Philippine Progress Prior to 1898 Part 2

Restrictions.

The continued protests of the Spanish merchants finally led to the prohibition of the shipment from New Spain to Peru or Tierra-Firme of Chinese cloths brought from the Philippines. [103] "And in order that what was prohibited in one way might not be obtained in another, decrees were despatched on February 6 and December 18, 1591, ordering the total cessation of commerce between the islands and Peru. That was later extended to Tierra-Firme and Guatimala, by decrees of January 12, 1593, and July 5, 1595, forbidding the trade of China and its merchandise to all the Indias, except to Nueva Espana, which was left open to the Philippines." [104] In 1593 a decree absolutely limited the trade between Mexico and the Philippines to 250,000 pesos annually for the exports to Mexico, and to 500,000 pesos for the imports from Mexico, [105] to be carried in two ships not to exceed three hundred tons burden. [106] It was also decreed that "no person trade or traffic in the kingdom or in any part of China, and that no goods be shipped from that kingdom to the Philippine Islands, on the account of the merchants of those islands. The Chinese themselves shall convey their goods at their own account and risk, and sell them there by wholesale." [107] Further, it was ordered that "the Chinese merchandise and articles which have been and shall be shipped from Filipinas to Nueva Espana, can and shall be consumed there only, or shipped to these kingdoms after paying the duties. They can not be taken to Peru, Tierra-Firme, or any other part of the Indias, under penalty of confiscation...." [108]

"Fortunately," says Azcarraga, [109] "that tyrannical provision, meeting with the opposition of the private interests, which it so greatly injured, and among which were included those of the authorities and officials who were called upon to enforce it--was prevented from being carried in force, and thus, in reality, the Acapulco trade continued unlimited until the year 1604, when, by another decree the enforcement of previous laws was ordered." [110]

However, evasion of the law was a common practice, and the galleons usually carried very much more cargo than was allowed. The abuses became so apparent that in 1635, at the instigation of the merchants of Cadiz and Seville, a special commissioner was sent to Manila, [111]

who strictly enforced the law. And, in order to prevent all evasions of the law, it was decreed in 1636 to the viceroys of Peru and New Spain "to prohibit and suppress, without fail, this commerce and trade between both kingdoms, by all the ways and means possible." [112]

The rest of the seventeenth century found Manila still engaged in a great commercial controversy with the merchants of Spain; the endless number of pet.i.tions sent from the Philippines to the king bears ample testimony to the magnitude of the problem. [113]

Further pet.i.tion from Manila resulted in the decreeing in 1702 that in the Philippine Islands two ships should be built, each of 500 toneladas burden, which should transport the goods permitted to that trade; that the citizens should be authorized to convey in these to Nueva Espana the amount of 300,000 pesos in their products and other commodities, and on the return to the Philippines to carry 600,000 pesos in silver, allowing 100 per cent gain minus the duties and expenses. [114] It was further provided in the decree that in the enumeration of the traders should be included the Spaniards in the country, and the military men stationed in the port of Cavite, excluding, however, ecclessiatical ministers, whether secular or regular, and foreigners. [115] And he who had no goods to lade was not allowed to give up his right in favor of a third person, but a new distribution was made. [116]

Induced by protests by Cadiz and Seville based on the ground that the galleons carried more cargo than allowed, and that the great abundance of silk in America had caused the decrease of the textile industry, thus causing the decline of factories in Toledo, Valencia, Seville, and Granada, a royal decree of January 8, 1718, prohibited the carrying in the galleon of silk, woven or raw, from China. [117] The only trade which could be carried on was in linen goods, porcelain, wax, cinnamon, cloves, and other goods which were not brought from Spain. [118]

More pet.i.tions came from Manila, and, finally, a royal decree of June 17, 1724, repealed that of 1720, and allowed once more the importation of Chinese silk. [119] An attempt on the part of the Viceroy of Mexico to put a stop to the importation of Chinese silk resulted in the royal decree of April 8, 1734, which, besides allowing trade in silk, increased the amount of the trade permitted to Manila to 500,000 pesos of investment and 1,000,000 of returns. [120]

The galleon trade continued during the rest of the eighteenth century, until 1811 when the last galleon sailed from Manila, and 1815, when the final return voyage was made. The next period in the history of Philippine commerce is characterized by the opening of the country to foreign influence.

Before, however, going into the next period let us see who were ent.i.tled to partic.i.p.ate in the galleon trade. The right to ship was known as boleta or ticket, and there were as many boletas as divisions in the ship. On the average there were 1,500 such divisions, each worth from 200 to 225 pesos, a good portion of which were given to the governor-general, the religious corporations, the regidores, the favorites and privileged, and the widows of retired Spaniards. Those who had no capital to invest in merchandise sold their boletas to the merchants, and in spite of prohibition, this practice continued with impunity. The cargo consisted chiefly of Chinese and Indian silk and cotton cloths, and gold ornaments, and were sold at one hundred per cent profit in New Spain. [121] Almost all the merchants secured loans from the "Obras Pias," [122] which were funds donated for pious purposes, and two-thirds of which loaned at the following rate of interest: for Acapulco, fifty per cent; for China, twenty-five per cent; for India, thirty-five per cent; the rest of the funds formed the reserve. Besides the merchandise and silver the galleons transported the official correspondence, arms, troops, missionaries, and public officials. The officers of the galleon were highly paid. The commander, who had the t.i.tle of general, made 40,000 pesos per voyage, the pilot about 20,000, [123] and the mates, 9,000 each. Most of the crew were natives. [124]

Effects of the galleon trade

What were the effects of the Manila-Acapulco trade upon the economic growth of the Philippines? There are two answers to this question. On the one hand, those who believe that the policy of restriction was necessary in order to protect the industries of Spain, of course, say that such policy was beneficial. Furthermore, it is alleged that no other economic activity could have been possible during the early part of Spanish domination because, at the time, there were no products of the country which would serve as the basis of a rich and flourishing commerce; there was no capital sufficient to exploit the natural resources of the Philippines. And to show that Manila was benefited by acting as a distributing point of Oriental goods, the prosperity of Singapore and Hongkong is cited; what prosperity would these cities enjoy if it were not for the fact that they act as entrepots of the East? [125] The very retention of the Philippines depended upon its ability to support itself in part, and the profits from the trade as a whole made that possible.

On the other hand, the galleon trade absorbed too much of the attention of the Spaniards, [126] and caused the neglect of Philippine extractive industries, especially agriculture. [127] It attracted the Spaniards into Manila, and, thus, left the rest of the country without the benefit of whatever good they could have done; and in Cebu, the point was reached when, at one time, there was not a sufficient number of persons to fill the offices of alcalde and regidores, and it was necessary to a.s.sign to the city a few boletas from Manila. [128]

Lastly, it enriched only the few, [129] and the resulting economic depression checked the growth of population. [130]

Not everything, however, is to be attributed to the influence of the galleon trade; a good deal of the neglect of the country's natural resources was due to Spanish dislike of industrial activity. Azcarraga explains that characteristic by saying that the eight centuries of continuous struggle to drive out the Moors from Spain created a chivalrous spirit and a love of risky undertakings; the discovery of the New World furnished a wide sphere of action to that adventurous spirit, and the resulting emigration to the newly discovered lands depopulated the Peninsula to such an extent that labor could be had neither for the factories nor for agriculture. "The current of precious metals flowing into Spain from the mines of Mexico and Peru fascinated the Spaniards; created easy-going and indolent habits; held them off the mechanical arts, formerly called servile, and all desired to gird the word and enjoy the spoils of conquest." [131]

This was the real cause of the decadence of Spanish industries, and not, as alleged by the monopolists of Spain, the compet.i.tion of the Manila-Acapulco trade. With such causes operating to check development, it is no wonder that Philippine industries were in a primitive state down to the last years of Spanish domination.

V. THE NINETEENTH CENTURY AND ECONOMIC DEVELOPMENT

Towards the close of the eighteenth century there were events which indicated the coming of greater liberty. Direct communication was established in 1765 between Manila and Spain by means of a warship which was to sail annually from Cadiz, with European goods, and to come back loaded, not only with the products of the Philippines, but also with Oriental merchandise, including goods from China and j.a.pan. However, the innovation was not well received in Manila, due perhaps to the monopolistic habit of the merchants, and, in 1783, these annual voyages were discontinued. [132]

The coming of Governor Jose de Basco y Vargas marked a new era in the economic history of the country, for two important events happened during his term: the establishment of the Sociedad Economica de Amigos del Pais, in 1781, and of the Real Compania de Filipinas, in 1785. These may be considered to be the most serious attempts of Spain throughout her rule, to develop the natural resources of the Philippines.

The Sociedad Economica de Amigos del Pais.

Basco's idea was to make the Philippines economically self-sufficing, and not dependent on Mexico. For this reason, he encouraged the development of agriculture by offering prizes to those who would excel in the cultivation of cotton, spices, sugar and silk; those who would open up the various kinds of mines; those who invented useful things, and those who excelled in the arts and sciences. Likewise, he issued circulars and pamphlets explaining the method of cultivating the different Philippine crops. In order to get the community's co-operation in carrying out his economic plan, he induced the King to issue a decree establishing the Economic Society. In spite of serious opposition on the part of many, the society was auspiciously inaugurated in 1782. It seemed, however, as if Basco's ideas were too advanced for his time, for the society led a declining life up to 1822. A memoir published by the Society [133], and containing a list of its achievements, shows its activity to have consisted of discussions of economic subjects; the publication of pamphlets dealing with the cultivation of coffee, sugar, indigo, silk, gutta-percha, hemp, cacao, and other plants; the offering of prizes to persons who succeeded in weaving cloths, making dyes, inventing hemp-stripping machines, and contributing other useful things to agriculture; and the introduction of agricultural implements of various kinds from the United States. The Society lived for over a century, till 1890. Another means resorted to by Basco to free the Philippines from its dependence on Mexico was the establishment of the tobacco monopoly by the government. This proved to be a good source of revenue, and, at the same time, was instrumental in bringing into cultivation large tracts of land. However, the evils attending it were many; the abuses of the government officials in enforcing the regulations, and in trying to make profits for themselves; the lack of incentive on the part of the producer to improve the quality of his tobacco; the existence of smuggling and bribery, and the poverty of the farmer; all these were attributed to the tobacco monopoly. [134]

The Royal Company.

The second important event during Basco's rule was the establishment of the "Real Compania de Filipinas" by royal decrece of March 10, 1785. The capital of the company was fixed at eight million pesos divided into 32,000 shares of two hundred and fifty pesos each; the king bought four thousand shares, and the citizens of Manila were allowed three thousand. The chief object of the company was to establish commercial relations among the different colonies, and also between the colonies and Spain; to supply Manila with the products of Europe, and, in return, to carry to Spain not only the products of the Philippines, but also the merchandise coming from the Oriental countries. The second important object was the encouragement of Philippine agriculture, as shown in section four of the charter, which required the company to invest four per cent. of its net profits in some extractive industries, chiefly agriculture. In order to help the company, all the laws and decrees which prohibited the importation of Oriental cloths into Spain, were repealed, and the products of the Philippines were exempted from all kinds of duties both in Manila and in Spain. Furthermore, the merchants of Manila were allowed to go to the Asiatic ports for trade, and the Chinese who came to Manila were allowed to trade freely without subjecting themselves to any restrictions. However, the old Manila-Acapulco trade was not to be disturbed, for the company could not send ships to Acapulco.

The company encouraged the production of silk, [135] indigo, [136] sugar, [137] cotton, [138] and especially of pepper and other spices. For this purpose it bought lands, established posts in Ilocos, Bataan, Cavite, and Camarines, and offered prizes. It also gave stimulus to manufacturing by establishing textile factories.

In spite of the special protection and privileges granted to the company, it declined from year to year. In 1805 it was rechartered, and given fifteen years of life and the same privileges as before; its capital was fixed at twelve and a half million pesos divided into shares of two hundred and fifty pesos each; foreigners were allowed to own shares; and the ships were allowed to sail directly from the Asiatic ports without stopping at Manila; and finally the three-year privilege, [139] allowed to foreigners at the request of the company in 1789, of importing into Manila Asiatic goods, and exporting the products of the country, was made perpetual. In 1830 its privileges were revoked, and Manila was left open to foreign commerce and navigation.

What were the causes that led to the ill success of the Royal Company? Among the minor causes mentioned was the indifference of the residents of the Philippines; for, as Zuniga says, [140]

"taught to gain in New Spain what is necessary for their comfort, without any more work than sending a memorial once every year, it is hard for them to engage in a commerce which is servile and vexatious; and, accustomed to exorbitant profits, they cannot adapt themselves to the gradual profits in a store; * * *. Furthermore, the company neglected to import the goods from Europe, such as wines and groceries, which the foreign ships brought at great profit."

It also failed to establish direct trade relations with China and India, but depended solely on buying the goods which were brought there by the Chinese and other foreign traders; hence, it had to pay higher prices for the Oriental goods it sent to Europe. The company, too, overestimated the importance of certain Philippine products, especially spices, which were produced much more cheaply in Sumatra and Java. Though allowed to invest only four per cent of its net profits in agriculture during the first years of its existence, it invested great sums in buying lands, made advances to the producers; in other words, it engaged in much speculation, which proved disastrous. It also gave premature attention to the development of manufacturing. The chief cause, however, of the failure of the company was the fact that it was not given control of the Manila-Acapulco trade, which continued to absorb the attention of the very men, who, because of experience in the country, would have helped the Company during its formative years. [141]

According to Dr. Tavera, the Royal Company introduced capital, which was essential for economic development. [142]

The opening of the ports.

Even before the coming of Basco, the taking of Manila by the English in 1762 had a good economic effect, for it acquainted England with the natural resources of the Philippines, and the possibilities for material development. [143] Perhaps as a result of the information thus gained, we find an English commercial house obtaining permission to establish itself in Manila in 1809. And in 1814, probably due to the liberalizing influence of the war of independence just closed in Spain, it was stipulated that all colonial ports still restricted should be opened to foreign traffic, and that foreigners should be allowed to enter, and engage in commercial activities; thus was swept away the restrictive colonial policy, which had prevailed among the European nations, and which Spain was the very last to abandon. In the beginning, however, there was need of special royal permission for each foreign house established. Later on the permission of the Governor General only sufficed. [144] An earlier edict of the Philippine government, repeated in 1828 and again in 1840, forbade foreigners to sell at retail or to enter the provinces to carry on business of any kind. [145] In 1842 there were in Manila thirty-nine Spanish shipping and commercial houses, and about a dozen foreign houses, of which seven or eight were English, two were Americans, one was French, and another Danish, while consuls of France, the United States, Denmark, Sweden, and Belgium resided there. [146] By about 1859, according to Bowring, there were in Manila seven English, three American, two French, two Swiss, and one German commercial establishments; and in the other ports, there was no European business house, except one in Iloilo, where there was an English firm of which the British vice-consul was the directing partner. [147]

Once Manila was opened, the advocates of greater freedom did not rest content with only one free port, because there were great difficulties in connection with the exportation of products from the places far from Manila. The products of the Ilocano provinces, southern Luzon, and the Visayas, and even Mindanao, had all to be taken to Manila, and from there, exported. Thus, the system entailed unnecessary risks, waste of time, and extra expense. [148] Accordingly, at the request of the government of the Philippines, Royal Order of September 29, 1855, approved the opening of the ports of Sual (Pangasinan), Iloilo, and Zamboanga. And lastly, by Royal Decree of July 30, 1860, Cebu, which up to that time was obliged to send her products for exportation either to Manila or Iloilo, was opened.

Effects of the opening of the ports.

Taking the increase of exports as an indication of greater agricultural and commercial activity, we find that, with the opening of the ports, exports increased; and these now consisted of the products of the country, instead of manufactured goods brought from elsewhere in the Orient. [149] By 1839, the Philippines exported 2,674,220 pesos of her own products, as against 500,000 pesos in 1810. [150] Sugar in 1782, was the only product which was attracting any attention, because at the time, thirty-thousand piculs of it had been exported; in 1840, 146,661 piculs were exported; in 1854 the amount had increased to 566,371, almost four times greater than in 1840; and in 1857 the amount reached 714,059 piculs. [151] Similarly, the amount of hemp exported increased, in spite of the fact that it found its way in the world's market for the first time only in the early part of the nineteenth century. [152]

The same effect that was observed in connection with the opening of Manila followed that of the other ports. The production of the regions around the new ports increased as shown by export statistics, and commercial activity was stimulated, as shown in the greater movement of ships. For example, Sual in 1857 sent abroad twelve ships with rice, and two hundred and twenty-five ships to Manila, also loaded with rice; in 1860, sixty ships went abroad, and one hundred and seventy-two to Manila, loaded mostly with the same cargo. Again, although in the first three or four years there were no marked increase in her exports, Iloilo by 1859 began to show signs of increasing productivity. [153]

Its total value of exports, which in 1858 amounted to 82,000 pesos, had increased to 1,000,000 pesos in 1863.

Furthermore, the opening of Iloilo encouraged production in the island of Negros. Previous to the new era the conditions there were described thus: "... before the happy event that we are considering, that island was uncultivated, thinly populated, and above all, without any kind of production to keep commerce alive; besides the Governor, the Alcalde mayor, and the curates sent by the religious orders, there were no other Spaniards; only one European, a French doctor by the name of Gaston, had settled there, cultivating sugar cane, and now and then sending some cargoes to Manila. [154] Again, Jagor tells us that in 1857 there was not one iron mill to be found on the island; and that in working with the wooden mill, about 30% of the sap remained in the cane, even after it had been thrice pa.s.sed through. However, the old wooden presses were disappearing, and were being supplanted by iron mills run by steam or carabao. These mills the natives had no difficulty in obtaining because they could get them on credit from the warehouses of the English importers. Instead of the old Chinese cast-iron pans which were in use, far superior articles had been imported from Europe; and many large factories worked by steam power and with all modern improvements had been established. In agriculture, likewise, great progress was noticeable. Improved plows, carts, and good farming implements generally were to be had in plenty. [155]

After the opening, the 4,000 piculs of sugar produced in Negros in 1856 had increased to 100,000 in 1864 for exportation; there were 25 Europeans in the same year, 7 machines run by steam in the towns of Bacolod, Minuluan, and Bago, and 45 run by animal power. Similar advance characterized the other parts of the islands. [156]

The increased production, due to the improved methods of cultivation, had a great effect on the inhabitants of the islands, for, not only did it bring about greater welfare because of more adequate satisfaction of their necessities, but also because it developed a demand for other necessities; hence, raising the standard of living. Referring to the same phenomenon in Iloilo Mr. Loney in a report as vice-consul of Great Britain, said that the current testimony of all the elder residents in the province was that during the last few years a very marked change had taken place in the dress and general exterior appearance of the inhabitants of the large pueblos, owing in great measure to the comparative facility with which they obtained articles which were formerly either not imported, or the price of which placed them beyond their reach. In the interior of the houses the same change was observable in the furniture and other arrangements, and the evident wish to add ornamental to the more necessary articles of household use. [157]

And since the opening of the ports, a great many people, especially mestizos, who before traded in manufactured goods purchased in Manila, abandoned their business, and, unable to compete with the Chinese dealers, had betaken themselves to the raising of sugar, and other products to the great benefit of the country. [158] And, thus, the greater exploitation of natural resources gave rise to the demand for better means of communication, [159] and other material improvements.

The material progress of the Filipinos wrought great changes in the social population, mind, and structure. Though not affecting the majority of the people, economic advance paved the way for the development of the spirit of independence and criticism, which characterizes an independent and stable middle cla.s.s. It was that cla.s.s, which, because of contact with the new ideas brought by the newcomers, and of increasing material power, first questioned the abuses of the government, and demanded social reforms. [160]

Furthermore, the law that all the energy in the growth and activity of a population is derived from the physical world, and hence, density of population is dependent on material progress, is well ill.u.s.trated by the increase of population in this country during the last century, especially its first half. [161] In turn, density of population made possible further social progress. [162]