tobacco of high quality, the Government should do one of the following: First, limit the area to be llia nted by individual farmel·S. Secolld. modify ;lnd (:nfo,"ce strictly the. rules and regulations 011 classification of leaf tobacco. Third, coordinate the. activities of tobacco promotion work of the different government entities. When the Government tobacco monopoly was still in force in the Philippines, the quality of our tobacco was second to none. This was due to the fact that time the number of tobacco plants that a fa mily could mi se was limited to 6,000. Consequentl}', every farmer COllld attend very well to the minutest delledl s il1volvc;d ir,' the ltrt of raising- t.he crop Sllccessfully such as land preparation, weeding, cu ltivation, worming, harvesting, cm'ing, fermenti ng, and classification. If that !imitlltion is ado]>ted today there is no )'enson why we cannot mnintain the high quality of our product. If the system prodllced satisfactor y results in the past, why not now?

296

THE COMMERCIAL & INDUSTRIAL MANUAL

Another possible way of raising the standard of our tobacco products is fo r the Government to form ulate rul e and regulations governing the class路 ification Gf leaf tobacco and other tobacco products. For every type of tobacco 01' tobacco products produced, a certain set of stamhu'ds s hould be formulated . Those which do not meet the standards shou ld be rejected at once. Of course before this could be done t he farmer s and manufacturers should be given sufficient time to study an the details of the requirements. This can be facilitated by scndin'g out Government tobacco agents to give t he necessary instructions to all persons concerned . At present the Government tobacco promotion work is di scharged through three Governmenb bureaus; namely, Plant Industry, Intel'nal Revenue, and Commerce, Of course each one of them serves the industl'y ill a differ ent way, The Bur eau of Plant lnduslr y help~ the farmers by giving them instructions on the culbul'e of the crop; the Bureau of Internal Revenue on c{a ssification; and the Bureau of Commerce on marketi ng, If the different activities of the Government on tobacco promotion

To~",co P I,ASn- ]LAo"S, Is"SI!LA

wOl'k are coordinated, t hel'e is no doubt that it will be for the advantage of the people engaged in the tobacco industry in g:mel'ai and the Government in particular, By grouping all the tobacco personnel together and putting them under a sepa :'a.te of~ice, it is obvious that they can discha:'ge t heir duties to a g l'eater advantage, With the present organization, when the farmers, especially those from l'~mote places, have ce::ta in problems which need the help of the Govel'llment for their so~utions, they a r c at a loss a s to which office to approach , [n other words, much time is w;:.stC!d before the right office is located, SOJ\!E PROBLEMS OF THE

TOBACCO

INDUSTRY

IN THE PHILIPPINES

Ove1' l)1'ocluction of cig(lll' /illel'.-UndC!l' normal times there is a n' oversupply of filler tobacco in the Philippines, It is but natural, as is the case with other commodities, that whcn the supply is more than the demand the price becomes low. Such situation is brought about by the !ack of understanding o~ t he part of the growers as to the type of

MODBRN DRYING iN>T.u.L"TIO N FOR CocONUT INDUSTRY

PHILIPPINES tobacco that has a ready market. F or instance:, the Philippines imports annu:l.lly (!I'ound PSOC,OOO worth of lenf tobacco consis~ing mostly of ciga r wl'8ppcr. 'J'hc total production of this type of tobucco compumble in quality to the imported Pl'Oduct bas passed the experimental stage. Another locally and abroad is the "batck." The prevailing price of "butck" tobacco in the local market ranges from P25 to P35 pCI' quintal. OUI' cxpoltation of "bawk" tobacco to Guam, JUI>un, and China has been increasing steadily during the last icw years. H igh cost oj 1)TOduction.-The prodUction of aromatic cigarette-leaf tobacco in the Philippines has reached its highest peak in 1933, the same year when the majority of the Manila cigarette fnctories began to mnnufacture aromatic cigarettes out cf the imported Virginia tobacco blended with the local product, The !OC2.lIy manufactured aromatic cigarettes were selli ng fast at the rate of two for one centavo so that in a year's time about 15 differcnt brands were out in the market, It was also the time when the Burcp.u of Plant Indu stry made nn intensive campaign for the productit:.n of Virginia tobacco and, as a 'esult, about 2,000 quintals were pI'oduced the followin~ year, A yeal'

297

later, however, when the local deaiers of imported alomatie cigarettes noticed that their business was fast decli ning because the locally made aromatic cigarettes were becoming very popuiar to the consumers, tlJey began to reduce their price, Thus, they were able to undel'sall the local Jlroducts, This is possible because the imported leaves arc blended with the natiV'<! tobacco, thus reducing the cost of production', At this w1'iting the Tobacco Research Section of the Bureau of Plant Industry has received orders from several Manila factories for iocally g rown Virginia tobacco, In other words, thay are willing to buy any available amount of the Virginia leaf tobacco, Inadequate Imowledue on tlt'is type o{ tobacco,There arc other reasons why the local aromatic cigarettes cannot compete with the American cigarettes at the beginning, In the fil'st place their keeping quality lasts only for a few months as they arc very susceptible to the attack of molds, SlIch is the case whether the leaf tobacco u sed is the imported or the locally produccd 01' both, The manufacture of this type of cigarettes in the Philippines was still in its infancy three yeurs ago so that knowledge of the manufacturers about its re-

298

THE COMMERCIAL & INDUSTRIAL MANUAL

qu il'cments WllS stiU inadequate. However, we have observed th:"lt of the local brands now fo und in the market there a l'e ah'ea d~' a few whcl'c this objectionable featUre is hunlly noticeable.

This is purely

a factol'Y problem.

The manufacturers should conduct furt her research wOl'k along this line and they should not stop until the final solu t ion to this problem is foulld. P ast ex perience has shown also t hat if the Virginia tobacco is baler! and stol'cd in t h;:- same way as the ol'din:ll'y native tobacco the desirabl e qualities, Sti ch us aroma lind coloI', could not be obt<!ined. In some installces the leaves become moldy uftcr a few months. 'I'h is was the reason why at the bf'ginnin c: tilt! local lWI. I1Ufu('turel's were quilt; reluctant to nse t.he locally I)l'odu('(>(l Virginia to~ bacco even fo r blen<ting pm'poses, Lately, however, it was foun d that h: baling the leaves in a vcr)' compact condi t ion and toring them in ah'.tight con路 tainers such defect could be overcome,

LQc(d cig(lretles "e(~lY taxed ,- T o quote :Mr, Macleod, Manager of La ~ba lla Tobacco Factory: "Every time a factory proci':ses a hundred pounds 01' so of leaf tobacco into f'rished cigarettes and sells these to the public it pays the Government nt

least P39. The price of t he leaf tobacco itself, according to present mal'ket offel'ings, is about l'l~ per hundred pounds, 01' say less than one third of What a factory has to pay in taxes fol' manufacturing it into ciga rettes," H e fu r ther slates that ill the Philillpines the specific lax on cigarettes is based on the selli ng p rice cla ssi fic a tion pel' 1,000 cigarettes so that s mnll cignrettes and large cigul'dtes both pay the same tax, In the above statements it is indeed very clear t hat Philippine cigarettes are heavily taxed. If the Government wants to see t he local Pl'Odllcts to sm'vive competition in the open market the excise ta xes should be reduced to a reasonable levcl. SUlIl l\lARY

The Philippinc govcrnment derives al'ounel P8,OOO,000 from the tobacco indu stry in the fOl'1ll of t axes which is almost 20 pel' cent of its annual expenditures, Morc than a million people a re dependent upon the industry and about 12 ,000 labor crs are employed in the factorie s, As cigar exporter the Philippines ranks first amonf the cigar ex porting countr ies of the world, In lellf tolmcco p l'l1(l'.lction she ranl(s ;:e\'enth.

ABACA CULTIVATIO":

PHILIPP INES Because of the wide range of soi l types and climatic conditions in the Philippines, there are some regions s uitable to the productioll of certain

types of tobacco. The types of tobacco l'Uiscd in the Philippines that have I"cndy market arC' the cigar wrapper aud

the "batek." Statistics show th?!, th3 Philippine annual Importation of tobacco products is increasing, espeeioll)' Amcricnn cigarettes which was valued at PG,154.082 in 1935.

LMf tobneco and chewing tobacco arc also imported into the Philippines in considerable amount. For the last five years the average annual importa-

299

tions were valned at P874,009 and "632,601, respectively. 1' herc are three possible ways by which the standard of the Philippine tobacco cnn be ral~cd: (1) By limiting the area planted by individual farmer s, (2) by enforcing strictly the tobacco regulations on classification, and (3) by coordinating the government activities on tobacco promotion work. The tobacco industry is confronted with three important problems; namely, (1) o\'er production of cigar filler, (2) over taxation on cigarettes and (3) inadequate knowledge on the propel' method of tl'eating the cigarettes in the factory to prevent the a~tack of molds.

ABAC6-- YESTERDAY AND TOMORROW ' ATURE ORIGI ALLY provided an abundHllce of rc"'om'ce'" and force s for man's use but left him the Job of finding out how best to appl y and adopt them t.o his own needs. P erhaps the aboriginal cave dwellers did not study natural laws too inten s ivel~', b\lt at least they

were ingenious enough to fashion stone hammel's, wooden levers, wedges and rollers, which al'e listed among thc,fiJ'st crude to(lls. Fl'Otll prehistoric times to the present is a long s pan of years in which man has largely

gained mastery over his environment. He never could create matter. Yet thanks to scientists and inventors, pal'ticu[arly during the lastl century, the resources of the earth have been converted, transformed and used in truly marvelous ways. MANUFACTURING is of course just adopting thing purposedly. The word "ABACA" meant YESTERDA Y only one thing-Rope. Consider the Phil ippine Fiber Products, Inc., as a case in point. We IIrc making nttnlctive te~tile from the abaca fiber. The abaca textile i~ usen in the following articles: RAYON-ABACA

For centuries, cotton, wool, silk and flax formeo the "big foUl''' of the textile industry, providing the fubrics with which the world was clothed. Yet now let them disappear entirely and there will be no want of cloth. The chcmical industry will produce it from cellulose. Abac(l is pure cellulose. Two years ago the word Rayon would have mcullt nothing to the wisest pel路son. Today this magic name, associated with which is so much of the romance of modern business and science, is a subject of absorbing interest in directors' meeting,

to boards of trade, in chemical labOl'atories, to plant managers in charge of vast establishments with millions of dollars invested in equipment, to discriminating housewives, shop girls, and connoisseurs of taste and fashion, and to everyone directly or indil'ectly interested in the subject of textiles. While in 1913, the output of America was but II million and a half pounds, in 1936, it well passed the hunch'ed million mark. The meteoric rise of ra yon is an astoundinlI phenomenon of the contemporary scientific and industl'ial world. Thus Ab(lca like every other clement has its niche of usefulness, but these many triumphs, of which we boast so proudly, arc the blossoms from the tree of knowledge, a tl'ee which has required alIes for its growth. If we cut its l'OOts OJ" cease to tend and fertilize it, there will be no more harvest. Perpetual discovery of new tl'uth is the price men must pay for the satisfaction of plucking the golden fruit of progress. Let no one deceive himself with the thought tbat practically all the discoveries in

lOa

THE COMMERCIAL & INDUSTRIAL MANUAL

science have been made. Discoveries as far-reaching in their significance as any that adorn the annals of preceding centuries but await the coming of the genii who can unveil them. ' Vithout this new knowledge, the glittering accomplishments of applied research must ultimately come to an end. We may continue for a long period to make recombinations, readjustments, and new lil)plications, of existing knowledge, thereby cherishing the delusion that all is well, but the lifeblood of future progress will have been sapped. Research is the price men pay for material advancement and that economic independence and leisure essential to the life of the sp irit. Thi~ call to "RESEARCH " is the greatest challenge to OUl: people in half a century. The way in which it is met will deter mine our capacity to become the master s of our own destiny.

\-ABACA FOURTH ,<\M ONG PHILIPPINE

EXP\,RTS Abaca, known as Manila hemp, for which the PhiliPllines holds the world monopoly in production, was in 1936 again t h fourth largest expor t commodity, in value, being cx~eeded by only sugar, coconut products and gold. The value of abaca exports increased substantially in 1936, however amoun ting to 1>34 ,177,197, compared with 1'22,947,933 in 1935 and 1'17,323,136 in ]934. The value of abaca exports has increased steadily since 1932 and the 1936 figure was the largest since 1930. The 1936 increase was due to better prices rather than to greater volume of exports volume being about eight I)er cent lower in 1936. The high level was maintained over the end of 1936 until the end of January, 1937, with the highest prices in many years having been reached. Whether the previous high will again be reached remains doubt,ful in view of new factors likely to influence the situation- n substantially bigger production and incr eased freight rates. F reight rate t ilt is bound to affect the market. 1'he increased schedule of freight rates was recently announced by the European shiPI)ing conference and t he Associated Steamship Lines, I nc. Effective on May 1, this year, freight l"ates on hemp wiiJ be in ~ creased to P8.50 per bale to New York and other Atlantic Coast ports; })5 .00 to Pacific Coast ports; N.50 to Paci fi c Coast ports and overland and 1'7.00 to Gulf ports and overland. The rates on rope will be increased to 1'60.00 per ton to the Pacific coast;

PsO PCl" ton to Pacific Coast and overland; and }'90.00 JlC!. ton to Atlantic and Gulf ports. The

mtc on hemp to Europe is increased 25 per cent, to ]25 / -pe1' ton of eight bales, effective Apl·il t, 1937. It was rel)Orted t hat freight rnte was increased P l.- per bale to Japan, effective May lOuring the first half of January due to firm demand for Manila hemp in foreign markets, the London market continued strong. With local stocks vel·y low and local sellers and exporters showing strong tendency to hold for better pr ices, London and EUropean buyers forced by their low stock situation bought at prices dictated at the exporting points. At that time the market pmcticnlly became a buyers' market. The s ituation then tU I·ned diffcl'enUy a nd about the middle of January, this year, however foreign buyer s began to find prices too high and discontinued buying. By the end of the month, demand from abl·oad had practically cea sed. At the same time, it became evident that production in the Bicol region will be somewhat larger than had been anticipated. This 'luused producers and dealers to offer abaca in considemble qU'antities, accelel'ating the price decline with the result that at the end of J anuary, I>rices in the lower grades, from G down, were below the level at the beginning. Prices in the higher grades wel·e nominally slightly better than at the beg inning of the month, but the whole mar ket was weak. There was a pause in the market, with both seUer s and buyers holding. It was believed that the consume rs have sufficiently stocked themselve1; for their future requirements. In Davao, wherc there was no evidencc of increas ing production, the market continued firm , with prices on all graJes somewhat better than at the beginning of J a nuary". In volume of exports, Japan occupied the first place, in the import of r-.Ianila hemp last year. Exports by markets in the two years wel·e as follow s. in bales: I9n Uni .. J SUIt' .~d C.n.J.' Uni .. d K,nJdom· · ··

eo.,""t""] E~rop<

J'p.o"

}.u.".h. 'nd Ntw Zul.od Q,h« tount"".

ToUt.

) 7).168

}/Yj.7· 7

n6.17~

118,116 In.l5O

16S,7lS SIS.OIl 11,178 H.700

.SO.2OS 19•• n

".0»

1.•• 8.96) 1.1ll,8·0

Although the United States is only the third best mar ket in volume taken , it probably led in value, a s the Amer ican market takes the more expensiv(' gmdes.

3D]

PHILIPPINES Domestic mill cOI\'.~\1mpt i on adds about 60,000 bales n year. mostly unbnled hemp. Production fell of( in 1936, as expected, balings amounting to only 1,295,010 ba les, against 1,480,396 in 1936 and 1,4'11 ,202 in 1934. Stocks were estimat· ed at 147,662 bales at the end of the year, or con· siderably undel' the 191 ,1 21 bales at the beginninK. Pl'oduction is expected to be about t he same in 1 9~7 as in 1936. The strong market of the last half of 1935 did not carryover into 1936. Balings did not fall off to the extent Ilnticipated, in the first quarter of th~ year, and all foreign mal'kets wer e stagnant, with the n:~s ult that pl'ices cased off during the first foul' months. Holders generally were unwilling to sen at the IOWC l' prices offered and the market was inactive, though there were sOllie sales by holders tired of waiting fo (' uti. upturn, A notable decrease in balings in April and May, together with increasing interest on the pInt of foreign mar kets, particlllarly EUI'ope, caused priCes to advance sharply to ...·ard the end of May. ,he market continued strong throughout the r est of the year, closing with a notably firm tone as dema d from a ll export marko:ts increased in Decembe~ and balings o.on-

tinucd model'ate. Holders were perSistently optimis_ tic and inactivity develo p with every recession in prices during the year, A popular grade, J -2, fell from 1'12.00 pel' pieul at the beginn ing of the year to PIO.25 at the end of April, rose to " 13.25 at the end of Sep tember and closed the year at PI6.QO. i\ranila priees on the l)l'ino.ipal grades at the beginning and end of the year were as follows: G•.rI.

w ..

,. J .. ,,., J·2··. ,,.,".. c,

G ...

J••. ! j'U.}(! w.~

19.15

1850 1~ ·J5

n.7S

10.2) 11.00 9.7~

8.15 i.50

D.... 11 j'2I .OO 2).00 21.00 19·00 1650 16·70 15· S1 16.00

IH5

H.n

lJ.OO

Cordage exports declined due to the fact tha t the quota limit had been reached in Ul35 and new shipments to the United States cou ld not be resumed until the new quota yeu I', beginning May 1, 1936. About 65 per cent of the 6,000,000 pound quota f or the year end ing April 30, 1937, had been shipped to the United States by the end of the year. Ship-

Ferq'uson

"30,,,2_______

COMMERCIAL & INDUSTRIAL MANUAL

ments to other countl'ies were somewhat increased in 1936. 11)1 191' ,;.,1.. Kiu, UOUll 1.1S7.91B 1,7n,lOJ 889.)8) 7,9}M07 2.l11.619 6.60VS' 1.317,7»

'<I.,

Uni"d SUI<I.

Toul

p,,,,

Sections two, thl'ce, fOUr, f ive, and s ix of Execut ive Order Numbered Eight hundred ninety-eight. dated October twenty-eighth, n ineteen hundred thirty-five, are revoked, PHIlIPP[NE

Y'J'

CORDAGE QUOTA FOR J !l36-1937 Cordage quota to be shipped to the Un ited St.."ltes from the Phili l>pines for the year 1936-37 has been allocated to the different cordage producers or manufacturers in an Executive Order No. 36 by His Excellency, President Manuel L. Quezon, issued recently. · The allocation is made to offset the surplus shil>mcnt during the p receding fisca l year, amounting to 1,538,600 pounds. The Philippine cordage quota which may be shipped to the United States during ally twelve-month period is 6,000,000 pounds. Last yellr the shipment totalled 7,538,600 pounds. In view of the surpJus shipment last year, the quota this yeal' is reduce'd to 4,461,400 pounds allocated by t.he President as jollows: To Johnson Pickett ROJ.>e Co., t.hirty-foul" and six hundred seventy-four ti\ousalld eight hunched forty-seven millionths per centum of four million fOUl" hundred sixty-one thousand four hun dred pounds or one million five hundred fort.y-six thousand nine hundred eighty-four pounds; To Elizalde Rope Factory, sixty-three and fOUl hundred twenty thousand nine hundred twenty-three millionths per centum of four milJion four hundred sixty-one thousand, four hundred pounds or two million eight hundred twenty-nine thousand four hundred sixty-one pounds; T o Manila Cordage Co., one and four hundred thirty-five si x hundred twenty-one millionths per centum of four million four hu ndred sixty-one fou r hundred pounds or sixty-fOUl" thousand forty-nine pounds; and To General Manufactul"ing Co., Inc., four hundred sixty-eight thousand six hundred eigh t millionths per centum of four miJJion four hundred sixty-one thousand four hundred pounds or twenty thousand nine hundred sixty pounds. The ColJeetor of Customs shall, as heretofore, issue permit fO l' every shipment made by each manufacturer in accordance with the provisions of Executive Order Numbered Eight hundred ninety-eight, but within the limit assigned to each manufacturer. • ·'n"Uelin··, :'>\"rch

201.1>.

Hl37

CORDAGE

EXPORTS FROM 191$ "TO 19)5. V4/.. QJ Q"J''''J Q"J''''J oJ T"J/ T"41 b,.",

V,··J,)

n,m,)?l 10.()6.I.9H 11,18).819

1916. 1917

,,~

14.~9-I,1O)

1919

1),667.ooB 11,8S8,4)O 10.114,79)

,,~

191[ 19)1 193}. 19}4

8,~S[,21l

11,907,769 [8,)7,68) [7,61M15

19U

1'.. / .. Of

°f/(f'i' (,. ..b

T. U. S

MH.Oli

~,i}7,n l

1.714.$90

1,810,910 },n),418 ),S)O,876 UOMSO l,IOti,4H

4,'OO,lo09

1,)~,460

~.~6S,591

7.ISl,M; 7,117.164

1'}15.516 I,S6-I,u8 1.95-1.671 1.771.7l-<

1.)[8.162 1,81}.S48 1,668,1l8 1.)21.6)0

4.809.687 8.G-l7,[08 10.687.106 9,I9799S

Ex,..") (,,,

I,nul.-!

~.811.;!IO

).1)8,601

F~,.",

V"")

I.OH.41O 830.)01 l.lO5.978 1.813.996 1.~H,6S6

FUTURE: SEEN FOR ABACA The Philippine abaca industry faces a bright futUre in the American market, according to H. T. Edwards, technologist from the U. S. Depaltmen t of Agriculture, duri ng his sb.\y in Davao and the Bicol provinces to inspect the abaca producing l'egions. Mr. Edwards is attached to thc fiber office of the Department of Agriculture and comes to the Islands periodically on inspection trips. H(' stated that abaca and other Phil ip pine fiber s face little competition in the American market, as only the lo\ver g r ades of Philippine hemp are rivalled in price by Mexican sisal and fibers from Sumatra. In view of the pecu lial' position occupied by Philippin e abaca in the Amel'ican market, he expr essed the opinion that this product will not suffer the same fate as sugar and other local p roducts comI)eting with American goods. 8IUGHT

PHILIPPI NE CORDAGE QUOTA FILLED IN U. S 'nhe cordage quota of 6,000,000 pounds a year, impol'ted duty-fr ee from the Philippines, which sta r t-· ed May 1, 1936, has been fill ed, t he treasury department announced a s of May 17th, 1937. Other Philippine commodities on a quota basis, starting Janual'y 1, 1937, to May 1, reached the following figutes: coconut oil , 25 a nd 1/10 per cent of the tota l ; refined sugar, 35 and % per cent ; and unrefined sugar, 33 and 7/10 per cent, ABACA CLOTH FACTORY TO BE ESTABLISHED The establishment of a textile factory to manu· facture a better quality of abacii. cloth, caJled aba('.alinen , is planned by the Department of Agriculture and Commerce. Samples of this cloth have been sent to London and will be used as basis f or determining the type of machinery adapted for its manufacture .

PHILIPPINES The major urgcnt problem of the abaca in路 dustry in the Philippines is r.ol the need of direct government subsidy or the establishment of abaca centrals but a government campaign among abaca growers in Bicol, Samar and Leytc districts to change the antiquated syst<!m of abaca g r owing, according to M. M. Saleeby, abaca fiber expert and exporter, and organizer of the government floor inspection divi!;ion. Before making these steps, the abaca farmers must be told to clean entirely their plantations by Iliowing the lanel and planting new abaca shoots, which would take at least three years, he sa id. With the exception of foUl" or five plantations in t he entire Bieoi, Leyte and Somal' regions, all the other s have kept t he same old abaca trees that were planted many years ago, The worst part of the situation is that B)eol abaca growers have never wken good care of th it' abaca plantations, Mr, Saleeby lamented, in eontl'llSt. with plantations in Davao where the fields al'~ plowed nnd plants arc changed as often as possiblc,

J:\t

ABACA CENTRAL IN v AO C ITY To giyc cncoul'UgC!lllent to "ilipino abaca producers in D;\v80, especially in the manufacture of better abaca products, the National Development Corporation plans to establish an a!:mca central in Da vao City, with the cooperation of the Philippine National Bank, which is necestary because the bank has a large tract of land in Davao that has been leased to the Japanese. According to a provision in the Philippine constitution this land will be turned over to the Philippine National Bank as soon as the tcrm of the lease expircs, It js understood that should th2 plnn of the NnLionnl Development Cot'poration mntcl'ializC!, similar ventures will be under. taken by the corpomtion in other regions most likely i,: t.he Bicol provinces, In trying to cooperate with the Nationul Development COl'pol'Ution, the Philnr.路 bank only desil'<!s to trunsfcl' the lcnsed lands to the Filipino corporation, it was learned, EII.\mC,\TiON Of' BUNDLE D ISEASE

The Ill'Cvtdling vuscular bundle disease affecting thc abaca industry in Davao hu s reached sueh threatening l)rOpol'tions that morc extensive and active cont.rol measures arc nccessary to save the indush')', is the l'epol't rcceived by Director Silayan of plant illdusb'y from Dr, F, M. Clera, plant pathologist of the bureau, Dr. Clam stated, the results of eradication campuigns conducted by the burcau

303

since February show definitely that the industry can be saved from the disease, The infection is very sedous in thc districts of Tongkalan, Uppcr Bayaba s, Tomayong and other places but up to the pI'esent time about 20', of the infected area in some plantations has alread\' been delll'ed of the disca se, ' With the present control activities now being undel'taken by the bul'cu u of plant industry and the cooperation' extended by public officials, planters and priva te. companies in Davao, the eradication campaign is progressing rapidly, Dr. Clara also states that the abaca industl'~' in Davao is still men!lced by other two di:;easesthe bunchy top and the mosaic diseases, Th ~ former disease was successfully controlled by the bUl'eau of !)lant ir,du stl~' when it was first noted in Davao in 1930, The pl'cl!ent cases of bunchy top are the remnants of the pl'eviou s infections, The mosaic disease is a new di sea~c of abaca re(',entiy found by thi! bureau. J apane~p al;ara plantatiun owner~ and producers nll\y be driven out by poor business which will resu lt from the present precarious situation of the industry t here, accordinr:- to Dr, Feliciano M, Clara, A leading Japanese abnca piantel' in Davao, }[l'. liimo, intimated to Dl', Clara that unless a means of stamping the myst~l'ious plant disease is fO\md, the Japanese will be forced to nbandon their plantations, I t was reported that in some plantations 70 Ilel' cent of the abaca IJlants have been wiped out. Wonied over the present situation, many Japanese abaca producers h:lve ~en t men to inves tigate the possibility of starting plantation s ill Borneo, ABACA CI:JNTRAL Pn QD1,EMS

Severnl serious lll'oblems which obstl'uet the immedillte carrying of the plan of the National Development Company to establish an abaca central for the Bicol I 'r~ion in f;"I'!;tI/!n n WI'I'(" rrv("n led by Assemblyman Norberto A, Roque, SOl'sogon, The most sedous. according to the solon, is the adoption of a basic share bet.ween the government corporation and the abaca planters, the latter, believing the establishment of the central burdensome in some r espects, being l'eluctant to cool)erat.e unless assured of a GO per cent sharc, Assemblyman Roque pointcd out the differences between conditions in the abaca plantations in Davao and the Bicol region. He said that while in Dav80 the plantations are so alTangcd as to have a system

304

THE CQ,"lMERCIAL & INDUSTR IAL MANUAL

of ronds making them accessible to h'nnsportntion, this is not so in the Bicol region. He pointed out that in his province, abaca has to be transported from the field to the provincial highway either by carabao or by men, whereas in Dnvao tl'llcks can get it because of the roads to the plantations. Assemblyman Roque is confident, however, that aU these problems will eventually be solved. He revealed that he ha s been negotiating for the site of the proposed cen il'nl and has been able to persuade a pl'oprietol' to donate to the government morc than 1,000 hectares of abaca land, situated between Irosin and Juban. All abaca experiment station costing P5.000 will be built in Tacloban, according to Benigno de la Rosa, representative of the Bureau of Plant Indust ry. The abaca fi\er coming from Leytc is of the poorest quality, To improve the fibcr, field workers of the bureau of plan"t industry were sent to make a survey of the condition existing among the farmers. It has been found that local farmers do not use pl"Oper instruments in stri~ing abaca and that the abaca stripped in this provInce is small and ShOl·t, The famous Benito bolo which is largely responsible fOI' the high quality of abaca fiber produced in Davao will be introduced to the local fal·mers. New val·ieties of abaca plants wil! also be planted to talte the place of the old stock which is short and stunted. Efforts will be made to plant ·the variety of abaca grown in Davao. With an appropriation of P300,OOO already authorized by the board of directors of the National Development Company, construction of the first abaca central in Binabutan, Albay, will be started at once. Dr. Manuel L. Roxas, director of the National Development Company, is leaving fOI· Albay this morning to undertake the work, which will be rushed to completion in about 90 days. The proposed abaca central is estimated to cost about P250,000, including buildings, machineries and equipment, According to the plan, the central will be equip})ed with complete modern hemp baling and pressing facilities and will be provided with warehouses. ORGANIZATION OF COOPERATI VE ASSOCIATION

Direct government aid or subsidy to rehabilitate the Philippine abaca or hemp industry was sought in a series of resolutions unanimously approved at "" Bullctiu", JURI' 9,11137 .

the second annual convention of the National Association of Abaca Producers in the Philippines, Over 100 abaca producel·s, dealers and merchants from Davao, Leyte, Surigao, Zamboangn, the Visa. yas, other abaca~producing provinces in Mindanao as well as those from the Bicol region attended the meeting. Leading producers urged that the government take immediate steps to bring back the once prospel'ous Philippine industry, upon which thousands of inhabitants of thi s country depend solely for their livelihood, GOVERNMENT MUST HELP They maintained that a~ the government has helped the sugar indust.ry become the leading ilol.dustry in the Jslands, so must it help t.he abaca industry, which before the last five years of the de· pression occupied a commanding place in t.he industrial and agricult.ural scheme of the country, Abaca producers furt~er held that now is the most PIOPltlOUS tmle fOI t.he government to help them, even if only to revive 1::he industl'y, inasmuch as t he government has embarked on a long-range economic progmm and possesses the available funds for the purpose, this being a major objective of the Commonwealth regime. RESOLUTIO!\"S PASSED

Among the impOltallt. resolutions passed by the convention were:

MACH INE DESCRIDED

The convention was addressed by DI'. Manuel L. Roxas, Malacalian Economic Adviser, detailed to the National Development Company, who explained the advantages of the new Krupp "Corona" decorticator over the stindle motor method or the antiquated hand method of extracting fib~r from the hemp stalk. This new German machine has a fiber extraction capacity of 3.4 per cent of the total weight of the hemp stalks, as compared with stindJe motor method, whose highest efficiell'CY is 11k pet· cent. According to officials of the Fiber Inspection Service, the stindle and hand methods nre employed at the various abaca plantations in Davao. Dr, Roxas told the abaca pI'oducers that the National Development Company has already mapped

PHILIPPINES support and financial aid. The hemp people feel that sugar has been pampe1·ed and f inanced by the government t o the neglect of fiber. There is a large measure of truth in what thei r protest says. An e)(amination of the loan records of the PhilOne of these, according to Malacai'ian economic advi ser, will be instal led in the nicol region, e ither ippine National Bank will produce much evidence in support of the hemp men's jealous protest. At in Alba.y or in Sorsogon, in II. few months. the same time a study of those records will give "4,.140,000 I NVESTMENT many pointers as to why the sugar business has It was explained dUring the convention that been on the preferred- t reatment li st. T he governOavao produces about 40 per cent of the hemp out~ ment got so much of its money soaked away in the put for cordage purposes, but that the Bicol r eindustry that it was forced to extreme measures gion turns out DI>pl'oximateiy 50 per cent of the to escape bankruptey, not merely of the sugar busi country's better and higher g rade hemp fiber, which ness (or at least a large portion of it) but also of is turned into clothing, hats and other f iner and the government bank and, through the government morc durable abaca by-products. The remainin£" bank, of the government. It must be remembered 10 PCI" cent of the Philippine hemp production is too that the escape would not have been what it was suppl ied by the rest of the abaca producing prov- if it had not been f01· the favorable position of Philinces in Mindanao a~ elsewhere. ippine sugar in the American market. According to avaih\ble statistics the total inIf the Abaca people can manage to get their vesLment on t he cordage ~dust:ry alone in the Philindustr y in debt to the government to such an exiplJines is !lut at PI\,400,OO. It is estimated that tent as the sugar industry was, they will be in a 1,030 pe1·sons are directly d,pendent upon the five position to demand rescue efforts, possibly rescue Philippine cordage factories for t heir livelihood. investments and cr edi ts. However, the anxiety that went with the unsound situation of too much govDEMANO NEW DEAL In 1910 the Islands exported, 344,OS2 pounds of ernment money in one industry (sugar) drove home cordage valued at PSl,S62. In 'f920, the amount a lesson and it is hardly possible that the hemp people. could pull enough strings to get such an injumped to 4,416,792 pounds valued at Pl,373,706 ; in 1!l30, 13,858,450 pounds at P3,106,462; and in 1935 side track. Al so it is far from cel·tain that there would be as many favorable factors to help in getthe total export reached 17,614,615 pounds, valued ti ng out of the corner. at 1'3,323,630.

out plans for helping the abaca industry. He said that t he corporation is negotiating for the purchase of t.wo "Corona" decorticators for its projected hemp centrals. each of which will cost well over 1'200,000.

Endorsing fully the producers' conce1·ted effort

to enlist government aid for the abaca industry, the nicol Pioneer in its leading editorial Saturday entitled " A New Deal for Abaca" concluded with: " We sincerely believe that a new deal for our abaca industry is in order. We have faith in the delegates to the convention of abaca planters in the Philippines; and here is hoping that after the deliberations of the delegates, after they declare the gathering ended, a new abaca industry will have r isen in our country." THE JEALOUS INDUSTR ... •

The abaca indush·y is jealous of the sugar industry. With reason. The sugar business has grown, in volume and in standard , whil e the hemp business has siiPIJed. But the jealousy is not merely a matter of size and rate of development. I t is largely a mntte1· of competition for government • "Ilullctin",

J\ln~

]0, I(I3i. l::dit ori R

A combination of circumstances formed a conspil'Ucy to cause t he government to overplay the sugal· business. The Philippine government is not entirely responsi ble for that combination of circumstances. There were man~' factors over which the government had little or no control. There wer e far too many complications of facts and factors for the fiber people to build a case on precedent in government fi nancing. When we weigh t he facts we are forced to the conclusion that the fiber producer s and promoters might as well forget their jealousy and disregard the sugar case as a precedent and argue their case on its own merits, as things stand now. Cn this basis they have an excellent case a s far as government interest and encouragement are concerne'!. Also it shoul d be emphasized too t hat they have every legitimate right to argue their case, making it just as strong as they can. Their industr~' i!'\ worthy of suppor t, worthy of their best efforts to

306

THE COMMERCIAL & INDUSTRIAL MANUAL

save it and promote it. It merits better promotion than it has received in the past. However, we might as well l'ealize that it wiJI not get what it deserves if it. is to depend :.Ipon govcrnment subsidy. There will bc little if any government subsidY. The government can give some help in the matter of encouraging organization and fostering self-help within the industry, also can direct some scientific work to further the development of bettl<!r plants and improved methods but the industl'Y that depends on ~ovel'nment handouts certainly has no brilliant future. That individuals can build a successful and pros- . perous fiber industry is thoroughly demonstratec in Davll o whel'e Japanese hewed into the jungle and developed a fiber industry at the very time the business was going to pot in other sections of the Islands. Those wbo seek sound promotion cf the industry will do we] to study Japanese methods in Duvao, will have a better chance for success by emulatin-g the builders of the industry there than by waiting for government subsidy. ABACA EX PERIMENTATiON To BE ESTABLISHED IN ABUY~G â&#x20AC;˘

The selection of Albay i,ter.d of Leyte by the

National Development Company, a semi-govcl"nmental enterprise, as the site for an abaca central, even if the latter province produces morc abaca than the former, caused no little commotion amonG people of this ptOovincc. The blame was laid at the very feet of prom_ inent Lcytcii.os holding responsible positions in the insular government for their apparent lack of foresight, (or, shall we say, lack of COOPERATION with resident Leytenos in promoting progress in the province?) by our local provincial officials. Partly to improve the quality and yield per hectare of the local abaca and partly as a mearts of quieting down mass dissatisfaction over the 50ca:!ed NDC officials sid'! tracking of this province, officials at Manila recently approved the appropriation of 1)14,000 for the establishment of an abaca experimentation station here in thi s province to be located at the municipality of Abuyog, the Lookout learned from official sources here. The provincial agronomist said that local abaca is black, too low in grade. The establishment of the aforementioned station, it is hoped, will remedy the situation. Construction of the proposed station is expected to begin next month.

HIl~IP Ron MA"IN(i INITALLATION

COTTON AND TEXTILE IN DUSTRY' 0 11 Nascent Textil e In dustry

INeE T I ME immemorial cloth weaving has been one of the principai household industries in the Philippines. The natural ability and dexterity of the Filipino women in the manufacture of cloth with crude looms have received admiration and praise from early foreign travel-

lers and historians. One of these writers, Tomas de Comyn, remarks: "They succeed in reducing the barsh filaments of the palm tree, known by the name of abaca, to such a degree of fineness that they afterwards convert them into textures equal to the best muslins of Fengal. The beauty and evenness of their embroideries and openwork excite surprise. They gin and clean the cOLtOll, and t hen spin and weave it without any other instruments than their hands and feet, aided only by the coarse and unsightly looms they themselves construct in a cornel' of their huts with sca rcely anything else than a few <;anes and sticks." HOWEVER, THE INDUSTRY HAS NOT ADVANCED from its primitive state. The same slow, laborious and antiquatec methods and equipment prevail just as in the olden ti~nes, although I路ecently an impr ovement of the native loom has been contrived by Dr. Vicente Aldaba, Chi'ef of the Fiber Research Section, Bureau of Plan t Industry. It is expl!Cted that t.his innovation will b\'i~g about efficiency and progress in the industr y. 路W ith the populal'izati(ln of the use of the improved loom the ir.dustry will unc!oubte<lly have a brighter outlook. Of lale, thanks to the promotional efforts of governmental agencies, especially the instl'umentalities under the Department of Agriculture and Commerce, as well as the National Economic Protectionism Association, the trade in native textile<: has moved for ward. Filipino women have become patrons of locnlly made fa brics, particularly the "Cambnya" or "Pntadiong", wh ich is popularly known as "Ncpa" dress. What was formerly a garment of the rural class has taken the fancy of the nliddlcclass and even the social elites. The demand for such dress material rose to unprecedented proportion, so much so that the Japanese saw an opportunity to cash in on the increased demand. The Jap!\ne~e-imitlltion "cambaya" or "Patadiong" is at the present time being foisted on t he public. NEED FO R TEXT ILE l\l IL LS

The inroad of Japanese textiles into a newly created market for home-made "Nepa" cloth is but -1/1/ TnO"DIO .\flLL.,...... ('~"'''''Tt.

CA;./.

P.utQTcA S~cIiQ~.

B"rt"" Q/

one proof of the competitive advantage of machin'emade goods over handicraft articles. In view of the importance of mass production in cloth manufacture, the possib:lit.y of erecting modern textile mills in the Philippines has been a subject of eltensive investigation by technical men of the DelJal'tment of AgricultUre and Commerce. Again, one of the major plans of t.he NatioflUl Development Company is the promotion of the cot.ton industry. Estimates have been made for a mill that would supply even only a small share of the COUI1tl路y's consumption of cotton goods. Regarding the prospects of building textile factories in this count r y, the following facts and figures are given by D~路. Vicente Aldaba: It is estimated that for a m,odern outfit including weaving and finishing equipment a nd buildings al.1d power necessary, the cost pel' SIJindle is around P180.00. It is estimated also that to manufacture all cotton goods that we are at present importing, there will be required almost 400,000 spindles. To raise the cotton necessary, around 200,000 hectares should be cultivated To train th~ necessary operatives to run these mills will require many years. It is thus seen that the organization and operation of modern textile mills entail big outlay and that, for this reason alone, this countl'y cannot for some time be in a position to manufacture its needs of the finer grades of cotton cloth. At present there is one mill turning out coarse cotton goods. The factory has some 323 looms nnd 8,000 spindles. The maximum capacity of the plant is reported to be 10,000 yards daily, but actually t.he nvern~e daily

TIlE COMMERCIAL

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lNDOSTRIAL MANUAL

out'Hlt is 4,800 yards, 01' an equivalent of around 1,500,000 yards annually. It manufactures abou~

three dozen kinds of cotton cloth, including suitings, shirtings, grey cloth, etc. It produces also a fine fabric called "San Antonio", patadiong and other kinds of cloth for women's usc. To supply the domestic demand for coarse cotton textiles, it is said five mills of the size of the Madrigal cotton mill arc needed. DEVELOP~IENT O~'

HOU SEJ-IO:,O INDUSTRIES

The industry may witness ,lI>preciable, expan-

sion before long, given the uttellt.ioll, encouragement and protection called for by its manifold J>l'obl~ms. But it wonld not be too pessimistic to forecast that, owing to the incvi$able sctba~ks, some of the prospective cloth mills ml.ly not survive the experimentr.i stage. H!!nce the wise course to follow, during the interim in which our 'l:lscent textile factories are undergoing trial, would be not to neglect but rather to l'edouble our efforts to, develop on a truly commercial scale OUI' existing- household industries, With propel' stimulation u\d guidance our home

CoTTON GIN-BUREAU

w('avers couid supply n not inconsiderable portion of ow' conSUmption of cotton goods. It has a lready been demonstl'ated that production of the cottage textile industl'Y could be improved through the use of the more efficient BUl'eau of Plant I ndush1' loom. Furthel' researches may yet lead to more and more betterment in the home weaving industry. DIST I NCTIVE PHiLIPPINL CLOTH

Aside from cotton cloth, there are textiles .... f exclusive Philippine manufacture-sinamay, piii.a and JUSt. 'I'he materials USed in the weaving of local fabrics arc abacn, pinn ( I)incapplc fibe r ), cotton, silk and certain other fibers. Cotton and silk are at present largely imported although these fibers were at one time produced extensively here. Sinamay is a gauzy fabric made from the fibers of the abaca plant. Several grades of the fiber al':;! produced, the coarsest being used in the weaving of "buckram" (for stiffening the lower edges of skirts) I mosquito nets and fish nets, and the finer ones, of the sinamay dress. Weaving is still done by means of the old hand looms. Sinamay is used by

PLANT

lNtlU$T1I.Y

PHlLIPPINES the women for "camisa" (waist). Sometimes even the skirt is made of sinamay of the proper weave. "Camisa de chino" and "barong f ilipino" for me!l are also made from the finer grades of sinama~路. "Pinokpok" (beaten c1o~h), a soft, glossy fabric somewhat )'csembling Canton linen and made [I'om the sinamay fiber, hut differing fr om the sinamay cloth in fini sh, is used to some extent in making women's European dresses and men's suiting'S. Sinamay is produced in the Bieol l'egions, Iloilo, Cupiz,

Batangns. Cuvitc, RizaJ, Bohol and some other provinces. Negligible quantities of sinamay, mostly the coarsely woven, arc C!xpor ted to the United States, Germany, italy, Switzet'iand, H awa ii, Guam and other countries. T he exports totalled 17,893 square meters (113,334) in 1934 and 4,574 square meters (111,255) in 1935, The pifia fiber is woven into cloth eithel' exclusively or intermixed WI h OtJ;ICI' fibers, such as abaca, cotton or silk, The pure pifia cloth is a delicate, silky fabric, much used in making exquisite dresses, embroideries, handkerchiefs and other articles for women's weal', and car.isa and "bal'ong filipino" for men, Capiz and 110110 make the fines'.;

pifia cloths and export them not only to l\'lanila and other Philippine markets, but also to fOl'eign countries. Certain towns in the Bicol provinces, Bulacan, Rizal and a few other places also make pifia cloths but mostly of the mixcd kind, which is usually cheaper than the pure fabric. 'Ilhe United Stat(:;i and Hawaii buy small quantit.ies of Philippine pifia cloth. Shipments to these countries amounted to 157 squure meters, valued at 1'226, ih )934, and to 219 square meters, valued at P470, in 1935.

1'he so-called ,hsi fibers arc gummed fine threads silk. The silk yarns made into these threads I'Il'e impor ted from Chinn nnd Japnll'. Jusi Cloth is, generl'llly, woven not with fibers exclusively out with an intermixture of jusi and mercerized cOttOIl, piiia 01' othel路 f ine fibers, except in the ease of expensive jusi fabl'ics for which spun silk is used ill combination with jusi threads. Jusi is woven chiefly in Iloilo, Capiz, Bulacan, and Rizai. Jusi cloths arc known in the local markets by the name of the towll or locality from which they come, fol' the purpose of distinguishing them from one another. Thus, " Jloilo", "Hagonoy", "Ml'liabon", etc, are used to dc-

309

signate the particular kind of jusi coming from the respective towns, The "Hagonoy" and ":'Ilalabon" cloths are used for men's weal', whereas the " n oi,lo" jusi i~ more appropriate for women's garments, A small quantity of jusi is exported, mostly to thp. United States, ILOCANO COTTON CLOTH

Ilocano cloth is the name given to those cotton goods, including "cambuya", blankets, towels, table covez's, bathrobes, etc, woven in the !locos provinces and La Union, Compared with other native textiles, the llocano cloth is strong, durable and bulky, while the others are mostly fine, light and gauzy, Silk fabrics, such as handkerchiefs, shawl s, aprons for women, and even suiting!; for men, are also woven in the Ilocano provinces, Although, generall~' speaking they arc not produced in commercial quantities, the Iiocano cloths ure well-known in most parts of the country. Stores a re found in many localities, including i\lanila, where the "Abel Boco" (Tlocnno cloth) is sold. MORO CLOTH Cloth malting is not. confined to the Christian Filipinos. The Moros in Mindanao also mnllufact-

ure from imported yarns cotton and silk cloths for their own use. The Moro textiles diffel' from those produced by the Christians chiefly in the pattel路ns used, former being chamcterized by fanciful stripes, plaids, squares 01' motley figures. The Moros ma],,-e skirts, a p rons, headdresses, towels, curtains etc. and some embroidery. PRQMOTtONAL MEASURES NECESSARY

'raking into consideration the role played in our national economy by cotton and its manufactures, the impor tance of which is shown by the magnitude of our illlilortation o[ cotton :tems, which amount to over 1'30,000,000 in value annually, the improvement and expansion of the cloth making industry in the Philippines arc a national necessit~-. The govel'nmental program of research and expel路imentntion tending towllrd the attainment of this objective should be curried out more intensi"e!~. Protective ali well as promotional measures should be studied and extended to the industry.

THE COMMERCIAL & INDUSTRIAL MANUAL

)10

PHILIPPINE COTTON FACTS AND FIGURES' HE PHILIPPI NES is a great importer or cotton goods so that. the market for this crop i ~ assured provided that cotton factories are established here or fo reign markets created to absorb the nlw materials produced loca lly. Since the early Spanish time cotton has been grown in the Islands, especially in the Il oeos provinces, Batangas, a nd Cnvite. The production of cotton was limited to suppl y ing the dema n d of the native spinncl's and weavers for making into nalive cloth.

POSSIBILITIBS OF COTTON 1 NDUSTRY IN THE

Pn lLIPPI NES

The cotton indu stry of t he I slands has remained

show the importance of developing the cotton ind\lstl"Y in t his country,

With t he operation of the Bureau 's cotton mill the enthusiasm of the farmers was further increased . Thc primary object of th is mill is to prodUce places where they could be g r own, besides the Il ocos the necessary yarn to sup ply the needs of the native provinces and Batangas. With t he increasing imwenvel'S in Ilocos regions and Batangas worth apportation of cotton ~oods into th e I slands amounting Ilrox imately Pl,200,OOO every year and, secondarily to millions of pesoS'- every year and realizing the to produce crude "coco cloth" which is also in big possibilities fo r its commercial production, t he Bu- demand. \Vith the pI'oduction of enormous quantireau of Plant Indu stry \ tal'ted to wage a campaign ties of cotton seeds as a by-product in the cottonfor cotton growing on a oommercial scale. The sys- yarn and cotton-cloth manufacture, cottonseed oil, t ematic drive was begun in 1931, stal·ting with a another by-product, can be conver ted commer cially small area us ing the more desirable Batangas type, into vegetable lard by mixing with coconut oil, and increa s ing" the area cove,\ed year by year. Fourwhich is known as the "Mantecoco" in commere'.!. hundred-one hectares were planted in 1932-33, and T he cottonseed meal is thus produced which is a 430 hectares in 1933-34. F or the year 1934-1935, very valuable fertilizing material. there were 2.035 hectares planted as a result of the The estimated yield for 1934-35 was around intensive drive by the Bureau. This area is hoped 184,932.4 kilos of clea n cotton with seeds, or 61,644.2 to be increased en th\! sin !>m of the farmers as they gain better knowledge of the suitability of the crop kilos of lint. The progress so far a tta ined in the in their respective places and of the assurance of development of thi s industry ha s shown the practicability of growing this crop on a commercial scale mn l'ket for theil' products. in the I slands. It was amply demonstr ated and it is gratifying to note that this industry is now fairly PHILJ!'P J N~; I l\ JPOIiTATION OF COTTO N AND ITS well establi shed ill muny sections of the country. MAl"UFACT URES To encourage the fa nners in growing cotton, lon9. J' 51,9~1.m the Bureau of Plant Industr)' helps in locating }7,OlV08 1910 1l.017.!OO 191 1 markets for their produce and even in buying part 1911 }l.~l} .lH of their crop. This BUI'eau purchased from t h is 1911 1l. 167 .611 year's crop 39,447 kilos of clean cotton with seeds OUI" annual importation of "knitted cotton" worth P6,300 for the use of the spinning machine thread and t.wine d uring the years 1931, 1932, and established in the. Central Experiment Station, Ma1933 al'e a s follows: nila. This quantity is only one-half of the yearly consumption of said spinning machine. The PhilTwin. Y." Kni"«l to""" n.".J ippine Cotton Mills also purchased 44 ,733.62 kilos 19JI !'JO!I ,m rl.9Si,900 1'218.9-<7 1911 . IH,6o!O 1,782,161 185 .l}D of clean cotton with seeds worth P7,157.40. This 19l1 .. 6J~,}15 1,619.985 lll.OH quantity is only one_twentieth of its yearly consumpThe above statistics plainly and conclusively tion. The J:!panese firms in Manila purchased 10 tons of clean cotton with see.ds for shipment to J a pan for quality testing. It mig ht be stated in this • IJII 1I11•.\ItI ON S . S IL ., rAN. D ir~c!or of PI,,,,, Iud,."lrll. undeveloped on a ccount of the limited market for the PI'OdUCCl and t he insufficient knowledge of the

PHILIPPINES connection thaL representatives of the different Japanese firllls in the Philippines have, time and again, g:vcn verbal aSSUl uncI! to pUl'chase whatcvcl' sur-

plus quantity of cotton can be produced by the Philippine farmers, Japan, therefo r e, is to be reckoned with ns a great potential market for Philip-

pine cotton. The CI'OP from OUl' H134-1935 cotton production drive consisting of 7 1 tons miscc; in the Uoeos l'C' gians and part from Batangas was used locally by the natlvl' spinners and weavers. The yeady capacity of the spin ning machine owned by the Government and the Philippine Cotton Mills owned by Madrigal &. Co. is around 980 to ns (80 fol' the forme!' Ilnu 900 fol' the latter). Excluu;ng the cotton used by the nath'e weavers and spinners in the Boeo!; I'e~ion s and Batangas Province, to l'aise the )'cady consumption of 980 ton\. of ra w cotton fOI' the only two established mill s, \~ul d require to put into cultivation around 3,000 fl'tcta l'eS on the basis of 100 kilos of clean cotton with seeds pel' hectare, It. ill, therefore, s8'fe to antici~ate that the future crop from 3,000 hectares of the 1935路 1936 cotton prodUction drive directed by th~ HUI'eau of P lant indusll'Y would have a I'eady market. Any further

311

attempt to develop the cotton industry must be just路 ified by more or less steady demand of this product. So, in order to acccntuate the development of this industry, the Government or the private institutions concerned would have to absorb any further increase of locally raised cotton by the establishment of additional mills or to crcate foreign markets. The enthus iasm of t he farmers in cotton grow. ing has been further aroused by their desi re to diversify crop production which the s ugar limitation and other difficulties encountered in their farming work have forced on them. Cotton growing fits in properly into a system of crop rotation in many places. 'l'he Philippines wou ld need to plant around 209,316 hectares to produce around 41,863,343 kilos of lint to cover hel' yeady importation of cotton goods (raw and manufactured products), Limiting factors in the success 0" /ailltl'e of Philippilte Ol'own cotton.-The H134路 1935 cotton crop was adversely affected by the rec urrent typhoons in October , November, lind December, late planting, prolonged dl'ought in F ebruary and March, and eat'ly rains that destroyed thc late harvests. P t'evious experience has shown that the !;uccc:s"t

:.!

/ I

I TVro CA L STU! IIT SCBNII

J1I

THE COMMERCIAL & lNDUSTR1AL MANUAL

or failure of a cotton crop is determined by the Qccnrrcn'Cc of more or Jess uncontl'OlIable factors, such as typhoons. drought, floods, etc. Our past campaigns previous to the 1934-1935 cotton production drive had been remarkably successful, however, in view of the morc favorable conditions existing at the time. Comparative yield8, P. l. VB. U. S.-According to the U. S. Department of Agriculture Yearbook for J 935, the avel'llge yield per hectare (1930-1934 figurcs) is 45,1.24 Ibs. or 206.45 kilos of lint. In the Philippines one hectul'c yields from 400 to J ,000 kilos of clean cotton with seeds 01' from }33 to 333 kilos of lint. With the experience gained by our cotton planters ill g rowing this crop and under favorable soil and climatic conditions existing here, it is not pl·oblematical that the Philippines' yield per unit area can compare favorably with that of the United States. In Egypt, a hectaTe yields fil11und 439 kilos of lint. Cotton-UI·owi1!g ?·cgiolls.-The climate constitutes an important det.1;mining factor in selecting the most suitable regions for growing cotton and this matler has been giv serious consideration.

So, cotton growing is being developed only in the provinces having distinct wet and dry seasons. III order to determine suitable regions for cotton, trial plantings have been conducted by the Bureau of Plant Industry with 742 farmers in 178 municipal_ ities comprising 27 provinces. As a result of these trials the most su itable cotton regions, by reason o{ climate and soil adaptability, have been definitely dcterminl'd as follows: Batangas, Cavite, Cehu, lIocos Norte, 1Iocos SUI·, lloilo, Lanao, La Union, Orien_ tal Misamis, Occidental and Oriental Negros, and Pangasinan. Centl"Ul Luzon provinces, such as, Nueva Ecija, Pumpanga, Bulacnn und 'l'ariac, which enjoy distinct wet but prolonged dry periods are found to be not suitable for growing colton because of the prolonged drought which usually occurs dlll'ing the flowering and boiling periods. The bad effects produced by drought is the falling of flowers and bolls and the stunting of the plants. A cottOl) region to be suitable must have, besides distinct wet and dry periods, a humid atmosphe):e dUring the flowering and ~olling periods.

u. S. LO ES COTTON TEXTILE TRADE* HfLIPPfNE IMPORTS [I·om America in 1936 continued to drop in sllite of quota agreement with JUllUllese manufacturers. Transhipments show advances. The Philippine market for cotton goods was again successfully invadcd by Japanese cotton textiles in 1936, imports ,,( which amounted to 48,669,638 squar3 meters, while imports from the United States conti nued to fall to a total of 27,583,336 square meters from 35,250,190 square meters i!1 1935, according to figures obtained at th z office of the American Trade Commissioner. 'l'hese figures do not include tmnshillments of Jap!mese textiles made at Hongkong and imports from China, where nmjol'ity of the cotton mills are ownerj by Japanese, all totaling 11,366,606 square meters.

WHILE THE TOTAL JAPANESE IMPORTS of cotton textiles showed a slight drop from the United State~ continued to decline in spite of the fact that the Japanese quota agreement was in effect thl·oughout the year. The agreement stipulates that "Philippine impol'ts of Japanese-made cotton piecegoods" be limited to 45,000,000 ~qua re meters in each of the two years of the quot..1. agreement beginning August I, 1935, with a ten per cent margin for antipation or catTy-over and a limit of 26,000,000 square meters in any half-year. Limitation of the transhipments made at Hong-

kong or other ports was found difficult, according to the office of the American Tl·ade Commissionel', as goods were imported into Hongkong by Chines~ merchants but later shipped to Chinese merchants in Manila. This resnlted in exceeding the quota limit of 45,000,000 square meters per year as provided for in the agreement. AlTivals during the first five months of the second quota-year already tot.."l.led 21,625,000 squ!!re meters. Efforts, howeve,·, were being made at the end of the year to control transhipments, with some promise of success, according to the office of the Amel·ican Trade Commissioner.

PHILIPPINES Imports of rayon from Japan nearly doubl.::cI durmg 1936 to 25,618,558 square metcrs from 13,路 G!l2,338 square meters in 1935, This increase was the n'sult of the success of .lupa nese rayon munllfadul'ers in making available fabrics which wcrc brij.:'hl and attl'Uctivl!, but pel'haps not very sub路 stantial, at prices considerably lower than those at which American cotton goods could be offered, The principal gainel's from the quota agreement signed betwecn< the United States and Ja]Jun which is designed to benefit American textile manufacturers are the Hongkong and Chinese cotton industry and the Japanese. rayon i:1dustry, It seems probable that as long as the pUl'chasing power of the Fili pinos is being impuil'ed by I'CStriCtions of theil' export; crops to t he Url'itcd States, and as long as the J apanese cotton goods can be oIt:ered Ht much lower prices than American cotton manu factures, the local market for text!les will continue to be <lominated by Japanes(.. cotton industry, It perhaps is, not s\lrprising ~ see the Philippine market being successfully invaded by Japanesc cotton goods, but it is surprising to sec that the American textile manufacturers themselves are being threatened in theil' own home marK~t by the inllux of Ch20p Japanese cotton goods into the United States,

cot~n

th~

The invasion of cheap textiles in Am<:riCl1.n market by Japan, wfiich undersell the hig!ler lJriced but better quality American textiles, has pl'ompted leaders in the American cotton indllstl'Y to send a mission to J apan in January this yetLl' to negotiate an agreement ,,{hereby importa, tioll$ of chcap Japanese textiles woufd be prevented 01' at least be kept in the minimum so as not to l'ompetc \\-ith cotton textile industry in the Unit..~rl Stult's, As u result, an understanding was reache,j in O~alm between the American mission, headed hy iir, C!lludius T, Murchison, president of the United. States Cotton Textile Institute, and the Japan<cse textile manufacturers under which the Japanes~ agreed to export to United Stales only 155,000,000 yards of cotton goods in 1937, One impol'tant point included in the quota agrecment between the Japanese and American cotton industrialists is that Japanese textiles t'L'an!Ohipped to the United States through some other cOllntl'y will count agaillst the Japanese quota, It was apparent that the American cotton textile manu fact-Tr ibune, ;>'[lIreh 17th, 1937,

313

urers have become wise to the sad expedences in the transhipments of Japanese cotton piece-goods made through Hongkong and other ports to the Philippines, The attempts of the United States to restrict exports of cheap Japanese cotton textiles to tho American and Philippine markets will perhaps force the Japanese to develop bdependent SOUl'ces of raw cotton outside of the United States from where they now get gl'eater part of their supply for their mills, The Japanese are tile best customers of the United States for raw cotton, III 193.1, Amelican cotton fal'mel's sold around 1,845,000 bales to Japane!O" cotton mills, topping England's purchases of 1,278" 000 bales, The J apanese Army has made many attempts to make North China plant more cotton with a view to supplying Japanes~ cotton mills, Japan is also making efforts to purchase more cotton hom Brazil in the hope of tempting Brazilians to buy more cheap Japar.'ese goods in return, The Japanese can be said to be partly responsible for the cultivation of more cotton in Brazil. Japanese colonists being congreg,ted in Sao Paulo region where most of the Brazilia r American-type cotton is planted, The propaganda being spread by Japanese consular of(icials here, began by that wide-spoken A, Kimura, and other Japanese business men who have visited the Islands, by inducing the Filipinos to convel't their rice and sugar lands into cotton farms to supply the Japanese cotton mills is too wellknown to repeat here, It is a part of Japan's policy to develop sources fol' raw cotton outside of the United States,

TWO IMPORTANT I NDUSTRIES PRDr'iIDTED '" THE PLAN will be effccted soon w ith the fol'mation of the Food Products Corporation and the Cotton YMn Spinning Corporation, The stockholders heard the report of the board of directors on the activities of the entol'prise lnst year, such as the surveys, experiments and studies of different industries and on the est.'Iblishments of merchant marine, The slc;ckholde1's decided to leave for further study tilt' merchant marine question, a proposed electdc railway system in Mindanao, the survey of coal deposits in the Philippines, and the establishment of an iron industry,