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 Statesʼ 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 speculatorʼs 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 ₱1,081,722. About 22 tons of this amount was given to the indigent class, 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 class contended that this act of the Government, which deprived them of anticipated 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 passed an Act urging the people to hasten the paddy-planting. The proclamation embodying this Act permitted the temporary use of municipal 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 circumstances 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 title-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 borrowerʼs 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 competition 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 passed 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-assessment 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 Islandsʼ produce. If this Archipelago should eventually acquire sovereign independence, Americaʼs 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 assisted by experts in soil, farm-management, plant-culture, breeding, animal industry, seed and fibres, an assistant 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.