The Philippine Islands Part 60

of the pa.s.senger. If the vessel safely arrives in port, say Manila, she will be boarded by a numerous staff of Customs' officials. In the meantime the pa.s.senger will have been supplied with declaration-forms and a printed notice, stating that an "Act provides a fine of not exceeding $2,000 or imprisonment at hard labour, for not more than five years, or both, for offering a gratuity to an officer of the Customs in consideration of any illegal act in connexion with the examination of baggage." The baggage-declaration must be ready for the officers, and, at intervals during an hour and a half, he (or she) has to sign six different declarations as to whether he (or she) brings fire-arms. The baggage is then taken to the Custom-house in a steam-launch for examination, which is not unduly rigid. Under a Philippine Commission Act, dated October 15, 1901, the Collector of Customs, or his deputy, may, at his will, also require the pa.s.senger to take an oath of allegiance in such terms that, in the event of war between the pa.s.senger's country and America, he who takes the oath would necessarily have to forfeit his claim for protection from his own country, unless he violated that oath. No foreigner is permitted to land if he comes "under a contract expressed, or implied, to perform labour in the Philippine Islands." In 1903 this prohibition to foreigners was disputed by a British bank-clerk who arrived in Manila for a foreign bank. The case was carried to court, with the result that the prohibition was maintained in principle, although the foreigner in question was permitted to remain in the Islands as an act of grace. But in February, 1905, a singular case occurred, exactly the reverse of the one just mentioned. A young Englishman who had been brought out to Manila on a four years'

agreement, after four or five months of irregular conduct towards the firm employing him, presented himself to the Collector of Customs (as Immigration Agent), informed against himself, and begged to be deported from the Colony. The incentive for this strange proceeding was to secure the informer's reward of $1,000. It was probably the first case in Philippine history of a person voluntarily seeking compulsory expulsion from the Islands. The Government, acting on the information, shipped him off to Hong-Kong, the nearest British port, in the following month, with a through pa.s.sage to Europe.

Since the American advent the _Administration of Justice_ has been greatly accelerated, and Munic.i.p.al Court cases, which in Spanish times would have caused more worry to the parties than they were worth, or, for the same reason, would have been settled out of court violently, are now despatched at the same speed as in the London Police Courts. On the other hand, quick despatch rather feeds the native's innate love for litigation, so that an agglomeration of lawsuits is still one of the Government's undesirable but inevitable burdens. There is a complaint that the fines imposed in petty cases are excessive, and attention was drawn to this by the Munic.i.p.ality of Manila. [291] After stating that the fines imposed on 2,185 persons averaged $5 per capita, and that they had to go to prison for non-payment, the Munic.i.p.ality adds: "It shows an excessive rigour on the part of the judges in the imposition of fines, a rigour which ought to be modified, inasmuch as the majority of the persons accused before the Court are extremely poor and ignorant of the ordinances and the laws for the violation of which they are so severely punished." Sentences of imprisonment and fines for high crimes are justly severe. During the governorship of Mr. W. H. Taft, 17 American provincial treasurers were each condemned to 25 years' imprisonment for embezzlement of public funds. In February, 1905, an army major, found guilty of misappropriation of public moneys, had his sentence computed at 60 years, which term the court reduced to 40 years' hard labour. The penalties imposed on some rioters at Vigan in April, 1904, were death for two, 40 years'

imprisonment and $10,000 fine each for twelve, 30 years' imprisonment for thirty-one, and 10 years' imprisonment for twenty-five.

The American law commonly spoken of in the Philippines as the "Law of Divorce" is nothing more than judicial separation in its local application, as it does not annul the marriage and the parties cannot marry again as a consequence of the action. The same could be obtained under the Spanish law called the _Siete Partidas_, with the only difference that before the _decree nisi_ was made absolute the parties might have had to wait for years, and even appeal to Home.

On May 26,1900, the Military Governor authorized the solemnization of marriages by any judge of a court inferior to the Supreme Court, a justice of the peace, or a minister of any denomination. For the first time in the history of the Islands, _habeas corpus_ proceedings were heard before the Supreme Court on May 19, 1900. Besides the lower courts established in many provincial centres, sessions are held in circuit, each usually comprising two or three provinces. The provinces are grouped into 16 judicial districts, in each of which there is a Court of First Instance; and there is, moreover, one additional "Court of First Instance at large." The Chief Justice of the Supreme Court, some of his a.s.sistant judges, several provincial judges, the Attorney-General, and many other high legal functionaries, are Filipinos. The provincial justices of the peace are also natives, and necessarily so because their office requires an intimate knowledge of native character and dialect. Their reward is the local prestige which they enjoy and the litigants' fees, and happily their services are not in daily request. At times the findings of these local luminaries are somewhat quaint, and have to be overruled by the more enlightened judicial authorities in the superior courts. Manila and all the judicial centres are amply supplied with American lawyers who have come to establish themselves in the Islands, where the custom obtains for professional men to advertise in the daily newspapers. So far there has been only one American lady lawyer, who, in 1904, held the position of a.s.sistant-Attorney in the Attorney-General's office.

CHAPTER x.x.xI

Trade and Agriculture Since the American Advent

During the year 1898 there were those who enriched themselves enormously as a consequence of the American advent, but the staple trade of the Colony was generally disrupted by the abnormal circ.u.mstances of the period; therefore it would serve no practical purpose to present the figures for that year for comparison with the results obtained in the years following that of the Treaty of Paris.

The tables at the end of this chapter show the increase or decrease in the various branches of export and import trade. Regarded as a whole, the volume of business has increased since the American occupation--to what extent will be apparent on reference to the table of "Total Import and Export Values" at p. 639. When the American army of occupation entered the Islands, and was subsequently increased to about 70,000 troops, occupying some 600 posts about the Archipelago, there came in their wake a number of enterprising business men, who established what were termed trading companies. Their transactions hardly affected the prosperity of the Colony one way or the other. For this cla.s.s of trader times were brisk; their dealings almost exclusively related to the supply of commodities to the temporary floating population of Americans, with such profitable results that, although many of them withdrew little by little when, at the close of the War of Independence, the troops were gradually reduced to some 16,000 men, occupying about 100 posts, others had acc.u.mulated sufficient capital to continue business in the more normal time which followed. Those were halcyon days for the old-established retailers as well as the new-comers; but, as Governor W. H. Taft pointed out in his report to the Civil Commission dated December 23, 1903, [292] "The natural hostility of the American business men, growing out of the war, was not neutralized by a desire and an effort to win the patronage and goodwill of the Filipinos. The American business men controlled much of the advertising in the American papers, and the newspapers naturally reflected the opinion of their advertisers and subscribers in the advocacy of most unconciliatory measures for the native Filipino, and in decrying all efforts of the Government to teach Filipinos how to govern by a.s.sociating the more intelligent of them in the Government.... The American business man in the Islands has really, up to this time, done very little to make or influence trade. He has kept close to the American patronage, and has not extended his efforts to an expansion of trade among the Filipinos.... There are a few Americans who have pursued a different policy with respect to the Filipinos to their profit."

Governor Taft's comments were only intended to impress upon the permanent American traders, for their own good, the necessity of creating a new _clientele_ which they had neglected. The war finished, the wave of temporarily abnormal prosperity gradually receded with the withdrawal of the troops in excess of requirements; the palmy days of the retailer had vanished, and all Manila began to complain of "depression" in trade. The true condition of the Colony became more apparent to them in their own slack time, and for want of reflection some began to attribute it to a want of foresight in the Insular Government. Industry is in its infancy in the Philippines, which is essentially an agricultural colony. The product of the soil is the backbone of its wealth. The true causes of the depression were not within the control of the Insular Government or of any ruling factor. Five years of warfare and its sequence--the bandit community--had devastated the provinces. The peaceful pursuits of the husbandman had been nearly everywhere interrupted thereby; his herds of buffaloes had been decimated in some places, in others annihilated; his apparatus or machinery and farm buildings were destroyed, now by the common exigencies of war, now by the wantonness of the armed factions. The remnant of the buffaloes was attacked by rinderpest, or _epizootia_, as the Filipino calls this disease, and in some provinces up to 90 per cent. were lost. Some of my old friends a.s.sured me that, due to these two causes, they had lost every head of cattle they once possessed. Laudable effort was immediately made by the Insular Government to remedy the evil, for so great was the mortality that many agricultural districts were poverty-stricken, thousands of acres lying fallow for want of beasts for tillage and transport. Washington responded to the appeal for help, and a measure was pa.s.sed establishing the Congressional Relief Fund, under which the sum of $3,000,000 was authorized to be expended to ameliorate the situation. By Philippine Commission Act No. 738, $100,000 of this fund were appropriated for preliminary expenses in the purchase of buffaloes. Under the supervision of the Insular Purchasing-Agent a contract was entered into with a Shanghai firm for the supply of 10,000 head of inoculated buffaloes to be delivered in Manila, at the rate of 500 per month, at the price of P85 per head. An agent was sent to Shanghai with powers to reject unsuitable beasts before inoculation, and the Government undertook to remunerate the contractors at the rate of P40 for every animal which succ.u.mbed to the operation. The loss on this process was so great that a new contract was entered into with the same firm to deliver in Manila temporarily immunized buffaloes at the rate of P79 per head. On their arrival the animals were inspected, and those apparently fit were herded on the Island of Masbate for further observation before disposing of them to the planters. The attempt was a failure. Rinderpest, or some other incomprehensible disease, affected and decimated the imported herds. From beginning to end the inevitable wastage was so considerable that up to November 20, 1903, only 1,805 buffaloes (costing P118,805) were purchased, out of which 1,370 were delivered alive, and of this number 429 died whilst under observation; therefore, whereas the price of the 1,805 averaged P65 per head, the cost exceeded P126 per head when distributed over the surviving 941, which were sold at less than cost price, although in private dealings buffaloes were fetching P125 to P250 per head (_vide_ Buffaloes p. 337, et seq.). Veterinary surgeons and inoculators were commissioned to visit the buffaloes privately owned in the planting-districts, the Government undertaking to indemnify the owners for loss arising from the compulsory inoculation; but this has not sufficed to stamp out the disease, which is still prevalent.

Another calamity, common in British India, but unknown in these Islands before the American advent, is _Surra_, a glandular disease affecting horses and ponies, which has made fatal ravages in the pony stock--to the extent, it is estimated, of 60 per cent. The pony which fully recovers from this disease is an exceptional animal. Again, the mortality among the field hands, as a consequence of the war, was supplemented by an outbreak of _Cholera morbus_ (_vide_ p. 197), a disease which recurs periodically in these Islands, and which was, on the occasion following the war, of unusually long duration. Together with these misfortunes, a visitation of myriads of locusts (_vide_ p. 341) and drought completed the devastation.

Consequent on the total loss of capital invested in live-stock, and the fear of rinderpest felt by the minority who have the wherewithal to replace their lost herds, there is an inclination among the agriculturists to raise those crops which need little or no animal labour. Hence sugar-cane and rice-paddy are being partially abandoned, whilst all who possess hemp or cocoanut plantations are directing their special attention to these branches of land-produce. Due to these circ.u.mstances, the increased cost of labour and living in the Islands since the American advent, the want of a duty-free entry for Philippine sugar into the United States, the prospective loss of the j.a.panese market, [293] the ever-acc.u.mulating capital indebtedness, and the need of costly machinery, it is possible to believe that sugar will, in time, cease to be one of the leading staple products of the Islands.

With regard to the duty levied in the United States on Philippine sugar imports, shippers in these Islands point out how little it would affect either the United States' revenue or the sugar trade if the duty were remitted in view of the extremely small proportion of Philippine sugar to the total consumption in America. For instance, taking the average of the five years 1899-1903, the proportion was .313 per cent., so that if in consequence of the remission of duty this Philippine industry were stimulated to the extent of being able to ship to America threefold, it would not amount to 1 per cent, of the total consumption in that country.

At the close of the 1903 sugar season the planters were more deeply in debt than at any previous period in their history. In 1904 the manager of an Yloilo firm (whom I have known from his boyhood) showed me statistics proving the deplorable financial position of the sugar-growers, and informed me that his firm had stopped further advances and closed down on twelve of the largest estates working on borrowed capital, because of the hopelessness of eventual liquidation in full. For the same reasons other financiers have closed their coffers to the sugar-planters.

Another object of the grant called the Congressional Relief Fund was to alleviate the distress prevailing in several Luzon provinces, particularly Batangas, on account of the scarcity of rice, due, in a great measure, to the causes already explained. Prices of the imported article had already reached double the normal value in former times, and the Government most opportunely intervened to check the operations of a syndicate which sought to take undue advantage of the prevailing misery. Under Philippine Commission Acts Nos. 495, 786 and 797, appropriations were made for the purchase of rice for distribution in those provinces where the speculator's ambition had run up the selling-price to an excessive rate. Hitherto the chief supplying-market had been the French East Indies, but the syndicate referred to contrived to close that source to the Government, which, however, succeeded in procuring deliveries from other places. The total amount distributed was 11,164 tons, costing P1,081,722. About 22 tons of this amount was given to the indigent cla.s.s, the rest being delivered at cost price, either in cash or in payment for the extermination of locusts, or for labour in road-making and other public works. The merchant cla.s.s contended that this act of the Government, which deprived them of antic.i.p.ated large profits, was an interference in private enterprise--a point on which the impartial reader must form his own conclusions. To obviate a recurrence of the necessity for State aid, the Insular Government pa.s.sed an Act urging the people to hasten the paddy-planting. The proclamation embodying this Act permitted the temporary use of munic.i.p.al lands, the seed supplied to be repaid after the crop. It is said that some of the local native councils, misunderstanding the spirit of the proclamation, made its non-observance a criminal offence, and incarcerated many of the supposed offenders; but they were promptly released by the American authorities.

Under the circ.u.mstances set forth, the cultivation of rice in the Islands has fallen off considerably, to what extent may be partially gathered from a glance at the enormous imports of this cereal, which in the year 1901~ were 167,951 tons; in 1902, 285,473 tons; in 1903, 329,055 tons (one-third of the value of the total imports in that year); and in 1904, 261,553 tons. The large increase of wages and taxes and the high cost of living since the American advent (rice in 1904 cost about double the old price) have reduced the former margins of profit on sugar and rice almost to the vanishing-point.

If all the land in use now, or until recently, for paddy-raising were suitable for the cultivation of such crops as hemp, tobacco, cocoanuts, etc., for which there is a steady demand abroad, the abandonment of rice for another produce which would yield enough to enable one to purchase rice, and even leave a margin of profit, would be rather an advantage than otherwise. But this is not the case, and naturally a native holds on to the land he possesses in the neighbourhood, where he was perhaps born, rather than go on a peregrination in search of new lands, with the risk of semi-starvation during the dilatory process of procuring t.i.tle-deeds for them when found.

Fortunately for the Filipinos, "Manila hemp" being a speciality of this region as a fibre of unrivalled quality and utility, there cannot be foreseen any difficulty in obtaining a price for it which will compensate the producer to-day as well as it did in former times. Seeing that buffaloes can be dispensed with in the cultivation of hemp and coprah, which, moreover, are products requiring no expensive and complicated machinery and are free of duty into the United States, they are becoming the favourite crops of the future.

In 1905 there was considerable agitation in favour of establishing a Government Agricultural Bank, which would lend money to the planters, taking a first mortgage on the borrower's lands as guarantee. In connexion with this scheme, the question was raised whether the Government could, in justice, collect revenue from the people who had no voice at all in the Government, and then lend it out to support private enterprise. Moreover, without a law against usury (so common in the Islands) there would be little to prevent a man borrowing from the bank at, say, 6 per cent.--up to the mortgage value of his estate--to lend it out to others at 60 per cent. A few millions of dollars, subscribed by private capitalists and loaned out to the planters, would enormously benefit the agricultural development of the Colony; and if native wealthy men would demonstrate their confidence in the result by subscribing one-tenth of the necessary amount, perhaps Americans would be induced to complete the scheme. The foreign banks established in the Islands are not agricultural, but exchange banks, and any American-Philippine Agricultural Bank which may be established need have little reason to fear compet.i.tion with foreign firms who remember the house of Russell & Sturgis (_vide_ p. 255) and also have their own more recent experiences. Philippine rural land is a doubtful security for loans, there being no free market in it.

Between the years 1902 and 1904 the Insular Government confiscated the arable lands of many planters throughout the Islands for delinquency in taxes. The properties were put up to auction; some of them found purchasers, but the bulk of them remained in the ownership of the Government, which could neither sell them nor make any use of them. Therefore an Act was pa.s.sed in February, 1905, restoring to their original owners those lands not already sold, on condition of the overdue taxes being paid within the year. In one province of Luzon the confiscated lots amounted to about one-half of all the cultivated land and one-third of the rural land-a.s.sessment in that province. The $2,400,000 gold spent on the Benguet road (_vide_ p. 615) would have been better employed in promoting agriculture.

Up to 1898 Spain was the most important market for Philippine tobacco, but since that country lost her colonies she has no longer any patriotic interest in dealing with any particular tobacco-producing country. The entry of Philippine tobacco into the United States is checked by a Customs duty, respecting which there is, at present, a very lively contest between the tobacco-shippers in the Islands and the Tobacco Trust in America, the former clamouring for, and the latter against, the reduction or abolition of the tariff. It is simply a clash of trade interests; but, with regard to the broad principles involved, it would appear that, so long as America holds these Islands without the consent of its inhabitants, it is only just that she should do all in her power to create a free outlet for the Islands' produce. If this Archipelago should eventually acquire sovereign independence, America's moral obligations towards it would cease, and the mutual relations would then be only those ordinarily subsisting between two nations.

By Philippine Commission Act dated April 30, 1902, a Bureau of Agriculture was organized. The chief of this department is a.s.sisted by experts in soil, farm-management, plant-culture, breeding, animal industry, seed and fibres, an a.s.sistant agrostologist, and a tropical agriculturist. Shortly after its organization, 18,250 packages of field and garden seeds were sent to 730 individuals for experiment in different parts of the Colony, with very encouraging results. The work of this department is experimental and investigative, with a view to the improvement of agriculture in all its branches.

In Spanish times agricultural land was free of taxation. Now it pays a tax not exceeding .87 per cent. of the a.s.sessed value. The rate varies in different districts, according to local circ.u.mstances. For instance, in 1904 it was .87 per cent. in Baliuag (Bulacan) and in Vinan (La Laguna), and .68 per cent. in San Miguel de Mayumo (Bulacan). This tax is subdivided in its application to provincial and munic.i.p.al general expenses and educational disburs.e.m.e.nts. The people make no demur at paying a tax on land-produce; but they complain of the system of taxation of capital generally, and particularly of its application to lands lying fallow for the causes already explained. The approximate yield of the land-tax in the fiscal year of 1905 was P2,000,000; it was then proposed to suspend the levy of this tax for three years in view of the agricultural depression.

The Manila Port Works (_vide_ p. 344), commenced in Spanish times, are now being carried on more vigorously under contract with the Atlantic, Gulf, and Pacific Company. Within the breakwater a thirty-foot deep harbour, measuring about 400 acres, is being dredged, the mud raised therefrom being thrown on to 168 acres of reclaimed land which is to form the new frontage. Also a new channel entrance to the Pasig River is to be maintained at a depth of 18 feet. The Americans maintain that there will be no finer harbour in the Far East when the work is completed. The reclaimed acreage will be covered with warehouses and wharves, enabling vessels to load and discharge at all seasons instead of lying idle for weeks in the typhoon season and bad weather, as they often do now. With these enlarged shipping facilities, freights to and from Manila must become lower, to the advantage of all concerned in import and export trade. The cost of these improvements up to completion is estimated at about one million sterling.

The port of Sia.s.si (Tapul group), which was opened in recent years by the Spaniards, was discontinued (June 1, 1902) by the Americans, who opened the new coastwise ports of Cape Melville, Puerta Princesa, and Bongao (October 15, 1903) in order to a.s.sist the scheme for preventing smuggling between these extreme southern islands and Borneo. Hitherto there had been some excuse for this surrept.i.tious trade, because inter-island vessels, trading from the other entry-ports, seldom, if ever, visited these out-of-the-way regions. In February, 1903, appropriations of $350,000 and $150,000 were made for harbour works in Cebu and Yloilo respectively, although in the latter port no increased facility for the entry of vessels into the harbour was apparent up to June, 1904. Zamboanga, the trade of which was almost nominal up to the year 1898, is now an active shipping centre of growing importance, where efforts are being made to foster direct trade with foreign eastern ports. An imposing Custom-house is to be erected on the new s.p.a.cious jetty already built under American auspices. Arrangements have also been made for the Hong-Kong-Australia Steamship Company to make Zamboanga a port of call. Here, as in all the chief ports of the Archipelago, greater advantages for trade have been afforded by the administration, and one is struck with the appearance of activity and briskness as compared with former times. These changes are largely owing to the national character of the new rulers, for one can enter any official department, in any branch of public service, from that of the Gov.-General downwards, to procure information or clear up a little question "while you wait," and, if necessary, interview the chief of the department. The tedious, dilatory time and money-wasting "come later on" procedure of times gone by no longer obtains.

What is still most needed to give a stimulus to agriculture and the general material development of the Islands is the conversion of hundreds of miles of existing highways and mud-tracks into good hard roads, so as to facilitate communication between the planting-districts and the ports. The corallaceous stone abounding in the Islands is worthless for road-making, because it pulverizes in the course of one wet season, and, unfortunately, what little hard stone exists lies chiefly in inaccessible places--hence its extraction and transport would be more costly than the supply of an equal quant.i.ty of broken granite brought over in sailing-ships from the Chinese coast, where it is procurable at little over the quarryman's labour. From the days of the Romans the most successful colonizing nations have regarded road-making as a work of primary importance and a civilizing factor.

Among the many existing projects, there is one for the construction of railroads (1) from Manila (or some point on the existing railway) northward through the rich tobacco-growing valleys of Isabela and Cagayan, as far as the port of Aparri, at the mouth of the Cagayan River--distance, 260 miles; (2) from Dagupan (Pangasinan) to Laoag (Ilocos Norte), through 168 miles of comparatively well-populated country; (3) from San Fabian (Pangasinan) to Baguio (Benguet), 55 miles; and three other lines in Luzon Island and one in each of the islands of Negros, Panay, Cebu, Leyte, and Samar. A railway line from Manila to Batangas, _via_ Calamba (a distance of about 70 miles), and thence on to Albay Province, was under consideration for many years prior to the American advent; but the poor financial result of the only (120 miles) line in the Colony has not served to stimulate further enterprise in this direction, except an endeavour of that same company to recuperate by feeder branches, two of which are built, and another (narrow gauge) is in course of construction from Manila to Antipolo, _via_ Pasig and Mariquina (_vide_ Railways, p. 265).

Since February, 1905, a Congress Act, known as the "Cooper Bill,"

offers certain inducements to railway companies. It authorizes the Insular Government to guarantee 4 per cent, annual interest on railway undertakings, provided that the total of such contingent liability shall not exceed $1,200,000--that is to say, 4 per cent, could be guaranteed on a maximum capital of $30,000,000. The Insular Government is further empowered under this Act to admit, at its discretion, the entry of railway material free of duty. As yet, no railway construction has been started by American capitalists. Projects _ad infinitum_ might be suggested for the development of trade and traffic--for instance, a ship-ca.n.a.l connecting the Laguna de Bay with the Pacific Ocean; another from Laguimanoc to Atimonan (Tayabas); an artificial entry-port in Negros Island, connected by railway with two-thirds of the coast, etc.

Up to the present the bulk of the export and import trade is handled by Europeans, who, together with native capitalists, own the most considerable commercial and industrial productive "going concerns"

in the Islands. In 1904 there were one important and several smaller American trading-firms (exclusive of shopkeepers) in the capital, and a few American planters and successful prospectors in the provinces. There are hundreds of Americans about the Islands, searching for minerals and other natural products with more hopeful prospects than tangible results. It is perhaps due to the disturbed condition of the Islands and the "Philippines for the Filipinos"

policy that the antic.i.p.ated flow of private American capital has not yet been seen, although there is evidently a desire in this direction. There is, at least, no lack of the American enterprising spirit, and, since the close of the War of Independence, several joint-stock companies have started with considerable cash capital, princ.i.p.ally for the exploitation of the agricultural, forestal, and mineral wealth of the Islands. Whatever the return on capital may be, concerns of this kind, which operate at the natural productive sources, are obviously as beneficial to the Colony as trading can be in Manila--the emporium of wealth produced elsewhere.

There are, besides, many minor concerns with American capital, established only for the purpose of selling to the inhabitants goods which are not an essential need, and therefore not contributing to the development of the Colony.

The tonnage entered in Philippine ports shows a rapid annual increase in five years. Many new lines of steamers make Manila a port of call, exclusive of the army transports, carrying Government supplies, and in 1905 there was a regular goods and pa.s.senger traffic between Hong-Kong and Zamboanga. Still, the greater part of the freight between the Philippines and the Atlantic ports is carried in foreign bottoms. The shipping-returns for the year 1903 would appear to show that over 85 per cent, of the exports from the Islands to America, and about the same proportion of the imports from that country (exclusive of Government stores brought in army transports) were borne in foreign vessels. The carrying-trade figures for 1904 were 78.41 per cent, in British bottoms; 6.69 per cent, in Spanish, and 6.65 per cent, in American vessels. The desire to dispossess the foreigners of the carrying monopoly is not surprising, but it is thought that immediately-operative legislation to that end would be impracticable. The latest legislation on the subject confines the carrying-trade between the Islands and the United States to American bottoms from July 1, 1906. It is alleged that the success of the new regulations which may (or may not, for want of American vessels) come into force on that date will depend on the freights charged; it is believed that exorbitant outward rates would divert the hemp cargoes into other channels, and a large rise in inward freights would facilitate European compet.i.tion in manufactured goods. Any considerable rise in freights to America would tend to counterbalance the benefits which the Filipinos hope to derive from the free entry of sugar and tobacco into American ports. The text of the Shipping Law, dated April 15, 1904, reads thus; "On and after July 1, 1906, no merchandise shall be transported by sea, under penalty of forfeiture thereof, between ports of the United States and ports or places of the Philippine Archipelago, directly, or _via_ a foreign port, or for any part of the voyage in any other than a vessel of the United States. No foreign vessel shall transport pa.s.sengers between ports of the United States and ports or places in the Philippine Archipelago, either directly, or _via_ a foreign port, under a penalty of $200 for each pa.s.senger so transported and landed."

The expenses of the Civil Government are met through the insular revenues (the Congressional Relief Fund being an extraordinary exception). The largest income is derived from the Customs'

receipts, which in 1904 amounted to about $8,750,000, equal to about two-thirds of the insular treasury revenue (as distinguished from the munic.i.p.al). The total _Revenue and Expenditure_ in the fiscal year 1903 (from all sources, including munic.i.p.al taxes expended in the respective localities, but exclusive of the Congressional Relief Fund) stood thus:--

Total Revenue $14,640,988 Total Expenditure $15,105,374 Excess of Expenditure over Revenue 464,386 ========== ========== 15,105,374 15,105,374

In 1903, therefore, Government cost the inhabitants the equivalent of about 46 per cent, of the exports' value, against 45 per cent, in Spanish times, taking the relative averages of 1890-94. The present abnormal pecuniary embarra.s.sment of the people is chiefly due to the causes already explained, and perhaps partly so to the fact that the P30,000,000 to P40,000,000 formerly in circulation had two to three times the local purchasing value that pesos have to-day.

The "Cooper Bill," already referred to, authorizes the Insular Government to issue bonds for General Public Works up to a total of $5,000,000, for a term of 30 years, at 4 1/2 per cent, interest per annum; and the munic.i.p.alities to raise loans for munic.i.p.al improvements up to a sum not exceeding 5 per cent. of the valuation of the real estate of the munic.i.p.alities, at 5 per cent. interest per annum. For the purchase of the friars' lands a loan of $7,000,000 exists, bearing interest at 4 per cent. per annum, the possible interest liability on the total of these items amounting to about $2,000,000 per annum.

On November 15, 1901, the high Customs tariff then in force was reduced by about 25 per cent. on the total average, bringing the average duties to about 17 per cent. _ad valorem_, but this was again amended by the new tariff laws of May 3, 1905. Opium is still one of the imports, but under a recent law its introduction is to be gradually restricted by tariff until March 1, 1908, from which date it will be unlawful to import this drug, except by the Government for medicinal purposes only.

On August 1, 1904, a new scheme of additional taxation came into force under the "Internal Revenue Law of 1904." This tax having been only partially imposed during the first six months, the full yield cannot yet be ascertained, but at the present rate(P5,280,970.96, partial yield for the fiscal year 1905) it will probably produce at the annual rate of $4,250,000 gold, which, however, is not entirely extra taxation, taking into account the old taxes repealed under Art. XVII., sec. 244. The theory of the new scheme was that it might permit of a lower Customs tariff schedule. The new taxes are imposed on distilled spirits, fermented liquors, manufactured tobacco, matches, banks and bankers, insurance companies, forestry products, valid mining concessions granted prior to April 11, 1899, business, manufactures, occupations, licences, and stamps on specified objects (Art. II., sec. 25). Of the taxes accruing to the Insular Treasury under the above law, 10 per cent. is set apart for the benefit of the several provincial governments, apportioned _pro rata_ to their respective populations as shown by the census of 1903; 15 per cent. for the several munic.i.p.al governments, provided that of this sum one-third shall be utilized solely for the maintenance of free public primary schools and expenditure appertaining thereto. In the aforesaid distribution Manila City ranks as a munic.i.p.ality and a province, and receives apportionment under this law on the basis of 25 per cent. (Art. XVII., sec. 150).

From the first announcement of the projected law up to its promulgation the public clamoured loudly against it. For months the public organs, issued in Spanish and dialect, persistently denounced it as a harbinger of ruin to the Colony. Chambers of Commerce, corporations and private firms, foreign and native, at meetings specially convened to discuss the new law, predicted a collapse of Philippine industry and commerce. At a public conference, held before the Civil Commission on June 24, 1904, it was stated that one distillery alone would have to pay a yearly tax of P744,000, and that a certain cigar-factory would be required to pay annually P557,425. Pet.i.tions against the coming law were sent by all the representative trading-bodies to the Insular Government praying for its withdrawal. When the Commissioners retired to their hill-station at Baguio (Benguet) they were followed up by protests against the measure, but it became law under Philippine Commission Act No. 1189. Since the imposition of this tax there has been a general complaint throughout the civilized provinces of depression in the internal trade, but to what extent it is justified there is no available precise data on which to form an estimate.

As already stated, the American occupation brought about a rapid rise in the price of everything, not of necessity or in obedience to the law of supply and demand, but because it was the pleasure of the Americans voluntarily to enhance established values. To the surprise of the Filipinos, the new-comers preferred to pay wages at hitherto unheard-of rates, whilst the soldiers lavishly paid in gold for silver-peso value (say, at least, double), of their own volition--an innovation in which the obliging native complacently acquiesced, until it dawned upon him that he might demand anything he chose. The soldiers so frequently threw away copper coin given them in change as valueless, that many natives discontinued to offer it. It followed that everybody was reluctantly compelled to pay the higher price which the American spontaneously elected to give. Labour, food, house-rent, and all the necessaries of life rose enormously. [294]

The Colony soon became converted from a cheap into an expensive place of residence. Living there to-day costs at least three times what it did in Spanish times. Urban property and lands were a.s.sessed at values far beyond those at which the owners truly estimated them. Up to 1904 it was not at all uncommon to find the rent of a house raised to five times that of 1898. Retailers had to raise their prices; trading-firms were obliged to increase their clerks' emoluments, and in every direction revenue and expenditure thenceforth ranged on an enhanced scale. It is remarkable that, whilst pains were taken by the new-comers to force up prices, many of them were simultaneously complaining of expensive living! Governor W. H. Taft, with an annual emolument of $20,000 gold, declared before the United States Senate that the Gov.-General's palace at Malacanan was too expensive a place for him to reside in. The lighting of the establishment cost him $125 gold a month, and his servants' wages amounted to $250 monthly. He added that he would rather pay his own rent than meet the expenses of the Malacanan residence. [295]

Two and a half years later General Leonard Wood reported:

"There has been a great increase in the cost of living and in wages in this (Moro) as in other provinces--an increase which has not been accompanied either by improved methods or increased production. The cause of the increase can be traced, in most cases, to the _foolishly high prices paid_ by army officials for labour." [296]

Wages steadily advanced as a natural consequence of the higher cost of living, and, under the guidance of a native demagogue, the working cla.s.ses, for the first time in Philippine history, collectively began to grumble at the idea of labour-pay having a limit. It was one of the abuses of that liberty of speech suddenly acquired under the new dominion. On February 2, 1902, this person organized the malcontents under the t.i.tle of a "Labour Union," of which he became the first president. The subscription was 20 cents of a peso per week. The legality of peacefully relinquishing work when the worker felt so inclined was not impugned; but when the strikers sought to coerce violently their fellow-men, the law justly interfered and imprisoned their leader. The presidency of the so-called "Labour Union" was thenceforth (September following) carried on by a half-caste, gifted with great power of organization and fluent oratory. He prepared the by-laws of the a.s.sociation, and fixed the monthly subscription at one peso per man and one peseta (one-fifth of a peso) per woman. About 100,000 members were enrolled in the union, the ostensible aim of which was the defence of the working man's interests. It is difficult to discern what those interests were which needed protection; the position of the labouring cla.s.s was the very reverse of that existing in Europe; the demand for labourers, at any reasonable wage, exceeded the supply. The idea of a Filipino philanthropically devoting his life to the welfare of the ma.s.ses was beyond the conception of all who understood the Philippine character. At the end of about eight months, notwithstanding the enormous a.s.sets from subscriptions, the "Labour Union" became insolvent, with a deficit of 1,000 or more pesos. Where the a.s.sets had gone needed investigation. In the meantime the leader, posing as mediator between the Insular Government and certain notorious outlaws, had endeavoured to negotiate with Governor W. H. Taft for their surrender, on the condition of full pardon. The Government, at length, becoming suspicious of his intentions and the full measure of his sympathy for these individuals, caused the leader to be arrested on May 29, 1903, on the allegations of "founding, directing, and presiding over an illegal a.s.sociation known as 'The Democratic Labour Union,'"

irregularities connected with the foundation and administration of the same, sedition, confederacy with brigands, and other minor counts.

It was clear to every thinking man, American or European, that the control of such a formidable body was a menace to peace. The accused was brought to trial on the chief allegations, and in September, 1903, he was sentenced to four years and two months' imprisonment, but appealed against the sentence to the Supreme Court. Later on he was tried on the other counts, and, although the public prosecution failed, it served the useful purpose of dissolving a league the scope of which was shrouded in obscurity, at a period when the political atmosphere was still clouded by aspirations of impossible and undesirable realization. I followed the course of the trial daily, and I interviewed the accused at his house a week before it ended. Three hundred doc.u.ments were read at the trial, and 160 witnesses were brought against him. To endeavour to establish a case of conspiracy against him, another individual was produced as his colleague. The first accused was defended by an American advocate with such fervid eloquence, apparently inspired by earnest conviction of his client's innocence, that those who had to decide his fate acquitted him of the charge of conspiracy on May 11, 1904. The defendant's verbal explanation to me of the "Labour Union" led me to the conclusion that its abolition would benefit the community.

The abnormal rise in wages had the bad effect of inducing the natives to leave their pastoral pursuits to flock into the towns. The labour question is still a difficult problem, for it is the habit of the Filipino to discontinue work when he has a surplus in his pocket. Private employers complain of scarcity and the unreliability of the unskilled labourer. Undoubtedly the majority of them would welcome the return of Chinese coolies, whose entry into the Islands is prohibited by the Insular Government, in agreement with the desire of the Filipinos, who know full well that the industrious Chinaman would lower wages and force the Filipinos into activity for an existence.