The American Occupation of the Philippines 1898-1912

by James H. Blount

Although it has been decided by the Supreme Court of the United States that the provisions of the Constitution are not in force in the Philippines, I have serious doubts as to whether said decision also meant that this Government has the power to enact laws for the islands which are expressly prohibited by the Constitution in the United States.

It is through the courtesy of Mr. Quezon that such light as I may have been able to throw on the subject has been obtained. He has shown me letters from the Philippine Chamber of Commerce at Manila and other commercial organizations prophesying ruin to the Manila hemp industry in the event the export tax should continue. One of these letters is addressed to the two Philippine Commissioners in Congress, Mr. Legarda and Mr. Quezon. It informs them of the hopes of the Filipinos at Manila that they, Messrs. Legarda and Quezon, may be successful in their campaign to get the law repealed and that many of them (the Filipinos at Manila) feel hopeful of results in that regard. Speaking for their fellow countrymen at Manila, they say, “The optimists are of the opinion that the matter being in such good hands as yours will be carried to a successful conclusion.” Then they give the darker side of the picture thus:

But the representatives at this capital of the famous syndicate, the International Harvester Company, are of the opinion that we will be able to accomplish nothing, and theirs is an opinion to which great weight should be attached, because the vast interests which that concern represents can set in motion powerful influences to keep the present law as it is, since it concerns their interest to do so.

Mr. Quezon has also shown me a letter written to him, March 30, 1911, by his and my warm personal friend, Hon. James F. Smith, formerly Governor-General of the Philippines, now (1912) Judge of the Court of Customs Appeals at Washington, D. C., in which letter General Smith says, concerning the operation of that part of the export tax act of March 8, 1902 (continued by the Payne Tariff Law of 1909) by which American manufacturers are relieved from the payment of the export tax on Manila hemp:

In effect this really and truly amounts to the payment by the Philippine Government and the Filipino people of a large subsidy to American manufacturers of hemp. More than that, this concession to the American manufacturer, by enabling him to undersell his British competitor, gives him an undue control of the situation and has put him in a position, to some extent, to control prices for the raw product.

It seems to me that the American people had better look to their own liberties, when they remember that in the campaign for the Republican nomination in 1912, the Roosevelt Headquarters gave out that pending the Roosevelt dictation of Mr. Taft’s nomination in 1908, the International Harvester Company furnished a floor of its Chicago building to the Taft people, this interesting fact being part of the leakage from the Roosevelt-Taft quarrel caused by the Roosevelt charge that Mr. Taft was unfit for re-election because he “meant well feebly”; and when it is recalled, on the other hand, that in the Roosevelt campaign of 1912 for the presidential nomination for a third term, Mr. George W. Perkins,[17] the very personification of undue corporation influence with the Government, assumed the rôle of Warwick for an ex-President who, when President, had repudiated the advice of his counsel, Governor Harmon, that a railroad company[18] be prosecuted for taking rebates because the vice-president of the company was his personal friend.[19] But let us return to the Philippine rebates, and their corner-stone, the export tax, Section 13 of the Payne-Aldrich Tariff.

In the case of Fairbanks vs. United States, 181 U. S. Supreme Court Reports, page 290, a case in which the court was asked to declare a certain Act of Congress unconstitutional and void, because it imposed what was virtually an export tax, the opinion of the court cites the absolute inhibition against such a tax imposed by our Federal Constitution, and says concerning the wise theory on which this fundamental tenet of our government rests:

The requirement of the Constitution is that exports should be free from any governmental burden.

The decision then goes on to elaborate on what it terms “that freedom from governmental burden in the matter of exports which it was the intention of our Constitution to protect and preserve.” Finally, the court uses an expression which is certainly a stinging rebuke to any law-making power that permits the selfish greed of a little set of importers to get a law passed imposing for their special benefit a paralyzing export tax on the chief staple of a helpless colony: